Don't Waste Your Warehouse Space


Friday, February 01, 2008

By Norman Saenz, Jr., Associate Principal
Keogh Consulting


Do you have too much warehouse space? Chances are you are either out of space or getting close to it. When you do run out of warehouse space you have many options to consider including expanding your warehouse, building a new facility, or leasing outside space. But, there is another option— you can improve the utilization of your existing space. There are many operational concepts that can be implemented to better utilize your existing space:

• Remove Excess Inventory
• Select the Right Equipment
• Minimize Aisle Widths
• Fill Air With Product (Use of Vertical Space)
• Slot Products in Optimum Location Sizes
• Utilize Random Storage Method
• Perform Layout Assessment

Remove Excess Inventory
If your facility is squeezed for space, don’t overlook the obvious. There are many reasons for keeping excess inventory (customer satisfaction, having complete product lines, lead time uncertainty, etc.), but these reasons should be compared to the cost storing these items. Housing excess or obsolete inventory is a poor utilization of your space and can be a costly mistake. The first step to removing excess inventory is to calculate the economic amount of inventory you should have on-hand. Then, compare this amount to the actual inventory on-hand. The difference is the amount of potential excess inventory that can be removed. By properly managing your inventory, you can remove excess items and reallocate that space for fast-moving or high-volume products.

Select the Right Equipment
A basic principle to not wasting your warehouse space is evaluating and selecting the most space efficient storage equipment. Using more dense storage equipment is a key factor to reducing your space requirements. An analysis of your products inventory levels and cubic order activity should be performed to accurately define the storage requirements in reserve and the forward picking area. With the requirements clearly defined, the right decisions can be made on selecting from the various single-deep to deep-storage equipment options. In most warehouses, there should be at least two to three different storage types used in the reserve and forward picking areas. If your warehouse has all single-deep pallet rack, then chances are you can utilize your space more effectively with the addition of different storage equipment.

Minimize Aisle Widths
Reducing your aisle widths is a prime method of reducing your current space requirements. The industrial truck used and the pallet dimensions dictate the aisle widths. However, with an assessment of aisle widths throughout the facility, you may identify aisles that can be reduced with using the same equipment. In other cases, you might consider the investment of a narrow (96” to 108”) or very narrow aisle (44” to 66”) industrial vehicles, such as reach or swing-mast respectively.

In addition to minimizing the aisle widths, thought should be made with the number of aisles used in your facility. The number of cross aisles and people aisles should be assessed to maximize the utilization of the aisles.

Fill Air with Product
The impact of using vertical storage space depends on your current storage clear height and stackability restrictions. For the beverage industry, a stack height limitation of one to two pallets high is common. With these low stack heights, a simple 4 to 5 level pallet rack structure, using basic counterbalanced vehicles can drastically reduce the space requirements of your facility. In addition, the vertical space within a pallet rack structure should not be wasted. The lift-off height provided between the top of the load and the beam should be adequate but not excessive. The typical lift-off heights within a pallet rack structure range from 3 to 8 inches.

Another method of using the vertical storage space is using single-deep pallet racks above your dock doors. These racks can be used to store very slow moving products, packaging supplies and/or empty pallets. The key is to maximize the clear height of your facility. Lastly, automated storage and retrieval systems (AS/RS) reach heights of 100 feet, but most likely, require you to build a new facility or invest in a rack-supported building.

Slot Products in Optimum Location Sizes
An often-overlooked method of reducing space requirements is optimizing the product location sizes. By performing a product slotting analysis on your reserve storage or forward picking areas, the right location sizes can be defined to increase the density of storage resulting in less space requirements. For example, stacking 5,000 pallets, with a consistent 44” pallet height into a 60” pallet storage opening is just wasting space. The right balance between tailored product location sizes and flexibility results in improved space utilization.

Random Storage Method
There are two basic methods for organizing products in the reserve storage area, fixed or random storage philosophies. A random storage philosophy allows a product (that fits) to be stored in any empty storage location. A fixed storage philosophy assigns a specific product to a location.
Using fixed locations is common in the picking area, but it isn’t recommended in the reserve storage area in most industries. The fixed method results in empty locations or wasted storage space. However, the random storage method maximizes the use of empty locations and results in higher space utilization (not to mentioned improved labor productivity during put-away). It is important to point out that a warehouse management system is suggested when utilizing a random storage technique.

Perform Layout Assessment
A general layout assessment can identify the overall approach to utilizing space within your warehouse facility. Common space utilization tactics, such as storing products along outer walls, can be identified an integrated into the layout. The biggest decision on developing a new facility is using docks on one-side of the facility or both sides. Having docks on multiple sides of a building requires a multiple dock areas for unloading and loading products. This leads to the majority of your facility being occupied by floor storage or wasted vertical space. If you can operate with docks on one side of the facility, then you can share the space required for unloading and loading.

Performing a review of your existing space utilization is advisable before investing in other options for handling space shortages. If not, you might duplicate bad space utilization practices into your next facility or expansion. Another key factor in not wasting your warehouse space is planning for future expansions at the start of any new building design. However, it is never too late to start planning for future expansions of your facility, to ensure the effective use of space.