Sales and Fulfillment

Warehouse optimisation and layout design

How to know that your warehouse is full? An 85% occupancy is a decisive indicator that your warehouse is full and that you need either restructuring or expansion to make more space.

Optimising the storage space is one of the major challenges distribution centres face. To keep the supply chain running smoothly, you need extra space for receiving and dispatching the goods and the movement of equipment (forklifts, drones, and trolleys) and workforce.

This article explains the reasons warehouses exhaust storage space, the importance of the right design and layout, and ways to maximise space with a warehouse management system.

Reasons warehouses exhaust storage space

From booming business to bad warehouse layout, there are several reasons warehouses run out of space –

• Booming business – Your products are in high demand, and so you have stored a larger inventory to meet the demand. However, you have not planned the space utilisation well.
• Inefficient purchase planning – The purchase department overbuys either because they fail to forecast the demand or get a great deal on bulk purchases. In the latter case, they may purchase a stock for six months when they need it for only two months.
• Unwanted inventory – This inventory is no longer in demand and has been lying around for several months, taking up space. It is better to move this inventory to some other place or return it to the supplier or destroy it.
• Bad warehouse storage layout – You have sufficient storage space but have not planned and utilised it well.

Why is warehouse space utilisation and warehouse design important?

A great warehouse design helps you in optimal space utilisation, higher productivity, and better supply chain cost optimisation.

Warehouse space optimisation

Better warehouse space management helps you store and move the goods quickly. You have a streamlined supply chain and complete visibility of the warehouse.

Higher work productivity

Statistics show that about 67% of businesses took their orders elsewhere when the warehouse was unable to fulfil the order. Warehouse and operations teams can work together to utilise the space better and increase work productivity.

Better utilisation of budget and labour

The right warehouse layout will help you utilise the space well, hire the right number of workers, allocate resources efficiently, and create an environment where your staff can perform their best.

Easy movement of goods

The layout you choose should depend on the size of the warehouse, the items you store, the machines you use, and the type of movement you prefer. From entry to exit, the movement of goods should be on a pre-defined path.

Ways to maximise warehouse space utilisation  

To increase the space, you need not expand the storage facility. You can do so with innovative ways such as these –

Innovative rack setup

Extending the racks vertically is a common way to expand the storage space. However, you need a structural engineer to examine the base plate size to know its feasibility. Other ways to set up racks are –

• Pallet racks – These basic racks with a forklift are one of the best ways to maximise the storage space for a variety of goods.
• Carton flow racks – These are best for the first-in-first-out (FIFO) flow of goods. The slanted panels push down the old items for easy accessibility.
• Cantilever racks – These are ideal for long items such as pipes, steel trusses, and lumber. They come with protruding arms to place the inventory.
• Mezzanine floor – This is a floor that comes between the ground and the roof and adds a platform without the need to add another level to the building.

Choose the best layout plan

• U-flow – The receiving and dispatching zones are on the same side of the facility but separate from each other.
• I-flow – The receiving and dispatching happen on two opposite ends of the storage facility.
• L-flow – The receiving and dispatching sites are perpendicular to each other, with the rest of the space available for storage.

Reduce the aisle width

You can save 15% – 20% of the area by reducing the width of the aisle from 12 to 8 ft. or from 10 to 5 ft. You must evaluate the forklifts and their ability to work in narrower spaces before choosing this option.

Evaluate and adjust the storage medium

Move from single-deep to double-deep racking systems and change the medium to higher-density equipment. You will need a reach truck to load pallets on double-deep racks. Other alternatives are push-back and drive-in racks.

Use a warehouse management system

A warehouse management system (WMS) inspects and evaluates the performance of the facility against the supply chain KPIs. It gathers huge amounts of data and converts it into meaningful information for warehouse storage optimisation.

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How can Infosys BPM help?

The Infosys BPM supply chain management handles warehouse optimisation as its integral component. Mitigate risks and be cost-competitive with technology-driven managed service for supply chain planning.

Read more about inventory optimization supply chain at Infosys BPM.