The state of inventory varies by industry and business types. Some companies have bought too much inventory with the recent supply chain challenges and have very full warehouses, and others have encountered difficulty sourcing and/or manufacturing inventory. This blog is for the former customer who has a lot of inventory in their warehouse and it is bulging at the seams.
So, where is the hidden storage capacity in your warehouse?
It might surprise you how much hidden storage capacity there is in your current warehouse. The most common, yet challenging opportunity, is to eliminate obsolete inventory. This is often easily identified by the build-up of dust on pallets and cartons. However, a supportive analysis, is to identify the products that have not been ordered in the last 12-months. You can determine the number of pallets, dollars of inventory, the number of locations and cubic feet of space taken-up with these “dead” items. The results of this analysis can be stunning and support the removal of obsolete items. This is the first area of hidden storage capacity in your warehouse.
We realize the amount of inventory is something the warehouse operator cannot impact, so we now explore the more obtainable opportunities to finding hidden storage capacity. These include the facility layout configuration, aisles widths, clear heights, location sizes, consolidation, and analyzing if you have the right mix of warehouse storage equipment type and elevations.
When you look at a print out of your facility layout, how much white space do you see in the storage areas? If you see more than 50%, then you might have too many aisles and/or the aisles are too wide. This is just one quick method of assessing the use of horizontal space in the warehouse. The facts are your inventory profile (Pallets/SKU), and material handing lift equipment, are both key elements in developing your warehouse layout. Optimizing the layout configuration and aisles widths are the next opportunities for squeezing the most capacity out of your warehouse. There are tradeoffs between labor productivity and space costs to evaluate to justify any capital costs. In addition, considering the current state of your warehouse utilization influences the next steps. If you are operating at 100% storage utilization, the dock is full, and items are stored in the aisles, your position may trend toward maximizing the storage capacity and more capital investment in racking and lift trucks.
The best approach to reviewing storage equipment is to model your inventory to see the resulting pallets per SKU, and optimize the type of storage equipment. Increasing the depth of storage for high pallets per SKU on-hand, improves the density of storage, resulting in fewer aisles and more storage capacity. It is also a labor savings to have those pallets together vs. spread across the building in single deep rack. Integrating item velocity into the equation is done to identify the slowest moving items, and the potential for isolating them into a very narrow aisle configuration with the use of turret trucks and/or operator-up order pickers (for case handling).
The unit load height is another factor to selecting the right storage equipment. It is not likely that all pallet unit loads are the same height, which means a variety of location heights can be used in the warehouse. For an obvious example, it is not a good practice to store a four-foot tall pallet in a six-foot location. Evaluate the ‘standard’ inbound pallet heights from vendors and profile your rack elevations to the optimize heights. While inventory levels are trending up for many, there is also the opposite situation, where partial pallets are common. These ‘short’ pallets can be stored in 24 to 36-inch pallet location heights. Multiple location sizes can increase put-away times to find the right location, but a good WMS can be loaded with the location size and the item dimensions to direct the put-away activity. The decision on the pallet location heights should be carefully evaluated to ensure capacity is not negatively impacted.
There has been increased discussion regarding the width of pallet rack beams in standard selective rack, including the consideration of nine-foot and twelve-foot, compared to the traditional eight-foot. The biggest factor is the size of the pallet being stored, and then evaluating which gives you the most capacity in the racked area. With the use of standard GMA pallet sizes 48 (depth) x 40 (width), eight-foot is the predominant beam length, while twelve-feet is increasing in usage.
A common warehousing practice is to use tunnels / bridges above the travel path within the storage area. Tunnels provide a travel path / crossing aisle for improved material flow and labor savings. Local egress codes often dictate the placement and number of tunnels. When using tunnels they should have as many levels bridging the space above the travel path as feasible with given lift trucks.
A more detailed evaluation, involves the actual size of the upright (depth and column sizes) and the beam height structures used to design the storage equipment. A structural engineer designs these sizes to support the load weights, but you may find slight variations in the resulting options. Do not underestimate the impact in storage capacity gains of an inch adjustment with these dimensions.
The clear height of your building is yet another major factor in getting the most capacity out of your facility. Besides, the obvious use of racking vs. floor storage for low stackable items, you want to maximize the height of storage in your warehouse. This is another item impacted by local codes (fire marshal), which defines the maximum storage heights allowed. Based on these codes, the levels per storage bay and the top of load should be at the highest feasible position.
Unfortunately, the depth of the receiving and/or shipping dock is often the first place encroached upon to gain storage capacity. It is very tempting to add a bay of rack at the end of rows, and eat into the dock staging space, but ironically, this could end in more pallets staged in the aisles. Take a good look at the inbound and outbound volumes to ensure there is enough dock space provided. If the staging space is adequate then additional end of row bays could be a good solution.
There are many other topics to cover, but at this point, we are just listing the other considerations to getting the most capacity from your existing warehouse space:
Take a good look at your layout, related data and the topics covered in our discussion here in order to uncover the potential of your hidden storage capacity within your existing warehouse.
—Norm Saenz, St. Onge Company