The Skinny on Space Utilization Feb 7, 2007 11:51 AM
, By Jerry Vink
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Finding room in the distribution center
for product and necessary processes often ends up being a game of
Tetris. Ineffectively placed pieces decrease your time to react, space
starts getting tight, and placing new pieces becomes a challenge.
But unlike with Tetris, you can’t
simply get a clean screen to start over within your DC. Distribution
centers must work to relieve congestion through cost-effectively
optimizing the space within the four walls of the facility. This
requires a two-pronged approach: minimizing space requirements and
maximizing space utilization.
Minimizing space requirements Distribution professionals understand
the value of warehouse management and other software systems, but not
all of them understand that failing to keep these systems tuned can
lead to wasted space in the DC. Product master information that affects
storage rules in put-away logic, slotting, and other functionalities
must be kept current. Storage inefficiencies can result from inaccurate
product dimensions, pack quantities, or pallet sizes.
Partial pallets and partially filled
storage locations, like poorly placed Tetris pieces, are of little
concern until things get tight. Often viewed as non-value-added work,
combining partial pallets, consolidating block (bulk) stack pallet
locations as product moves out, and relocating partial pallets to
smaller locations are processes that are mandatory when space is at a
premium. If warehouse personnel can bypass first in/first out (FIFO)
rules they can direct partial pallets to pick locations or replenish
pick locations with partial pallets first.
Work with your suppliers to provide
storage relief. They may schedule smaller shipments more frequently to
reduce the amount of inventory on hand, or they may be able to
drop-ship directly to your customers.
Dust-covered cartons are indicative of
wasteful storage. While often out of DC managers’ control, excess
inventory or obsolete SKUs should be properly addressed: Holding on to
a discontinued SKU within your DC ineffectively uses precious space,
and a decision has to be made as to disposition.
Product slotting in pick areas is
another maintenance consideration. Done by expert analysis or through
slotting software applications, slotting manages the location of SKUs
based on dimensions and weight considerations, pick velocity, and
family groups (style, store, or vendor). Storage-media optimization
requires determining the best storage media (pallet, shelving, flow
rack) and the amount of space required within the media based on a
product’s cube velocity. Ongoing slot maintenance may enable you to
regain space when faced with the proliferation of SKUs, allowing you to
postpone expansion of pick areas.
While not an overnight solution, it may
be advantageous to evaluate product packaging redesign as a way to
decrease space requirements. This could lead to additional benefits
such as decreasing packaging and freight costs.
Maximizing space utilization Use the cube. We’ve heard this time
and again, and we usually do a good job at it. Nonetheless, voids
continue to appear between those Tetris blocks when things aren’t done
just right. Most people use their floor space well, filling every open
spot possible; however, they may not be effectually using the height of
their buildings.
For pallet storage, there are a number
of options-block floor stacking, drive-in/drive-through racks,
double-deep racks, pallet flow racks, pushback racks, selective racks.
There are also many choices for small-item or carton storage-bin
shelving, wide-span shelving, carousels, drawers.
With all these options, you need to
keep some basics in mind. For one thing, as space utilization
increases, flexibility and access usually decrease. With pallets, the
greatest flexibility comes from selective racking where any pallet can
be accessed directly without moving other pallets and, if the rack
beams are uniformly spaced for the largest loads, any pallet received
can be stored in any location. There is a space utilization cost for
this flexibility, however.
If selective racks are right for your
business, as is the rule rather than the exception, store as high as
practical (six high vs. four results in a 50% gain per square foot),
and select configurations to store two or three pallet heights. A
limited number of storage locations set up for short or partial pallets
will increase storage with minimum impact on flexibility. Short pallets
can always be stored in larger openings, so err on the low side when
determining the quantity to set up. Safety should also be kept in mind;
product that comes with short pallet heights is usually crushable or
very heavy. Rack beam and rack upright capacities must be checked
before double-stacking these loads or adding additional storage levels
to existing rack structures.
With selective racking, also do your
homework on equipment types vs. aisle widths. Narrow aisle
configurations with reach trucks and very narrow aisles with man-up
turret trucks vary in storage density and equipment price points.
If you’re willing to sacrifice
flexibility, the other options in pallet storage may be right for your
business, especially when fewer SKUs and higher volumes per SKU are
involved. Block-stacking stable, firm product to four or five levels,
several pallets deep and wide, provides excellent space utilization.
The product must be right for the application, FIFO or lot control may
come to play, and consolidation to free up floor space for other
products over time is a necessary labor expense. Similar issues arise
with the pushback, double-deep, and other methods that provide
excellent space utilization: You must be balance space utilization with
flexibility, initial cost, operating costs, product mix, and product
variability to maintain a distribution-on-demand facility.
Nonstorage areas that occupy a
significantly smaller portion of most facilities should not be
overlooked in your quest for space. Hanging conveyors and other
equipment such as void-fill systems from the ceiling frees up floor
space and improves forklift traffic flow and safety. Spiral conveyors
and vertical lifts are useful substitutes for incline conveyors when
horizontal space is limited due to proximate aisle ways.
Mezzanines are also effective ways to
free up floor space and improve traffic flow. These raised work areas
can be used for office space, value-added services, quality assurance,
conveyors and processing equipment, supply storage, parts rooms, or
file storage. Mezzanines are very effective when used over dock and
staging areas.
When space is tight, remember to
simultaneously maximize space utilization and decrease space
requirements. Distribution-on-demand is achieved when companies can
respond to changes in demand while shipping customer-compliant orders
at the least cost. This requires inventory to be readily accessible and
accurate, which is not customary when available storage space is
scarce. There are numerous cost-effective ways to maximize space
utilization without expansion, and there are many ways to decrease
space requirements through continuous process improvement. Often the
biggest challenge is identifying which is most appropriate for a
particular operation.
Jerry Vink is the vice president of engineering improvement with Mason, OH-based supply chain services provider Forte.
The Skinny on Space Utilization 
