This article originally appeared in the July/August print edition of Industrial Distribution. To view the full digital edition, click here.
It’s a good and a bad problem to have: your warehouse space is shrinking. It typically indicates booming sales and backlogs — and it certainly beats the alternative of having an empty warehouse and idle employees — though it’s not without its challenges.
A booming warehouse is easy to clutter and mismanage, and oftentimes, you aren’t quite ready to expand outward and find new space. Here are a few tips for making the most of the warehouse space you have:
1. Find out what you need
The first step to better organizing your available storage space is to take inventory. What do you have? What do you need? What do you anticipate will be coming soon? It takes careful planning and a close attention to customer trends to determine exactly what you will need in the near future. Once you do, you can adjust orders, production and distribution in a way that improves flow through your warehouse space. You can begin to restructure your storage space accordingly, improving accessibility to the right products and increasing overall efficiency.
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2. Ditch what you don’t need
Planning for incoming merchandise is one thing, but decreasing what you don’t need is another challenge. In some cases, the problem will fix itself with the right planning; in other words, people need what you’ve got, and you can begin to move excess merchandise in the right direction without taking a hit. All you have to do is adjust your incoming orders and wait.
In other cases, it’s not so simple. When it becomes apparent that a specific product has no market value and likely will not move for years — or ever — then you have to make the tough call and ditch it. It can be painful to the bottom line, but a one-time hit is better than years of unusable storage space that you continue to pay for.
If you suspect that your warehouse is becoming a hoarding hole, consider hiring a consultant to look at every bit of inventory to determine how long it’s been there and whether it has any potential to move. The sooner you do so, the more you can minimize any potential losses.
3. Rearrange the warehouse
Many times, you can clear space without physically getting rid of products. When a warehouse first begins to fill, the mindset is not necessarily to prioritize space and to stock smartly. However, when space begins to vanish, you can no longer delay rearranging. A consultant can help you measure your available space, determine the smartest flow paths, identify movable and immovable obstacles, and make recommendations for being more efficient with your space. Typically, they can help you identify where it makes sense to stack pallets, expand vertically, utilize tunnel rack space over cross aisles, and more. When the alternative is finding more (and equally disorganized) storage space, it’s well worth the expense of pausing to rearrange.
4. Improve how you manage inventory
When it comes to inventory management, the “how” is just as important as the “where.” Warehouses are increasingly using a real-time warehouse management system, or WMS, to track every bit of inventory as it makes its way down the supply chain. This helps you make better use of your space for a few reasons: For starters, you know what’s moving and what isn’t, helping you make better ordering decisions. Second, your warehouse workers have an easier time locating products when they are needed — allowing them to be more efficient. Lastly, when you know the rate of movement for each product, you can better arrange your warehouse so that fast-moving products are more readily available, and the slow movers can be shuffled out of the way of traffic.
Sometimes you have to expand, and knowing when to do so is important. It does no good fumbling with a full warehouse when your needs have outgrown your space. When you’ve gone through all of the alternatives and still lack space, it’s time to bite the bullet — but remember to do it smartly.
Denny Hammack has over 20 years of storage industry experience. He is the President of Patterson Pope, the supplier of high-density shelving storage solutions, products, and movable cabinet systems.