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Horizontal v vertical: six factors to consider when expanding capacity

07 May 2024

Warehouses and distribution centres need to stay agile and offer a wide variety of products to keep up with changing customer demands.

STANDALONE WAREHOUSES and distribution centres are certainly experiencing increased activities and therefore need to boost capacity. The growing number of stock-keeping units (SKUs) is taking up more physical storage space than the current layouts can handle.

Aside from a physical building expansion, which may not be feasible in many cases, traditional solutions to expand capacity are to either free-up floor space by changing the horizontal arrangement of the current facility or adding more levels to current racking to grow storage vertically. There are pros and cons to each option, so before making a decision, it’s important to carefully consider many aspects of both current and future operational needs. Here are six things to consider when deciding whether to expand warehouse capacity vertically or horizontally.

Factor #1: Facility height and infrastructure

While there may be infrastructure changes to accommodate a horizontal rearrangement of the facility, such as utilities and fixed areas (shipping & receiving, restrooms, etc.) there are other areas that may be evaluated for resizing or elimination (office areas, battery rooms, etc.) to reclaim needed space for capacity. For vertical expansion, the ceiling height of your facility isn’t the only factor to consider if additional racking can be added safely. 

Overhead infrastructure such as lighting, electrical, fire suppression, and HVAC systems may also need to be altered or rerouted. Do these obstruct the use of higher racking, can they be moved and what are the cost and safety compliance implications of the relocation? In addition to looking up, one should also look down and check the flooring to ensure the weight capacity of the warehouse flooring is enough to handle the additional weight of the vertical racking and extra SKUs it will be holding.

Factor #2: Current racking type and age 

Some types of racking, particularly older racking, may not be modular to accept additional racks stacked on top of it, so purchasing new racking could be necessary. The weight capacity of the lower sections should also be double-checked to ensure it is able to cope with the additional weight that will be placed on top of it. Sometimes, to increase higher weight capacity, column reinforcements may need to be installed or racking may need to be replaced with types that have higher weight capacity - adding more cost to a vertical option.

Factor #3: Forklift capabilities

While less of an issue in a horizontal reorganisation, assuming throughput levels can be achieved, vertical expansion could involve investing in new forklifts – depending on the current reach height and weight capacity of your equipment. As part of your evaluation, it is smart to check these factors for your current forklift fleet to determine if they are sufficient or will need to be replaced. Forklifts with higher reach heights are often more costly than forklifts with lower height capacity as well and sometimes require retraining operators due to difference in equipment controls.

Factor #4: Equipment power needs

Even if your current forklift fleet will suffice in terms of reach height and weight capacity, your batteries and chargers should also be reviewed to ensure they are able to handle the additional workload. Forklifts require a little extra power in higher lift applications because the higher positions require more energy to lift and lower to accommodate. This often taxes traditional flooded lead acid batteries – shortening their productive period per shift. To make existing lead acid batteries suffice, they may need to be changed and charged more often. So more chargers and backup batteries, requiring more electrical infrastructure, maintenance (watering and equalising) and storage space will be necessary – countering the objective to free up space for more storage. Intermittently used forklifts are most likely not impacted because there is more time to charge between uses. 

But for forklifts in consistent operation, new, higher capacity batteries such as lithium-ion or thin plate pure lead (TPPL) that are designed to stay in the equipment and charge during breaks may be needed to meet extra demand. If you’re not sure what type(s) of battery technology you need, then coupling a power study with an application simulation provides a clearer picture so you can make your decision based on data and not risky guesswork. 

Factor #5:  Throughput requirements

For horizontal reorganisation, added pick times are highly dependent on how efficiently your facility is laid-out, based on the most common material flow paths. But when adding vertical racking positions, pick rates decrease as position height increases as it’s a longer vertical distance for the forks (and load) to travel and operators need extra time to line up the forks with pallet slots at higher racking levels.

Although a single high-level pick may take only a few seconds longer, multiples of them can add up to hours over a week, or even a single shift based on the mix of SKU positions. In addition, higher picking forklifts draw extra power, so those with flooded lead-acid batteries may need to go offline more frequently to be charged or changed – also affecting throughput. This is a key reason that a quantitative, data-based approach is critical to making an informed choice on power. 

Factor #6: Anticipated growth in throughput demand

Keep in mind, someone built your facility to accommodate a certain amount of throughput, but now you’re making adjustment because that amount has changed over the years. Thus, when evaluating your plans, you should consider what the potential for change and growth is in the future. If future demand involves more inventory space and throughput needs, planning to accommodate that in terms of facility, equipment and even power should be part of your calculations.

Initial step: Rethink your battery room

A traditional battery room for lead-acid battery storage and change-out creates non-revenue generating floor space that can account for hundreds to thousands of square feet. Consider upgrading your forklift power sources to advanced opportunity charge technologies such as TPPL and lithium-ion batteries. They eliminate the need for changing batteries and the battery room to accommodate spares like traditional lead acid batteries require. This enables you to free up that floor space for more storage. The initial cost of a lithium-ion or TPPL battery will be higher, but they have a lower total cost of ownership over the long term, especially when you consider the cost of the space your battery room occupies. 

These factors are merely a guide when considering the best approach to expand storage capacity. A full evaluation will be significantly more involved. Contact EnerSys to conduct a power study and EnSite simulation to identify the best power options for your operation now and in the future.

For more information, visit www.enersys.com