OPTIMIZATION TECHNIQUES FOR WAREHOUSES AND DISTRIBUTION CENTERS

Warehouses, distribution centers, and other industrial facilities face some incredibly complex space optimization challenges. Hundreds of SKUs and other materials can move in and out of warehouses on a daily basis, not to mention inventory that is being stored long-term.

In an unoptimized warehouse space, the process of adding new SKUs, ramping up production, or making space for other operational activities can throw the entire ecosystem off balance. By comparison, optimized space utilization in warehouses can make it easier to navigate and adapt to these types of operational changes.

There are many benefits to optimizing the available space in your warehouse or distribution center, such as reducing costs and increasing the amount of inventory that can be stored and distributed. Below, learn the basics of implementing a warehouse optimization project.

Why Space Optimization Matters

According to the Pareto Principle, 80% of warehouse activity is represented by 20% of the SKUs. Knowing which of your SKUs are included in that 20% is central to optimizing your warehouse. Consider a scenario in which an organization’s highest activity items are stored in a back corner of the warehouse. Employees would need to pass hundreds of slower moving SKUs just to reach the inventory that is driving 80% of warehouse activity. 

Clearly, this is a warehouse space that is not optimized for operational efficiency. A better use of available space would be to store those fast-moving SKUs close to the warehouse doors or truck terminal. Even without major renovations, this adjustment would allow workers to reduce the amount of time spent traveling around inside the warehouse, along with the time needed to process and move orders.

Space Planning Tips for Warehouses

There are a number of warehouse optimization strategies that can be implemented to help businesses make better use of their existing real estate:

1. Replace static shelving with high density mobile storage. Have you ever considered how much floor space in your warehouse goes to waste in the form of aisles and walkways? With high density mobile shelving that moves along a carriage and rail system, there is only one aisle of floor space that is occupied at any time. Replacing static shelving with mobile shelving can unlock a significant amount of available space, with no costly expansion projects required. 
2. Make use of vertical space. Many warehouses do not fully utilize their available vertical space by extending their shelving units upwards. Consider storing slow-moving SKUs or parts on a higher shelf, making plenty of room for that fast-moving 20% of inventory down below.
3. Consolidate storage areas. Are the same SKUs being stored in different areas of the warehouse? If so, consolidating these items into one storage location can help you better utilize existing space. This change will streamline the process of retrieving and storing items, as employees won’t have to check multiple locations.
4. Create centralized maintenance storage. Are there certain repair parts or tools that are used frequently by your employees or maintenance staff? Storing these items in different departments can lead to issues like purchasing duplicate parts and slow turnaround time for repairs. Creating a centralized storage area for these items can help your employees tackle maintenance issues and repairs more efficiently.

For warehouses, proper space optimization can reduce order turnaround time, minimize damage and loss of inventory, improve employees safety and job satisfaction, and eliminate the need for costly renovations or expansions when more SKUs need to be stored.

Systems & Space has helped industrial clients optimize warehouse space and boost operational efficiency for more than 30 years. Learn about our high density storage and other space-saving solutions by contacting Systems & Space today.