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Jul 10, 2023

The Complete Guide to Improving Warehouse Space Utilization

Improving warehouse space utilization can improve productivity, enhance safety,

Improving warehouse space utilization can improve productivity, enhance safety, save floor space and offer numerous other benefits. However, many people see it as a daunting task at first. Here are some practical steps to take.

It's not always easy to see where to start when making a warehouse better designed for how people use it. However, data analysis platforms can highlight what's already working well and where people can improve.

For example, a data-driven platform could reveal which warehouse areas are the busiest at certain times of the day. It may also show persistent bottlenecks or indicate accidents are more likely to occur in certain parts of the facility than others.

A data analysis tool will also show a warehouse's fastest-moving goods, as well as those people don't need to access as frequently. Such information helps people learn the best ways to reorganize the warehouse and promote smooth traffic flow.

Warehouse managers can also use data analysis products once the warehouse improvements begin. Studying the statistics will show them if certain changes brought the expected benefits. Payoffs that aren't immediately obvious aren't necessarily indicative of failure, though. They could mean people need to wait longer to see the effects or make minor tweaks to see the advantages.

Data analytics are also useful for maintaining executive buy-in. When leaders see that productivity climbed by a meaningful amount after people made efforts to save floor space or make another change, they’ll be more likely to stay committed to the ongoing warehouse space utilization improvements. Relatedly, they’ll approve more investments to help the company meet its goals.

A recent study showed respondents had an average of 85.6% peak warehouse utilization in 2022. However, 37% of respondents said their utilization surpassed 95% at peak times.

Moreover, 47% of those polled said they needed more space in their facilities, making this issue second only to supply chain disruptions. The research also showed storage areas and receiving docks were the two most congested areas, highlighting them as perhaps most in need of warehouse space utilization improvements.

These are just some of the valuable takeaways people can learn by relying on data analytics tools. Whether a leader wants to save floor space or determine the best location for a new assembly line, hard data can take an executive from doubt to determination for change.

It's also beneficial to recognize what things people should prioritize to make the most significant progress faster. Many leaders realize they can enjoy multiple improvements by examining how to save floor space. Focusing on that aim could prevent trip-and-fall incidents that lead to hospital visits and give employees the perception of an unsafe workplace.

Maximizing floor space can also help people discover they have bigger warehouses than they thought. As companies grow, leaders often approve moves into larger facilities that require significant investments. However, the case may be that the respective businesses could have stayed in the same spaces longer if representatives looked for creative and effective ways to save space.

One of the most impactful ways to save floor space is to store things vertically when possible. Consider a case where a metal-stamping company that kept its dies on a single layer on the floor. Stacking them would have posed a cross-contamination risk of residual oils dripping from a die onto the one below it. Moreover, stacked storage can facilitate metal grit transfer that leads to future product defects.

However, putting them in a single row on the floor also took up a tremendous amount of space that the company could use in more valuable ways. The company invested in custom industrial racks rated for 40,000 pounds of vertical storage per shelf to solve these problems.

This shelving solution was fully load bearing, meaning people could place items along the shelf rather than only over the support beams. That feature made these shelves more flexible for current and future needs. Warehouse managers should use this example for inspiration regarding how they might capitalize on vertical space too. That solution doesn't work for every warehouse area, but it often has impressive effects when deployed strategically.

Many people wish they could gaze into the future before making significant changes to a warehouse. Some efforts that seem like the most appropriate options on the surface ultimately fall short because of unforeseen factors. However, people can use modeling and simulations to reduce the chances of such undesirable realities. For example, some logistics professionals use models to optimize their processes and explore new business opportunities.

One possibility is to create a digital twin of the warehouse, then run various simulations through it before implementing them in real life. A digital twin is a highly realistic, computerized model of a physical asset or location. It could help people experiment with different layouts and how they each affect warehouse space utilization. Perhaps the warehouse currently has a U-shaped flow, but managers believe an I-shaped flow would better support the facilities’ ongoing growth.

The digital twin could also prevent costly mistakes. McKinsey data indicated warehouses spend approximately $350 billion per year on warehousing. However, the company's research also showed digital twins could cause a 20-25% increase in efficiency. The businesses test changes in the simulated environment, then get confirmation of which alterations would be most profitable or otherwise beneficial.

People can see the optimal slotting and production flows or understand how equipment positioning positively or negatively affects overall workflows. Visualizing such details with the mind alone can be challenging. However, digital twins provide the visibility individuals need to identify problem areas and the best ways to cause lasting improvements.

Revamping a warehouse can wholly change how people use the facility. However, such efforts require significant resources and dedication from individuals at all levels of the organization. Setting periodic milestones for everyone to aim for can be an excellent way to keep people motivated. Adjusting to changes isn't always easy, but it becomes more manageable when it's obvious every decision is an action that pushes the organization closer to an overarching goal.

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