Every store goes through a stage where there is just not enough room to store everything anymore. Moving to a new facility may cost too much, ruling out expansion in the process, too. Still, there are some things that you can do for the time being.
Storage density – The store is effectively ―full‖ when the storage density reaches 85 percent. This means that you have 85 percent of the available storage locations occupied. Anything above 85 percent and you have no locations available for new arrivals. This is usually obvious when you see pallets located in the aisles or blocking the receiving and shipping areas.
Reduce SKU quantities – Stores very get often overloaded with too many pallets of the same SKU. Very often, an overzealous purchasing agent will get a ―deal‖ on certain products by buying in quantity. If this quantity turns out to be a six-month supply, the store can become clogged with too much inventory. One should work out a program where these products can be delivered in stages, to reduce the impact on your facility.
Obsolete inventory – Inventory that has not turned over in a reasonable period of time causes one of the biggest problems to a facility that has been in operation for several years. Run a velocity report to see how often each SKU is picked in a year. If the report comes back with a lot of single digit SKUs, you have a problem. This is ―dead inventory‖ occupying valuable storage space. Businesses often do not want to take the write-off on this inventory so it becomes the store manager‘s problem. One should check to see if some of these items can be returned to vendors, sold on ―offer‖, given to charity, or, if all else fails, scrapped.
Re-Slot storage locations – In many operations, order picking takes place directly from the storage location. This can cause ―honeycombing‖ in your storage area. You may have many locations that have been picked down to the point where the remaining product only occupies 10 percent of the space available. If you can create smaller storage locations you can re-slot, or move these products and free up some valuable storage space.
Seasonal variations – Some businesses have a ―lumpy‖ sales cycle that requires high inventory levels for short periods of the year. Stores are often designed for an average inventory level so these high-volume periods can be very painful. Instead of designing a store to accommodate these peaks, it may make more sense to contract some outside storage to help smooth out the ―lumps‖.
Utilize your cube – To maximize the use of a store you need to ―maximize your cube‖. You need to take advantage of all of the vertical space that available. With a conventional fire protection system you can stack products up to 18‖ below the fire sprinkler heads. In an ESFR (Early Suppression, Fast Response) system this distance is 36‖. You may need to reconfigure your existing storage system to take advantage of this space but it could be worth the effort. Create more storage space – The space within a typical receiving area and shipping area is usually not well utilized. It is always possible to add storage locations above the dock doors that do not interfere with receiving or shipping.
If your operation has long rows of pallet racking with fork truck cross aisles in the middle of the rows, consider creating tunnel aisles by adding storage locations above the cross aisles.
Decrease your aisle widths – If you have a conventional store, utilizing pallet racks for storage, you have several options for decreasing your aisle widths. If you are using counterbalanced fork trucks to store products, your aisle widths will be 12‘ to 15‘ wide. Consider using Raymond Reach Trucks that operate in a 9‘ aisle. If you already have reach trucks in your facility, consider changing to Raymond Swing-Reach Turret Trucks that only require a 6‘ aisle.
If you have a large quantity of small-sized items that are picked for customer orders, consider creating a 4‘ to 5‘ wide aisle and use an operator-up Raymond Order Picker to pick these small items.
Increase your pallet storage density – There are several alternatives to selective pallet rack, including double-deep storage, push-back rack, pallet flow rack, and drive-in rack. Each of these solutions has definite advantages for storage density. They also have drawbacks when it comes to pallet selectivity, last-in first-out storage, etc. However, there are tremendous gains to be made. Double-deep storage, for example, can increase the productive use of your floor space by about 60 percent.
Warehouse space often represents 15% to 20% of the cost per order. Moving to new space is expensive and takes a lot of time. Make sure you have assigned someone responsible for your ongoing planning and warehouse space utilization analysis process.