If you're running a 3PL, your location scheme isn't just about finding stuff—it's about segregating clients, optimizing picks, and scaling without chaos. A poorly designed location system will haunt you for years: pickers wandering, inventory mixed between clients, and reports that make no sense.
This guide covers how to design a location naming system that works for multi-client 3PL operations, from zones and aisles down to individual bin positions.
Why Location Design Matters for 3PLs
Single-tenant warehouses have it easy: one set of rules, one workflow, one inventory pool. 3PLs face unique challenges:
Client segregation Some clients require their inventory physically separated—not just logically. Your location scheme must support this.
Variable slotting Client A wants FIFO; Client B needs FEFO for perishables. Your locations need to accommodate different picking strategies.
Billing complexity If you charge per-pallet storage, you need to count occupied positions per client. Ambiguous locations make this impossible.
Scalability When you onboard a new client, can you carve out space without renumbering everything?
Get the location scheme right on day one, and operations flow. Get it wrong, and you'll be fighting fires forever.
Anatomy of a Location Code
A good location code tells the picker exactly where to go without ambiguity. The standard format:
[Zone]-[Aisle]-[Bay]-[Level]-[Position]
Example: A-04-12-C-2
- A = Zone A (e.g., dry goods, or Client A's dedicated area)
- 04 = Aisle 4
- 12 = Bay 12 (the 12th upright along the aisle)
- C = Level C (third level from floor)
- 2 = Position 2 (second pallet position within that bay/level)
Some warehouses simplify to Aisle-Bay-Level (e.g., 04-12-C) if positions aren't needed.
Rules:
- Keep codes short (under 12 characters)
- Use leading zeros for sorting (04 not 4)
- Avoid letters that look like numbers (O, I, L)
- Be consistent—every location follows the same pattern
Zone Strategies for 3PLs
Zones are the highest level of your hierarchy. For 3PLs, zones typically map to:
Option 1: Client-dedicated zones
- Pros: Clear separation, simple audits
- Cons: Wasted space if a client's volume fluctuates
Option 2: Product-type zones
- Pros: Efficient climate control, regulatory compliance
- Cons: Client inventory is spread across zones
Option 3: Function-based zones
- Pros: Optimized for pick path efficiency
- Cons: Requires replenishment workflows
Hybrid approach (recommended for 3PLs): Use functional zones (bulk, pick, staging) as the primary split, with client-specific aisles or bays within each zone. Client A's pick face is Aisles 01-04; Client B is Aisles 05-08.
This balances efficiency with segregation.
Example: Designing a 3PL Location Scheme
Let's say you have a 50,000 sq ft warehouse with 3 clients:
Step 1: Define zones
- Zone P = Pick faces (forward pick locations)
- Zone R = Reserve (bulk pallet storage)
- Zone S = Staging (inbound/outbound)
- Zone Q = Quarantine (returns, damaged goods)
Step 2: Allocate aisles by client
- Aisles 01-10: Client A (largest client, 60% of volume)
- Aisles 11-15: Client B (30% of volume)
- Aisles 16-18: Client C (10% of volume)
- Aisles 19-20: Flex space (new clients, overflow)
Step 3: Define bay and level structure
- Total positions per aisle: 20 × 4 × 2 = 160 pallet positions
- Client A capacity: 10 aisles × 160 = 1,600 positions
Step 4: Create pick face locations
- P-01-001 through P-01-200 (Aisle 1, 200 bin locations)
- Assign SKUs to pick faces based on velocity
Location code examples:
- R-03-08-B-1 = Reserve zone, Aisle 3, Bay 8, Level B, Position 1
- P-02-045 = Pick zone, Aisle 2, Bin 45
- S-IN-01 = Staging zone, Inbound dock 1
- Q-01-A = Quarantine zone, Aisle 1, Section A
WMS Configuration for Locations
Once you've designed the scheme, configure it in your WMS:
Bulk location creation
- Specify zone, aisle range, bay range, level range, position range
- System generates all combinations automatically
Location attributes
- Type (pallet, shelf, bin, floor, staging)
- Status (active, inactive, quarantine)
- Capacity (max pallets, max weight, max cubic feet)
- Client assignment (if dedicated) or "shared"
- Pick sequence (for optimizing pick paths)
Client visibility rules If Client A's inventory can only go in Aisles 01-10, enforce this in the WMS. Putaway suggestions should only offer valid locations.
WarePulse lets you bulk-generate locations with a pattern builder, set client restrictions, and define capacity limits—so your warehouse layout is enforced, not just documented.
Scaling Without Renumbering
The worst outcome: you need to add capacity and have to renumber half your warehouse. Avoid this with:
Built-in expansion room If you have 15 aisles today, number them 01-15 but reserve 16-25 for growth. When you add racking, the new locations fit seamlessly.
Flex zones Designate 10-20% of capacity as flex space that can be assigned to new clients or overflow without restructuring.
Modular zone codes Use letters for zones (A, B, C...) so you can add Zone D without impacting existing codes.
Avoid embedded meaning Don't encode client names into location codes (e.g., "CLT-A-01"). If Client A leaves, those codes become confusing. Use the WMS to track client assignment, not the code itself.
Next Steps
A well-designed location scheme is the foundation of efficient 3PL operations. Before you set up a single location:
- Map your physical layout (racking, shelving, staging areas)
- Decide on zone strategy (client-based, function-based, or hybrid)
- Define your code format and naming rules
- Build in expansion capacity
- Configure in your WMS with proper attributes and restrictions
Need help designing your location scheme? Book a demo with WarePulse and we'll walk through your layout. Our location builder makes it easy to set up hundreds of locations in minutes—with the flexibility 3PLs need.
Also check out our guide on warehouse location naming conventions for more tips on code structure.