How can warehouse space and congestion be managed properly

How can warehouse space and congestion be managed properly

One of the pertinent points while evaluating multi-channel warehousing is to define its capacity. According to the supply chain and logistics traditions, a warehouse or a distribution centre is said to operate at its maximum capacity when its occupancy hits 85%. Managing inventory is one of the most crucial challenges that one can face while trying to exact the maximum potential out of his warehouse space. When occupancy levels reach a maximum, the same is observed across the storage, receiving, shipping and processing areas. This results in an effective drop in efficiency, from a mobility and storage point of view. Pallet movement becomes immensely restricted and every step in movement and replenishment of inventory might take several actions to be completed. 

What is the result when a warehouse reaches 85% capacity :

When a warehouse or distribution centre reaches 85% occupancy, it can be said that there is effectively little or no storage space. Congestion sets in and movement of goods becomes an arduous task. It is often observed that the staging areas for goods are used as alternative storage options. It is also seen that storing space is taken up by the aisles and hence moving a particular product to a definite location involves relocating another product. All of this is quite tiring. 

Different reasons for warehouses and distribution centres to run out of space :

The various reasons as to why distribution centres and warehouses exhaust their spaces can be discussed below. 

  • Growth in business : A booming business implies that all the products concerning the business are getting sold to the clients and consumers at a rapid pace. This would lead to the reception of more inventory and thus leave the warehouse struggling for more space.
  • Purchasing department mistakes : It is often observed that the purchasing unit of the distribution centre purchases stocks that would last for more than six months, while the stock clearance happens every two months. This would lead to an accumulation of stocks and hence a congestion in the warehouse.
  • Obsolete inventory : An obsolete or dead inventory is one which has been stationed within the warehouse and has been unable to move or be shipped, because of a number of reasons. These should be moved to a less-congested spot because piling up of obsolete inventory results in hindrance of stock movement. 

Ways to improve space management and utilisation in a warehouse :

There are various processes which would effectively increase warehouse space and clear the clutter which has occurred due to the above mentioned reasons. These can be enumerated below.

  • Evaluation of extending vertical racks is one of the easiest operations that would lead to the increase in warehouse space.
  • One of the best methods to extend the warehouse space is to install a mezzanine above the floor level process like shipping or receiving area; as this almost leads to doubling up of warehouse space. 
  • If the equipment in the warehouse and distribution centres are capable of operating within the narrow aisles, then the aisle width can be shortened accordingly.
  • Evaluating the storage medium is of utmost essence and the switch to high-density storage medium like multi-deep racks; is deemed necessary.
  • Certain inbound products appear in half-pallet quantities and therefore half-pallet locations should be specified in the warehouse because they save a lot of space.
  • Leveraging the warehouse management systems for directed put-away of pallets to specified locations within the warehouse results in saving a lot of space. 
  • Usage of underutilised spaces to store pallet racks full of supplies; like the space above receiving and shipping doors, shelves above the conveyor and similar ones, results in much needed storage alternatives. 
  • Storing products in trailers might often seem unconventional, but it is good for seasonal requirements and does not make a mess of the storage area. 

These are the most effective ways to boost warehouse space utilisation and decluttering the warehouse so that congestion does not set in.

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