So, You’re Out of Space…What Do You Do Now?
Relocate to a larger facility? Locate a second building and move some of your operation there? Expand your existing facility? Outsource a segment of your operation to a third party?
These are all viable alternatives. However, none of them should be considered until you have made a concerted effort to optimize your existing space.
Areas to look for opportunities to reclaim space include:
Purchasing policies should be examined for opportunities to reduce on hand inventory through reduced safety stock or smaller, more frequent buy quantities.
An examination of historical activity by sku will identify those products with zero demand. These sku’s should be evaluated to determine if they are candidates for liquidation.
An assessment of current storage media may reveal an opportunity to increase storage density. A move to smaller locations can dramatically increase cube utilization.
Fork truck aisles make up a large percentage of a distribution center’s available space. Transitioning to narrow aisle or even very narrow aisle trucks can result in much greater storage density. Racking above aisles (creating tunnels) can also improve density.
It is important to make sure that product is stored in the right size location to maximize cube utilization. Periodic re-warehousing as inventory levels change is one way to continually re-optimize the available space.
Returns take up a huge amount of space in some distribution centers. It is made doubly bad when returns take space that would otherwise be available for saleable inventory. Too often overlooked by management, the returns department is typically rife with opportunities to improve throughput thereby processing receipts faster and minimizing required staging.
Staging of product between processes may be an indication that the overall process needs to be streamlined. By improving the handoffs between areas within the distribution center, you will not only reclaim the space previously used to stage pallets; you will also reduce labor costs by eliminating touches by material handling personnel.
Some of the most underutilized space in a warehouse may be found overhead. Areas above pick modules, pack lines, shipping and receiving docks, value add areas, etc often go unused. Installing a mezzanine or racking over these areas can add significant usable space to the facility.
Your DC or warehouse can be reconfigured to do more in less space. The first step in space optimization is to perform an assessment of your current capacity and identify which of the opportunities for improvement identified above apply to your operation. CEI Logistics has the analytical tools and experience to help you with that assessment. We can examine your current space utilization and offer meaningful solutions. We also design world-class space utilization into a new facility.