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Optimizing Warehouse Space With the Right Inventory

One of the simplest and most effective ways to increase your operation’s bottom line is to make the best use of your available warehouse space. Organizing your warehouse for optimum efficiency saves labor, speeds throughput, and could reduce worker fatigue and injury.

Space optimization in a warehouse is not rocket science, but it requires forethought. Here are a few tips for making the most of your limited warehouse space.

Do the Math

Warehouse operators might know how much storage capacity they have, although it is wise to do these calculations periodically because the way an organization uses specific spaces changes over time. However, many operators do not know how much space their inventory actually requires.

Knowing both numbers could show you exactly how much excess warehouse space you have. Understanding your excess capacity allows you to organize more strategically to free up space that could be put to better use.

Know What Moves

Keeping high-volume items near the packing area is one way to save money with little effort. Reducing picking time for items that ship out frequently could make a big difference to your bottom line.

By the same token, reserving inconvenient or hard-to-access warehouse space for slow-moving items and safety stock makes good sense. If it takes a long time to get there, you want your workers to go there as infrequently as possible.

Finally, limit the safety stock to the degree you can. Running out of an item has customer satisfaction consequences, so keeping a small reserve of popular items makes sense. But allocating significant warehouse space to safety stock could be a drag on your bottom line.

Invest in Appropriate Equipment

The way you equip your warehouse has a huge impact on efficiency. Consider the type of shelving you need to store and retrieve the merchandise your warehouse handles safely. You may need various shelving systems for different parts of the warehouse.

Efficient use of your vertical space increases your capacity. However, storing items high could raise safety concerns, as pickers might need to climb ladders or use mechanical lifts to access them. Depending on the products your warehouse handles, robots could mitigate the need for people to put themselves at risk. If small, lightweight items are stored high, drones could retrieve them (one day in the future), while automatic storage and retrieval systems could manage larger, heavier items.

The more automation you can introduce, the more efficient you are likely to be. Automated warehouses tend to be safer because machines handle the tedious tasks that cause fatigue and injury. Warehouse operators could investigate autonomous vehicles, drones, and other automated systems that might streamline their operations.

Select Software with Optimization in Mind

Warehouse management systems (WMS) integrate all essential warehouse functions like ordering, inventory control, fulfillment, stocking, receiving, and shipping. Some also provide space optimization and organization capability.

Breaking down warehouse space optimization into discrete components is labor-intensive and there is a risk that external demands or changes will postpone part of the process, leaving the warehouse only partially optimized. While adopting a software system that handles every aspect of warehouse optimization might require a higher initial investment, the return is likely to be worthwhile.

Use a 3PL Provider for Expert Assistance

If optimizing your warehouse is daunting, you do not need to tackle it alone. Consider outsourcing the project.

Third-party logistics providers have deep knowledge of best practices for warehouse space optimization and efficiency. Working with a 3PL could provide you access to technology and expertise that is scalable, customizable, and cost-effective.

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