It’s a challenge that distribution center and warehouse managers constantly face: reducing costs by efficiently utilizing a facility’s existing space. When you no longer have enough warehouse storage space to work with, you can use your current facility to create additional space or add some new space to it. The most efficient, least-expensive solution is to use whatever hidden space you have in your facility.
Warehouses run out of space over time, due to slow sales, poor utilization of existing space, consolidation, scheduled inventory builds, large discount buying, seasonal peaks, and rapid expansion.
The issue of space is a problem that happens in many warehouses. Your end goal is to achieve maximum space utilization and efficiency by optimizing your warehouse functions. Warehouses are divided into designated areas to support the everyday processes that take place.
Your warehouse must accommodate four primary functions:
- Value-added procedures
- Inbound operations, including returns and receiving
- Outbound operations, including staging and picking
- Product storage
A year’s worth of history along with three to five years’ worth of sales growth and project inventory is required to analyze these four functions.
Objectives for Warehouse Design
When redesigning a warehouse, there are five primary objectives to keep in mind:
- Providing economical storage as it relates to damage of material, operational safety, and handling labor, as well as use of space and equipment costs
- Allowing for more efficient material handling
- Efficient use of space
- Maximizing flexibility to meet changing handling and storage requirements
- Making the facility a good housekeeping model
Some warehouse facilities employ several storage methods, including different types of mezzanines or racking. When you combine different storage systems together, you can maximize the utilization of your warehouse space, as long as the storage mediums you select are based on inventory movement.
Analyze Your Inventory
You should begin your analysis by observing your average growth projections and inventory levels by SKU. This analysis should clearly leverage your facility’s defined units of measure (widgets, pallets, cases, eaches, etc.). You will also need to consider the variations you have between your SKUs:
- Are your products date-sensitive?
- Do any of your items require refrigeration?
- Do you use material handling equipment to move certain product groups?
- Do you have a wide range of sizes and weights that could cause product damage or pallet building issues?
This analysis will help you sort all of your SKUs into different product categories, and classify your products by the number of picks or shipments that are involved over a period of time. To reduce travel time, high movers can be stored together inside of each pick zone, which will improve your warehouse’s overall efficiency. Your SKU classifications should be set up based on movement velocity (slowest-fastest movers). For instance, 1, 2, and 3 can reflect a velocity from 1 – fastest to 3 – slowest.
Now that your inventory is separated by measurement units, velocity, and product category, you will need to balance your inventory by conducting a slotting analysis. Slotting is a process that involves defining the size and quantity of your reserve and pick locations. This can be determined by analyzing the combination that will work best in forward pick locations, based on unit of measure, velocity, and product category, as well as where your reserve inventory should be stored for each type of product category based on velocity. In each unit of measure that is inventoried, you will need to have the cubic volume and dimensions for each product on hand. When determining pick face sizes, it is critical to balance inventory with picking and replenishment. You can determine the appropriate sizes of your pick faces by analyzing the cube, the velocity, and how often you plan on replacing each velocity and product group combination.
To analyze the flow of products to the dock, you must consider pick units of measure and shipment order profiles when you are allocating space for shipping and picking areas. When product categories and units of measure are separated into different pick zones, pickers can focus more of their time on picking pallets, cases, or eaches in certain zones, which will increase picking productivity.
Another point to consider when you are planning pick process flows is to determine whether you plan on implementing order picking or batch picking in your facility. Environments that involve batch picking typically use conveyors to transport products to the dock for shipment and sortation. Pickers often pick to a final shipping pallet in an order picking environment, which requires a lot of travel throughout the warehouse. As an order picker, it’s quicker to pick from the floor than it is from high-up racks. Movers A and B must constantly be on the floor when being picked, while slower-moving products can be stored in the racks above and replenished as needed.
Here are some additional tips for reducing space constraints and increasing shipping speed:
- Using double-deep pallet racks can increase your floor space’s productivity by 60%.
- To allow for easy access and shipping of older products, newer products should always be stored behind them.
- Use a rotating shelf system, designed for easy access and shipping, for products that have a limited shelf life.
You may want to consider using drive-in storage racks if you have any products that need to be stored long-term. This can increase your warehouse storage density by 75%.
To maximize efficacy and space while enhancing productivity and decreasing warehouse costs, Stein Service & Supply can configure a warehouse design to meet your storage and material handling needs.
