Running a warehouse properly requires great efficiency and accuracy. With so much inventory moving in and out, a lack of proper organization can lead to productivity issues and cause losses. That’s why seeking a clean and secure warehouse storage solution is paramount. Such a solution will ensure that you’re always on top of things as far as proper warehouse management goes.
Warehouse Storage Optimization Objective
The basic concept of warehouse optimization is to ensure that goods are stored in the most appropriate space while minimizing wastage. A common problem many warehouses face is running out of storage space. This problem can be due to rapid growth or seasonal peaks during which demand for certain goods plummets.
Warehouse storage optimization aims to resolve all such problems by utilizing all available space most efficiently without compromising productivity.
How to Optimize Warehouse Storage
Making the most of your warehouse storage space includes doing some key things. These include:
1)Calculate the Warehouse Storage Utilization
Knowing how much storage space is available at your warehouse is the first step in the optimization process. To determine this
i)Calculate the total storage area: This is done by measuring the total floor space of the warehouse, ensuring to get the specific space size for places like the office, kitchen, bathrooms, or any other space not used for storage. Subtract the combined area of these areas from the total warehouse storage area. This should be the space available for inventory storage.
- ii) Calculate maximum storage capacity: Different goods occupy different amounts of space. Knowing how much the average-sized box of a particular product occupies will help you optimize storage space. A good way to do this is by using the storage rack’s dimensions to get their surface area and volume.
iii) Determine the potential storage area: The warehouse needs aisles and other free spaces where workers can move around while working. Divide the maximum storage area in (i) by the maximum storage capacity in (ii). Express this figure as a percentage. Ideally, you should have a figure between 22 and 27 percent. Any figure outside this range could indicate wasted space or one that’s too narrow for efficient productivity.
2) Invest in the Right Warehouse Storage System
The right warehouse storage system can make all the difference, ensuring minimal wastage while maximizing efficiency.
Depending on your warehouse management style and inventory, you can choose the storage system that works best for your situation. Examples include:
i)Floor or block stacking: For warehouses with low-set ceilings, this method is ideal. Using unit loads like crates or boxes, inventory is packed one on top of the other until the maximum ceiling height. This method favors the storage of robust products like refrigerators or washing machines.
- ii) Pallet flow racking: Some warehouses handle products that come in and out continuously. Pallet flow racking is ideal for such warehouses. The warehouse can be designed in such a way that there is a sloping lane which will come in handy when goods are offloaded at the warehouse. Gravity will do the rest, helping to move the pallet into the warehouse where the goods will be stored.
Other commonly used methods include the mezzanine flooring system and the push-back racking method.***
3) Always be Mindful of Your KPIs
Key performance indicators (KPIs) will help you know whether your warehouse storage system is on the right track. KPIs will give you crucial information to enable improvement.
i)Carrying cost of inventory: This is the cost associated with storing goods at the warehouse for a particular period. It includes costs of damage, obsolescence, and storage.
- ii) Inventory turnover: Not all goods leave a warehouse at the same time. Some tend to stay longer than others. This phenomenon is represented by inventory turnover, indicating how quickly products are replaced within a certain timeframe.
iii) Inventory-to-sales ratio: Sometimes, there’s a sudden demand for particular types of goods, leading to increased orders for them. The inventory-to-sales ratio helps to identify whether or not your warehouse can handle such increased demands.
- iv) Space utilization: This is a useful indicator of how much space inventory takes up versus the total warehouse storage capacity.
Importance of a Warehouse Management System (WMS)
Most of the work involved in organizing and streamlining warehouse storage becomes easier with a warehouse management system (WMS). WMS is made up of software and processes that control all warehouse operations. This ensures that proper inventory records are kept from the moment goods are brought into the warehouse. Utilizing WMS means there is efficiency and cost-effectiveness.
Ultimately, which warehouse storage system you opt for, efficiency is the goal.