One old saying that goes in the working of the warehousing is that, ‘If there is available space in a warehouse, someone will eventually fill it.” Thus, it is not uncommon for the warehouses to be full even during the slow periods.
When does a warehouse run out of space?
A warehouse usually runs out of space because of:
- Seasonal Peaks
- Rapid Growth
- Bulk Discount Buying
- Planned inventory builds due to manufacturing shutdowns
- Slow sales period
- Facility Consolidation
Types of Space Deficiency in a warehouse
Largely, there are three key types of space deficiencies that are noted in a warehouse.
- Holding too much of right inventory
- Holding too much of wrong merchandise
- Using the existing warehouse space ineffectively
In order to address these space issues, it is important for you to understand these issues and the reasons of such issues.
Holding too much of right inventory
When you have the right product in abundance, it appears healthy especially when it comes to customer service as well as order fulfillment goals since the product is always readily available to cater to the customer orders in time. Though the sales staff and the buyers feel happy on fulfilling every order timely however the warehouse tends to operate well below the established safety and productivity standards. So, when you look closely at such type of warehouse, it will reveal pallets of product stacked in dock areas and aisles. Moreover, there is multiple SKUs of product that is mixed in one single bin location. As a result of this, the visibility is blocked leading to lack of ease in finding the needed inventory, multiple handlings of the products, safety hazards as well as decreased labor productivity. Upside however is that such products move quickly across the warehouse and space problems are present just for few weeks.
Holding too much of wrong merchandise
Stocking up too much of a wrong merchandise is a clear proof of incorrect sales production and poor production planning. It also means that the warehouse is incapable of managing the inventory levels rightly. When the levels of right inventory are high it can be handled via extra labor but the wrong inventory only results in inventory lying uselessly in the warehouse for months and sometimes even years. Obsolete inventory often has little or no value in the open market however, the earlier you identify it the quicker it is for the company to cover up the losses and manage the assets.
Using the existing warehouse space ineffectively
Poorly utilized space is one common occurrence in almost every warehouse. It is non exclusive of the type of inventory or the storage conditions existing in the warehouse. Largely, the warehouses are built and equipped only to handle a certain amount of products and limited unit loads. Then with time the warehouses are expected to accommodate keeping pace with the customer demands without affecting the efficiency. This poses to be a problem that gets hard to tackle.
How to maximize the storage space when there is no room to expand?
1. Revamp Racks
When you are seeking space optimization, racking is the first thing to consider. However, before you opt for rack revamping, it is important to consider the idea that determines whether or not the attempt will be worth while or not. So, make a thorough note of pallet heights and every rack elevation. Ideally, the arrangement must have 4 inches to 6 inches of gap between the top of the pallet to the base area of the beam. In case, the racks have occupied a space more than that, then you have possibly found an opportunity for availing the additional space. Before opting for space revamp do consider the fire safety precautionary space, forklift’s operating height, etc.
2. Go vertical
You can maximize the warehouse space by raising the roof. Improvement of the height of the warehouse can definitely serve the purpose of space maximization. This will provide you with the additional levels of pallet storage. However, you must consider the engineering limitations to ensure that the additional height doesn’t become illegal.
3. Storage Space – (Excess + Unwanted) inventory = More Warehouse Space
Get rid of the excess of the right inventory as well as the wrong inventory so as to maximize the warehouse space. You can always order for products in batches so as to ensure that you don’t stock up the warehouse beyond what’s necessary.
4. Use of AS/RS Systems
Automated and Retrieval Systems include a series of mechanisms such as conveyors, lifters, etc. These systems tend to reduce the space that is occupied by aisles. This advantage of AS/RS makes it one of the most sought after idea for undertaking space maximization. There are certain downsides of AS/RS systems. Such systems are expensive and require immense care.
You can use any one or a combination of these warehouse space optimization techniques to ensure that there is sufficient space in your warehouse.