Warehouse capacity, or the lack of it, is a very common warehouse problem. Let me share a few simple tips that might increase your warehouse capacity, to extend the life of your warehouse. All of these have worked well with dozens of our clients at Logistics Bureau.
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TIMESTAMPS (in case you want to skip) 👇
0:00 Intro
2:33 Review Excess and Obsolete Stock
4:25 Slotting
6:30 Aisle Width
7:43 High Density Storage
8:41 Mezzanine Floors
9:00 Things to Remember
9:55 Outro
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This week, we're tackling a common issue: warehouse capacity. Many businesses are finding themselves running out of space, and it's been a growing trend, especially in the last few years. At Logistics Bureau, we've seen this challenge persist since COVID, with companies trying to retrofit or redesign their warehouses to fit more inventory. But before you rush into building a new facility, let me share some practical tips to help you optimize your existing space.
First off, when is a warehouse considered full? The general rule of thumb is around 85% capacity. This allows for the necessary operating space to move products in and out efficiently. If you go beyond this, it’s like trying to find a parking spot in a full shopping mall—inefficient and time-consuming.
A significant reason for space issues often comes down to inventory management. Whether it’s inappropriate purchasing policies, poor forecasting, or excessive stock due to promotions, these factors contribute to clogged-up warehouses. For example, while purchasing in bulk might lower the unit cost, it often results in too much stock, taking up valuable space. Similarly, merging businesses or rapid growth can lead to overstocked warehouses as they struggle to rationalize their networks.
One of the key things to look at is your stock cover—how much of it is working stock versus excess or obsolete stock. It's common to see businesses sitting on millions of dollars worth of excess stock simply because they don't want to write it off. Regularly review your aging stock and ensure that slow-moving or obsolete items aren't taking up valuable space.
Now, let's talk about solutions. Slotting is one of the most effective ways to optimize your warehouse. By rearranging where items are stored, particularly placing fast-moving products closer to the dispatch area, you can reduce travel time, improve productivity, and free up space. This simple adjustment can lead to labor cost reductions of up to 20%.
For those with standard warehouse layouts, consider adjusting aisle widths. Switching from standard counterbalance forklifts to articulated trucks that operate in narrower aisles can significantly increase your storage capacity. I’ve seen clients recover up to 30% more space by making this switch.
High-density storage solutions, like vertical lift machines or rotating carousels, can also be game-changers, especially for industries dealing with small parts. These systems bring products to the picker, maximizing space and reducing the need for additional warehouses.
Lastly, don’t overlook the potential of mezzanine floors. Adding a mezzanine can double or triple your picking capacity without the need to expand your warehouse footprint.
In summary, before considering a move to a larger facility, explore these strategies to maximize your current space. From optimizing inventory management to adjusting storage layouts, these tips can help you delay or even avoid the need for a new warehouse.
If you’ve faced similar challenges and have additional tips, drop a comment below. Thanks for watching, and see you next time!
#warehousecapacity #warehousedesign #warehousespace
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