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Nowadays warehousing became one of the most important and critical part in supply chain systems due to the fact that it consumes a considerable part of logistic cost. Designing phase of warehousing system is the most important part in warehousing since most of the strategic and tactical decisions should be taken in this phase.

Majority of academic papers are primarily analysis oriented and does not give a systematic method and techniques as a basis for warehouse redesign. So there is a need to develop a structured procedure that can be applied for different type of warehouses.

Therefore the purpose of this thesis is to develop a process for redesigning production warehouses, and analyzing major problems during redesign steps.

The thesis is designed as a case study, and a mix of quantitative and qualitative methods were used for data collection and data analysis. The methodology focuses around the warehousing process and redesign steps as described in the literature. Results of the thesis develop a seven steps procedure for redesigning of the production warehouse, also different problems and challenges are faced during redesign steps.

It was tried to choose the best redesigning method which fit with the characteristics of the warehouse, in order to cover the space reduction of the warehouse with the consideration of existing facilities and reducing of cost. In addition, the performance of the current warehouse system was evaluated based on current design of the warehouse in order to avoid repeating of same mistake in redesign process.

Storage assignment policy as one of the redesign steps was discussed and a framework for storage system of the components were suggested.

The findings of the thesis to some extent can be applicable to other production warehouses. Further research is suggested for more specific results and new developed redesign methods for all types of warehouses.