Starovasnik uses the example of the U.S.S. Missouri, the famed battleship which saw service in World War II, Korea and the Persian Gulf, to illustrate a point about warehouse design. Built in the 1940s, the ship proved to be of use all the way into the early 1990s. It's an example, he says, of creating something that doesn't "design us into a corner." Similarly, modern-day warehouse designers need to create structures that can adjust to an uncertain future.

"You don't want to lock in and require excess capital," he says.

Among the biggest challenges is the proper use of space. There are many opportunities for making better use of available area within existing distribution structures, Starovasnik says. The addition of a mezzanine, for example, creates new space without expanding the building's footprint. In laying out the basic operation, companies need to decide which items require the most area for handling within the warehouse.

Allowance must be made for escape routes and places where the building can be expanded. Starovasnik says there's more uncertainty in warehouse operations today than ever before. "The rate of change around us in all areas is [accelerating]," he says. Companies are having to adjust to changing consumer buying patterns, such as the popularity of electronic commerce, and growth in direct deliveries.

The margin of error is getting thinner, but Starovasnik is careful to distinguish between accuracy and precision. "Accuracy is the likelihood of hitting the target," he says. "Precision is the ability to repeat the operation."

Starovasnik prefers "a larger target at which you're aiming future operations." At the same time, he acknowledges, there's the risk of designing a facility that is meant to adapt to all possible changes, but results in excess expenditures. "You need to be intelligent," he says. "Look for the opportunity to add space and change throughout without adding a lot of capital."

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Keywords: supply chain, supply chain management, inventory management, inventory control, logistics management, warehouse management, WMS, supply chain planning, retail supply chain