Woo-hoo! Business is booming! Things are going so well that the merchandising and marketing executives have decided to add inventory and product lines.
But while they’re whooping it up in the front end, in the back end you may be finding that all this growth is cramping your distribution center, decreasing performance and increasing errors.
The immediate answer to questions regarding a lack of space is to seek more space, but this may not always be feasible — or wise, as adding space can increase your labor costs. Here are a few low-cost solutions and high-tech options to help you ease the space crunch.
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 holding only five small units? Take a look at your stock movement and reorder quantities, and compare them to the space you’ve allocated for storage. Consider moving items to a more compact medium. Move items from pallets to pallet shelves, from pallet shelves to bin shelving, or from 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- or 30-ft.-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? Can you move an operation such as packing, box making, or labeling to an upper mezzanine level? What about a supervisor’s office? Placing the office at a higher level can not only save space but can also make it easier to supervise the floor.
Get rid of obsolete or seasonal products
Obsolete inventory will cost you money year after year, and the best thing to do with it is to get rid of it. The one-time writeoff 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 offsite storage in the quiet season.
Cross-dock your fast-moving SKUs
Consider bringing your fast movers into 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. wide to 9 ft. wide, or make them 5-6 ft. wide if you are picking from shelves and not using pallets. VNA (very narrow aisle) systems can actually move and store pallets in aisles as narrow as 5 ft.
Consider AS/RS: An automated storage/retrieval system (AS/RS) — horizontal carousels, vertical carousels, 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.