Cramped Space a Problem in the DC?

Are you running out of space in your facility? While business growth may prompt the boss to add inventory and product lines, the effect of growth on the distribution center can be negative. Growth can decrease your performance and increase your errors. Space problems can occur so gradually that you may not even be aware of them. The easiest answer to a space crunch is to get more, but this may not always be the wisest decision. There is often a tradeoff between space and labor and adding space can actually increase your labor costs. Fortunately, there are some strategies can improve both space and labor! Here are a few low cost solutions as well as some higher tech equipment and system based options.

Stop storing air: Identify areas in your facility where you are wasting space by storing product inefficiently, or by not storing anything at all. Walk your facility and look at the cubic utilization in all major areas. Are there areas where you see a lot of space around the product with no reasonable explanation – for example, a pallet with only two cases on it or a shelving location that has a large tote filled with only five small units? Take a look at your stock movement, reorder quantities, and compare them to the space you’ve allocated for storage. Consider moving items that are in a storage medium that is too big to a more compact medium. Move items from pallets to pallet shelves, pallet shelves, to bin shelving, or bin shelving to a compartmentalized tote. Totes with compartments can store tiny parts very efficiently. If you need even smaller storage, consider drawers with compartments. Look at the spacing between shelves. If you use totes with a notched finger grab in the front, you don’t need more than an inch or two of clearance to the next shelf or beam level.

Use your entire vertical space: Do you have bin shelving on the floor and a 20-foot or 30-foot high ceiling? Consider replacing your bin shelving with a mezzanine or purchase shelving units with which you can support additional levels or catwalks. Do your rack uprights allow you to store product high up or do they end leaving open space above? Are you using your walls for rack storage? What about the space over dock doors? Do you have rack over your truck aisles? You can create a “tunnel” that runs underneath high rack storage bays. Can you move an operation like packing, box making, or labeling to an upper mezzanine level? What about a supervisor’s office? Placing the office at a higher level can save space and also make it easier to see what is going on on the floor.

Get rid of obsolete or seasonal products: Obsolete product will cost you money year after year, and the best thing to do with it is to get rid of it. The one-time write off will allow you to focus on distributing items that you can actually make money on. If you have a lot of seasonal product that doesn’t move off-season, consider moving it to a bulk storage area or even to off site storage in the quiet season.

Cross-dock your fast moving Skus:
Consider bringing your fast movers in to your facility just-in-time, and cross-docking them to outbound trucks. This can work in situations where you have the ability to coordinate lead-time. You can store the cross-dock items in a bulk warehouse or schedule trucks to arrive as you need them. Obviously the reliability of your inbound stock is critical – if the truck doesn’t arrive, you can’t ship your orders.

Compress pallet storage: Consider changing your pallet aisles from 12-ft. to 9- ft. or make them 5-ft. /6-ft. if you are picking from shelves, and not using pallets. VNA systems can actually move and store pallets in aisles as narrow as 5-ft.

Consider AS/RS systems: Automated Storage/Retrieval Systems (AS/RS) such as horizontal carousels, vertical carousels, or vertical storage towers can save 50% or more of your floor space. If you have nowhere to expand in your present facility, and moving is not an option, you want to consider AS/RS equipment. AS/RS systems can dramatically improve your space utilization, and save labor as well.

Sam Flanders is president of Durham, NH-based Warehouse Management Consultants. To learn more, visit

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