Space usage maximization in a warehouse or store is a major challenge you face along the supply chain, as limited space is a challenge at any Distribution Center.
Why do warehouses run out of space?
There are several reasons as to why warehouses run out of space. Some are positive while others are because of poor processes and decisions.
- Business is going up and up. Customers need the products urgently, so you need more space in order to satisfy them.
- The purchase department overbuys some products. When planning for the warehouse, you decide for 3 months of inventory, but purchase gets a great deal and buys 9 months instead. Where are you going to put this?
- Another reason is obsolete or dead inventory – inventory that doesn’t move and has been there for more than several seasons. If you run your finger over a product and it’s full of dust, then the product has been sitting there for too long. It should be moved somewhere such as a less-congested spot, or it should be destroyed and moved out of the warehouse.
A warehouse is technically out of space when it touches about 90 percent of its occupancy. That’s not just in the warehouse storage area; it holds true for receiving, packing, unpacking, shipping and all other process areas.
The biggest problem is congestion. Congestion causes extra work – moving a product that you don’t have room for. You have to move “Product A” into another location in order to take this other “Product B” out. You start to store stuff in aisles. You use staging space that’s typically free space for new incoming material. Hence you take up valuable time and extra labor.
If you run out of space for inventory in your warehouse for any reason, there are a number of ways to increase capacity without paying for more leasing space. Some of them are mentioned below:
- Extend your racking vertically
- Build a mezzanine
- Reduce aisle width in the racking area
- Add half-pallet locations
- Use a warehouse management system for directed put-away
- Identify and use underutilized space
- Store products in trailers for short-term or seasonal needs
- Extend your racking vertically
Extending racks up is usually the “lowest hanging fruit” to create more warehouse storage space. Generally new buildings have a fire suppression sprinkler system, and depending on the building guidelines in your country, you can store inventory within a certain distance from that area. Always consult a specialist who can confirm that rack extension is a viable option.
Types of Warehouse Storage Racks
One challenge to extending racks in your warehouse is finding the best kind of storage racks. Below are some of the more popular types of storage racks for your warehouse utilization:
- Pallet Racks:Maybe your warehouse is already full of pallet racks on the floor. Using basic racks, combined with a forklift, is one of the best ways to maximize your storage space if you have different types of inventory.
- Carton Flow Racks:These racks are perfect for FIFO (First In, First Out) inventory processes. Carton flow racks have slanted panels that push down the older inventory so it’s more easily accessible.
- Cantilever Racks:Cantilever racking is excellent for long inventory like pipes, lumber, or steel trusses. These racks have extending arms where the inventory is placed.
When extending these racks, take special care to consider if your employees will need extra equipment to reach higher levels of inventory.
- Build a mezzanine
A good way to increase warehouse capacity is to add a mezzanine. Making a mezzanine above a floor-level process, can nearly double floor space. Of course, one has to look into the many things before making a mezzanine. The floor must be able to handle the load. There will now be columns that will drop down to the floor and that could come in the way. But it is much better to add a mezzanine, if possible, than to expand the building.
- Reduce aisle width in the racking area
A wide aisle can range from 2.50 to 4 meters. But if that can be reduced to anywhere from 2 to 3 meters, then 15 to 25 percent of the area can be saved. When considering this option, lifting equipment such as stacker and forklift must be evaluated. The equipment should be capable of working and turning in the narrow aisles.
- Add half-pallet locations
Some products come in half pallet quantities, so adding half-pallet locations will save space. If you condense your pallets, you can put more pallets, and therefore more product, in the same area without too much white space.
- Use a Warehouse Management System for a directed put-away
Directed put-away is an excellent way of creating or saving space in a warehouse. The warehouse management system put-away parameter should be changed from “put the pallet wherever you want”, to “directed put-away”. The system will tell you where to put a certain pallet as opposed to letting a worker putting it in the most convenient location.
- Identify and use underutilized space
Try to use space you never thought you had. There is often space above receiving/shipping doors or slow-moving materials. If there is a conveyor, hang a shelf above it. It is an easy way to increase storage capacity for smaller or slower-moving items that don’t need to be replenished as frequently.
- Store product in trailers for short-term or seasonal needs
Storing products in trailers is sometimes necessary as compared to leasing temporary warehouse storage space. Many warehouses go for extra trailers and pay the demurrage charge for temporary storage avoiding building expansion. This is good for seasonal products, especially among retailers.
Conclusion
There is no “One Size Fits All” way to resolving warehouse capacity issues. The solution is usually a combination of several parameters. You can free up space, add space, use equipment and add trucks to the yard. There’s usually more than one answer.
We want you to remember the 90 percent rule. Don’t cram up products up to 100 percent.