Save warehouse space without an expansion
Running out of warehouse space is one of the biggest challenges any business faces, large or small. Seasonal variations, rapid growth, excessive discount purchasing – whatever the reason, lack of warehouse space has a knock-on effect on operations, sales and ultimately, the bottom-line, says Action Storage.
The answer isn’t expansion, at least in the vast majority of cases. There are some simple things businesses can do to make their warehouse more efficient, making the most of the space they already have.
Here are our top tips:
Assess
The first step in making your warehouse more efficient is to assess the space you have and the inventory that has to go into it. At the most fundamental level, that’s what warehouse management boils down to, so there’s no point looking at layout or racking until you’ve assessed the situation.
While your warehouse might not warrant a full-scale warehouse management system, there are certainly some metrics you should be tracking if you want to make your warehouse more efficient.
The major concepts that you’ll need to assess are theoretical storage capacity, utilisation and working capacity.
Your theoretical capacity is easy to work out: it’s simply the actual physical capacity of your storage space. Your utilisation is how much space you’re really using, because depending on various inventory and storage characteristics, your warehouse won’t be using all of the theoretical storage capacity – it might be as low as 60%, or as high as 90%. Working capacity is the grey area in the middle: what rate of utilisation could your warehouse reasonably hope to achieve?
There’s no set way to work this out – it’ll depend largely on your consolidation levels, your labour costs and your equipment. At the end of the day, working capacity is a means of quantifying ‘full’, and if you know what full means, you can better manage the warehouse.
Clear out obsolete stock
When you’re assessing your inventory, you should immediately notice if you’re unnecessarily holding onto excess stock. It can be tempting to hold onto old stock and clearing out can feel a little like throwing money away. There’s a big but though – hanging onto obsolete stock means you’re damaging your inventory turnover, damaging your return per item, and fundamentally taking up valuable space that you could use to store stock which will sell.
Clearing out any obsolete stock is often the cheapest way to save warehouse space – and one that the majority of businesses can benefit from.
Decide on aisle width
As warehouse managers will well know, warehouse management isn’t as simple as stacking boxes. The layout of your warehouse will have a significant impact on your operations – how do you access your stock?
The biggest warehouse layout consideration is aisle width – whether wide aisle (WA), narrow aisle (NA) or very narrow aisle (VNA). The narrower your aisle, the more storage capacity your warehouse has (up to 50%) but it tends to be that the equipment needed to traverse a narrow aisle is more expensive and more complex to use.
There’s no definitive answer to which type of aisle width is best – each option is a trade off between storage capacity, productivity, flexibility and cost and it will depend on the individual business needs.
Decide on your system
Another layout consideration; you need to decide whether you’re going to use a random location system, a fixed location system or a bespoke combination of the two.
The system you use to allocate stock to space will have a big impact on your utilisation levels. Fixed location is easier to implement, but much less efficient – describing the system whereby each SKU has an allocated space, and one that no other SKU can occupy, even if the space is empty. Random location systems, on the other hand, allow any SKU to use any space – which is more space efficient and will result in a higher utilisation rate, but is also more complex, more difficult to implement and generally less time efficient in terms of how long it takes pickers to find and travel to items.
Choose the right storage units
The next step to saving warehouse space is to ensure you’re using the right storage units for your inventory.
The type of storage units that are most efficient for your warehouse will depend on the type of operation you’re running. If you’re a full-pallet in, full-pallet out operation then your storage should be reasonably simple – standard back-to-back racking will tend to be very efficient.
Case-picking or piece-picking operations are more complex. The key is to try and minimise the amount of wasted space you get in individual storage unit as they begin to empty. It might be that you can consolidate stock into fewer locations, but consolidation can be timely and isn’t necessarily the most efficient solution.
Every business is likely to run some consolidation activity, but if this becomes a constant problem then it’s often a better bet to consider alternative storage units.
The most common solution in piece-picking environments is adjustable warehouse shelving. Warehouse shelving is a highly efficient way to store items, particularly if you have lots of SKUs, and it’s easily adjustable – unlike racking. Adjustable warehouse shelving allows you to move shelving levels as stock becomes depleted, introducing additional vertical space which can be easily filled with additional shelving levels to create more storage locations.
As with systems and aisles, the right type of storage unit will depend completely on the business, on factors such as picking type, picking volume and product sizes.
Slotting
Having the right storage units will only get you so far and you can make your warehouse significantly more efficient by employing good slotting practice.
Slotting rests on the same principle that drives us to keep our pyjamas in the bedroom and the pots and pans in the kitchen: it’s time-efficient. In warehouse terms, the more time your pickers have to spend getting to items, the less cost-efficient the process is. Obviously, it’s not possible for every item to be the same distance to the pickers, but it is possible to work out which items should be near and which can be farther away, depending on picking volume, unit cost and so on.
Slotting is also space efficient. Imagine your inventory generally calls for 1,000 full pallets and 1,000 half-pallets. You could slot them into 2,000 full pallet locations or you could adjust your shelves and create 1,000 half-pallet locations, leaving you with 500 extra full-pallet locations in the same amount of space.
Build a mezzanine floor
This is last on the list because it’s the closest to an expansion plan in terms of expense. Nonetheless, while expensive building a mezzanine floor can be a simple solution that increases your storage space dramatically.
They’re also a fantastic temporary solution if you’re waiting on an expansion, as they can be built incredibly quickly. The requirement for a mezzanine floor is having a lot of vertical space, so they can be a great solution for operations that require a low clearance work area.
Conclusion
Every warehouse manager in the world has, or will have, the warehouse space headache. There’s no one-size-fits-all warehouse solution, and the best warehousing options for your business will depend on a massive range of factors.
At heart though, the principle is this: before leaping on the expansion bandwagon, consider these tips. Most businesses can save warehouse space without significant investment, simply by assessing their business needs and choosing the most cost, space and time efficient solutions for them.
