Having your warehouse operating at its peak efficiency is crucial for maintaining a streamlined supply chain. Recognizing that your warehouse is reaching full capacity, typically indicated by an 85% occupancy rate, is a vital trigger for reevaluating your layout for potential expansion or restructuring. The optimization of storage space stands as a key challenge for distribution centers, necessitating additional room for receiving and dispatching goods, as well as accommodating movement equipment and staff efficiently. This article delves into the factors contributing to storage space limitations, underscores the significance of precise design and layout, and unveils strategies for maximizing space utilization with the adoption of a warehouse management system.

Possible Causes of Warehouses Running Out of Storage Space

There are numerous factors that can lead to warehouses running out of space, such as a thriving business or poor warehouse layout.

Booming Business

One possible cause of warehouses running out of storage space is a booming business where products are in high demand, leading to a larger inventory being stored. However, inadequate planning of space utilisation can result in the warehouse becoming overcrowded and running out of storage capacity. This can lead to inefficiencies, delays in fulfilling orders, and potential damage to inventory due to overcrowding. To address this issue, businesses should reassess their space utilisation strategies and consider optimizing storage space through better organization and layout planning to ensure efficient operations and meet growing demand.

Inefficient purchase planning

A common cause of warehouses running out of storage space is inefficient purchase planning. This occurs when the purchase department overbuys due to a failure to forecast demand accurately or because they receive a good deal on bulk purchases. For example, they may buy stock for six months when only two months' worth is needed. This can lead to a surplus of inventory clogging up storage space in the warehouse.

Unwanted Inventory

One possible cause of warehouses running out of storage space is unwanted inventory that is no longer in demand and has been sitting around for months. This inventory takes up valuable space that could be used for more profitable or in-demand items. It is recommended to either move this inventory to another location, return it to the supplier, or dispose of it to free up storage space.

Bad Warehouse Storage Layout 

Bad warehouse storage layout can be a significant cause of warehouses running out of storage space. Even when there is enough space available, if it is not planned and utilized effectively, it can quickly become overcrowded. This can lead to inefficient use of space, difficulty in locating items, and ultimately running out of storage space. It is important for warehouses to have a well thought out storage layout to maximize space and efficiency.

What is Significance of Warehouse Space Utilization and Design?

A well-designed warehouse layout is essential for maximizing space efficiency, increasing productivity, and optimizing supply chain costs.

Warehouse Space Optimisation

Warehouse space utilization and design are crucial for efficient operations in a warehouse setting. By maximizing the space available, companies can store and move goods quickly, leading to a streamlined supply chain and enhanced visibility of inventory. Proper design and utilization of warehouse space can result in cost savings, increased productivity, and improved customer satisfaction. It is essential for warehouses to continuously evaluate and optimize their space to meet the demands of their operations and serve their customers effectively.

Higher Work Productivity

Warehouse space utilization and design are crucial factors in ensuring high work productivity. Research indicates that a significant portion of businesses lose orders due to warehouses being unable to fulfil them. By optimizing space usage and collaborating with operations teams, businesses can improve their warehouse efficiency and meet customer demands more effectively. This emphasizes the importance of strategic warehouse design and management in driving overall business success.

Optimizing Budget and Workforce Allocation

Warehouse space utilization and design are crucial for better budget and labour management. By having the right layout, companies can effectively utilize space, hire the appropriate number of workers, allocate resources efficiently, and create a conducive environment for optimal staff performance. This leads to increased productivity and cost savings in the long run.

Effortless Transportation of Merchandise

Proper warehouse space utilization and design is crucial for ensuring easy movement of goods. The layout you choose should be based on factors such as the size of the warehouse, the types of items being stored, the equipment being used, and the preferred movement patterns. It is important to establish a clear path for the movement of goods from entry to exit within the warehouse. This helps to improve efficiency and streamline operations.

Crafting Strategies for Optimizing Warehouse Space Utilization

To expand the space, there is no need to enlarge the storage facility. This can be achieved through creative methods, such as the following:

State-of-the-art Rack Configuration

One common method to increase storage space is by vertically extending the racks. However, it is essential to have a structural engineer assess the size of the base plate to determine its viability. Alternatively, there are other methods to install racks, such as :

Pallet racks: These racks, when used with a forklift, are an effective way to optimize storage space for a variety of goods.

Carton flow racks: Designed for a first-in-first-out (FIFO) flow of goods, these racks feature slanted panels that facilitate easy access to older items.

Cantilever racks: Ideal for long items such as pipes, steel trusses, and lumber, these racks come equipped with protruding arms for inventory placement.

Mezzanine floor: Positioned between the ground and the roof, a mezzanine floor provides an additional platform without requiring the construction of another level in the building.

Choose Best Layout Plan

U-flow: The receiving and dispatching zones are located on the same side of the facility but are physically separated.

I-flow: Receiving and dispatching operations take place at two opposite ends of the storage facility.

L-flow: The receiving and dispatching sites are positioned perpendicular to each other, with the majority of space dedicated to storage purposes.

Reduce Aisle Width

To maximize space efficiency, consider decreasing aisle width. By reducing from 12 to 8 ft. or 10 to 5 ft., you can potentially save 15% – 20% of total area. Prior to making this adjustment, assess the capabilities of the forklifts to ensure they can operate effectively in narrower spaces.

Evaluate and Adjust Storage Method

Consider transitioning from single-deep to double-deep racking systems and upgrading to higher-density machinery. A reach truck will be necessary to efficiently load pallets onto double-deep racks. Additional options include utilizing push-back and drive-in racks.

Implement a Warehouse Management System

Incorporate a Warehouse Management System (WMS) into your operations to enhance efficiency and streamline processes. A WMS will assess your facility's performance based on supply chain key performance indicators (KPIs), collecting and analyzing vast quantities of data to optimize warehouse storage.

How Nirmalya Enterprise Platform Suite helps Enterprises to Optimize Warehouse Space Usages?

Nirmalya Enterprise Platform Suite, integrated with Business Intelligence and Analytics, enables enterprises to enhance their business and operations. The platform is designed to connect people, processes, and technology, providing a seamless end-to-end solution for enterprises. The movement of goods within a warehouse should be carefully planned, taking into account factors such as warehouse size, stored items, machinery used, and preferred movement patterns. Goods should follow a predefined path from entry to exit for efficient operations.

Nirmalya Warehouse Management simplifies warehouse operations with mobile RF barcode scanning, efficient putaway and picking strategies, task management, return authorization receipts, and cycle count plans. It enables seamless handling of numerous SKUs in multiple locations, eliminating manual processes to lower handling costs and improve warehouse efficiency. By adapting to market demands and enhancing fulfilment processes, it ensures comprehensive inventory visibility from distribution centres to store shelves, ensuring consistent meeting of customer expectations.

Nirmalya Smart Warehouse Management System aims to improve warehouse processes and handle higher volumes more efficiently through the automation of workflows. By strategically placing pallets, shelves, and equipment, the layout of the warehouse can be optimized for peak efficiency. Accurate demand forecasting, just-in-time inventory implementation, and enhanced traceability can all contribute to streamlining operations. Additionally, effective labor scheduling, task assignment based on skill and proximity, and minimized travel time within the warehouse further enhance efficiency. Order fulfillment, delivery speed, and error reduction can be improved for higher customer satisfaction. Seamless integration of fulfillment processes across channels and advanced wave management techniques can enhance picking efficiency and streamline outbound shipments.

For information on how Nirmalya Enterprise Platform Suite can help businesses optimize their supply chain and warehouse management processes, kindly reach out to us at your earliest convenience.