There are over 30 million small businesses in the U.S., so you can bet there is a lot of a variety represented in that number. No matter what your company sells or how you sell it, one thing is sure: You have inventory. Some companies are small enough that they can keep all their inventory in a storage room in their retail location, or in a small warehouse if it’s an e-commerce business. Other small businesses may need larger storage facilities or warehouses to hold inventory.

No matter how much inventory you have or where you keep it, managing your inventory well is key to the success of your business. Properly managing your stock helps you satisfy customers, maximize profits and avoid headaches. Small business inventory storage can seem overwhelming at times, but with the proper storage and organizational practices, you can manage your store’s goods like a pro.

What Is Inventory Management?

Inventory management comes down to being aware of what you currently have in stock, where to find it and what to order when. It involves three main components:

• Diligent organizing
• Detailed record-keeping
• Careful strategizing

Organization permeates all aspects of inventory management, but it plays a tangible and pivotal role in your inventory storage. Inventory takes up space, and you should use that space in the best way possible. Arrange the items you have in stock in a way that is intuitive, consistent and accessible. If your inventory is not well organized, the other parts of the inventory management process become more difficult.

Detailed record-keeping is necessary because, especially if your business is doing well, inventory never remains static for long. New items are constantly coming in and going out. Each time a customer makes a purchase from your business, that’s at least one less item in your inventory. Every time a truck comes in delivering more stock, that’s many more items in your inventory.

So how do you keep track of it all? Very small businesses may figure out how to manage inventory effectively by using a digital spreadsheet or even a physical notebook. Most companies quickly outgrow this method, however. Even if you have the time and manpower to sustain this process, it still limits you. For one, this manual method doesn’t offer any analytics to show you which items are selling the most frequently, and which are not moving and may no longer need to be among your product offerings. That means you have to make those calculations yourself.

If the manual method is no longer practical for your business, you’ll want to keep track of your inventory digitally. You can do this through a point-of-sale system equipped for inventory management or through an inventory management software program. In both cases, software can keep track of each item through scanning the barcode or SKU code. You label and scan items into the system when you first add them to your storage facility or warehouse, and you scan them again when someone purchases them.

Whether you keep records manually or digitally, it’s essential to use these records to make predictions, then make smart decisions based on those predictions. What is selling like hotcakes and needs reordering in larger quantities or more frequently? What isn’t selling much at all? Ill-managed inventory can result in storage shelves overflowing with unwanted product or an out-of-stock notice that disappoints customers and loses you business.

Inventory Storage Options and Equipment Needed

Now that we’ve established the basics of inventory management, let’s walk through the door of your storage facility. This is where your inventory is, and it’s where much of the behind-the-scenes work goes on to make the sales that happen online or in the storefront possible. In a moment, we’ll look at tips for how to organize inventory for small businesses, but first, let’s talk about some practical aspects of storing your inventory.

Businesses that don’t have a storage plan in place typically default to stacking boxes or bins of inventory on the floor. This method, known as block stacking, doesn’t make efficient use of space, however. In a recent post, we discussed a few more efficient storage organization methods you can use. These include:

• Using pallet racks — With pallet racks, which come in a variety of types, you can take advantage of vertical space and keep your inventory in pallets.
• Using fixed shelving — Shelving is a great way to keep lighter inventory accessible and off the floor. You can use space horizontally or vertically.
• Using a pallet flow design — Also called carton flow, this method is expensive, but it allows you to take advantage of depth to keep the oldest inventory in the front and the newest in the back.

How to manage inventory for small business depends on your needs. Here are a few questions to ask yourself as you try to determine the best way to store your inventory:

• How much space do I have to work with in my storage facility?
• Do I have vertical space I can take advantage of, in addition to horizontal?
• What shelving or racks would support the weight of my inventory items?
• Does it make sense for me to store inventory in pallets, in boxes or out loose?
• What is the shelf life for items in my inventory?
• Which products should be most easily accessible?

If your storage is part of a warehouse used for packaging, shipping or other enterprises, this will also influence the way you set up your inventory storage. For shipping purposes, it makes sense to arrange it so your most popular products are closest to the shipping area.

If you sell an imperishable product, shelf life may not matter much, but if you sell a product that has a finite shelf life, it’s smart to use a setup that is conducive to the FIFO method. FIFO stands for first-in, first-out, meaning older items that entered your inventory first are also the first to sell, rather than remaining on shelves while newer versions of the same product get sold.

A pallet flow setup is designed to facilitate this method, but if your inventory storage is small and doesn’t use pallets, you can use freestanding shelves and have a system for taking products from one end, and adding new ones to the other end.

However you choose to lay out your storage facility, there are some basic supplies you need to store inventory effectively:

• Racks or shelving — Unless you’re going to block-stack your inventory, you need either racks or shelving. You may choose to use a combination of both if you have some heavier items you want to stack in pallets, and lighter items you’d prefer to shelve. If you use shelves, you may want to also add bins to your supply list so you can keep items orderly.
• Hand trucks and service carts — These pieces of equipment help you move bulky items in your warehouse or storage facility. Both hand trucks and service carts are on wheels, allowing you to roll items from point A to point B across the floor. Dollies can also perform a similar function, though they don’t include a handle for steering.
• Lift equipment — If you have heavy items you need to also be able to move vertically, you’ll need some lifting equipment. A pallet jack can help you move pallets. A lift and tilt table can make jobs like sorting or labeling easier, since it allows the operator to raise and tilt a box of items. Depending on the size of your operation, you may even want a forklift to help you move items and place them up on shelves.
• Rolling ladders — Unless you and your employees can reach the top shelf in your storage facility on your own, you need a way of getting up there. Rolling ladders allow you to access higher shelves anywhere in your facility. Choose a ladder that gives you the height you need, whether just a foot or 15 feet, and fits into your space.
• Labels — Labels are important throughout your inventory storage area. Especially if you store items in bins, you need labels on each bin to show what item it contains. You want workers to be able to tell what item is in each container at a glance and to know precisely where new items go as they come in.
• Safety equipment — If you have stacked heavy objects anywhere near where people will be working, you want to be aware of any safety hazards and do what you can to keep employees safe. Fortunately, safety equipment like aisle shields, rack guards and guardrails can help you do just that. Never compromise when it comes to safety.

Now that we’ve gone over the basics of inventory management and storing your inventory, let’s look at five tips you can use to help you organize your inventory more effectively.

1. Do a Physical Inventory at Least Once a Year

Using inventory management software is smart, but it still leaves room for error. After all, people still have to scan items for them to get counted. The software itself could also experience a glitch. To make sure you know exactly what you have on hand, you should conduct a physical inventory at least once a year — though biannually or quarterly is even better. This process involves physically counting every item in your inventory. To prevent complications, you should cease other operations in storage during the time of the physical inventory.

2. Keep Storage Clean and Orderly

How can you keep track of inventory and find a certain product when you need it if your storage is in disarray? It’s extremely important to keep your storage area orderly, regardless of its size. This one may seem like a no-brainer, but it’s easy to let things become disorderly over time. Especially when you add new products to your inventory, if they don’t have a designated place, your workers may end up putting them haphazardly wherever they fit.

Old items that won’t sell can end up taking up permanent residence in a corner somewhere. To prevent this problem, have a clearance sale to get rid of these items — otherwise, you’ll just be storing them indefinitely. People love sales, and you need an orderly storage facility where you can be confident you are using every bit of space.

In addition to being orderly, you also want to make sure to keep your storage facility clean. Accumulated dust and dirt present a health hazard for employees, and they may settle in places where you don’t want it, like on the products you plan to sell. You might want to hire someone or designate an employee to clean your storage facility periodically.

3. Update Storage Layout Annually

Successful small businesses grow and change over time. Are you selling the same products this year as you were this time last year? Probably not. As you find which items don’t sell and which do — a vital aspect of inventory management — and as you create or discover new items you know your customers will love, the products in your storage facility will change.

Because of this fluctuation, reevaluate at least once a year to make sure you are still using the optimal organization and layout for your storage facility. It’s especially vital to do so if your company packages and ships items from your facility. If you have newer items that sell like crazy, but they’re not in the most accessible place, move them to be more accessible. Make sure employees familiarize themselves with any changes to the layout and organization of the facility so they know where to find things.

In some cases, you may find a new layout calls for new equipment. Perhaps you didn’t use pallets before, but now you do, and you need a pallet rack. Instead of relying on methods you’ve outgrown, intentionally take time to determine the best way to store and organize your current inventory every year. After you’ve done this, make an updated map to show where items are.

4. Label Receptacles With SKU and Photo

You want employees to know what’s in each bin immediately. You could use a label maker to make small labels with a product’s SKU on it. However, the best way to label boxes and bins is with the SKU number of the item along with a photo. Even if someone doesn’t remember a certain SKU, they are sure to recognize a picture.

To keep these photos vibrant and in good shape, laminate them. If you’re placing labels directly on bins, affix them to the bin using adhesive-backed Velcro. The fastener will hold the photo on securely, but it also allows you take it off and replace it with a new photo if you need to repurpose the bin to hold a different item. You can also affix labels to the shelf to show all bins in a given row or stack contain a certain item.

5. Hire an Inventory Manager If You Need One

Depending on the size and scope of your business, handling inventory management may be something owners or general managers don’t have adequate time for. Since this is such a crucial aspect of your business, you should give it all the time it needs. If you can’t do this, it’s a good idea to hire an inventory manager — someone who can dedicate their focus to managing your inventory with excellence.

Before you hire externally, you may want to think about your existing staff and determine if anyone has shown the diligence and wisdom to manage your inventory well. If you hire a current employee, make sure you still provide training, though you won’t need to spend as much time as you would showing the ropes to a new employee who is completely unfamiliar with your storage facility and with the products you sell.

Contact T.P. Supply Co for Inventory Storage Solutions

If you need supplies to outfit your storage facility, T.P. Supply Co has you covered. For four decades, we’ve provided the best storage solutions for our customers, and we’re confident we can do the same for you. In fact, over 90 percent of people who buy from us become repeat customers! When you order from T.P. Supply Co, you can also take advantage of our installation services to ensure everything gets professionally installed in your warehouse or storage facility. Call us at 877-302-2337 or contact us online today!

Maximizing warehouse storage space can be a significant challenge for facility managers and operators. Making the most of available floor space and room volume seems a lofty mark for warehouse owners. Effective product storage and retrieval efficiency are the goals all warehouse people try to achieve, yet it often seems unobtainable. It doesn’t have to be so.

The first key to unlocking warehouse space utilization is proper planning. The second key to freeing warehouse space optimization is selecting the right equipment. It’s combining these two principles that make your warehouse space management successful.

When you seem to run out of room in your warehouse, you have three choices. First, do you relocate to a larger facility? Second, do you reduce inventory? And third, do you find creative ways to increase existing warehouse capacity?

Maximizing Your Warehouse Storage Space

Relocating to a larger facility is rarely an option for most warehouse companies. It requires a large capital investment and a significant amount of time in selecting, relocating and reorganizing an already busy business. Reducing inventory is also a poor choice as it limits the potential to fulfill customer orders. For most warehouse organizations, finding creative methods to improve efficiency in their existing facility is the ideal solution.

In evaluating your current warehouse operation, you’ll wonder what maximum warehouse capacity really is. Supply chain consultants find that when a warehouse reaches 80 to 85 percent of storage utilization is when efficiency in movement and storage declines. In other words, you might consider 80 to 85 percent capacity as a good guideline for your warehouse’s top end.

These experts go on to describe their findings that warehouse space typically accounts for 15 to 20 percent of per-order costs. By these figures, we can calculate that 20 percent of space inefficiency could reflect as much as five percent your cost-per-order. If you’re in a big warehouse with large throughput volume, that figure of inefficiency could have a significant impact on your profits.

Clearly, there’s a lot to be gained by carefully planning your warehouse layout and equipment. That includes your product storage tools like bulk racking systems, cantilever racks and pallet racks as well as industrial shelving and storage systems.

Main Warehouse Functions and Storage Needs

In general, four main functions happen in every warehouse facility. It doesn’t matter if you operate a large, medium or small facility. These primary functions remain consistent:

1. Storing products: This can be anything from brake pads to beverages. They can be small items with multiple SKUs, or they might be large volume pallets loaded with similar materials. Each application requires storage solutions unique to their characteristics.
2. Inbound operations: Every product in your supply chain has to arrive and find storage, including receiving and returns. You’ll find your best efficiency in reducing travel time and minimizing inbound operation trips. Generally, high turnover items need the shortest distance and time for inbound product placement.
3. Outbound operations: Picking and staging are two main outbound operations. How you select your options and implement your storage systems will have a profound effect on outbound product handling. You need storage racks and shelving that are durable, efficient and safe while being easy to access.
4. Value-added processes: No doubt you have value-added processes as part of your warehouse production. That might include labeling products, additional packaging measures or some special kitting process. No matter what customer value-added service you supply, you’ll need efficient space and equipment for it.

Let’s look at the types of storage options for warehouses that you can implement for warehouse layout best practices.

Types of Storage Options for Warehouses

Effective warehouse storage options should address these primary functions. Your objectives are to use space efficiently, allow access for effective material handling equipment, provide excellent storage-to-cost ratios, have maximum flexibility to meet changing needs and do this within the best and safest housekeeping model. It sounds like an impossible challenge, but it’s not if you use the right storage options.

To accommodate these warehouse functions and maximize your efficiency, you need to know what storage solutions and system designs you have available. There are a few main storage system options universally used in the warehouse industry. Not all will be ideal for your operation necessarily, but let’s examine the four most common systems:

1. Bulk Storage

Floor stacking or bulk storage is your most basic option. It’s the simplest and usually requires the least investment, but it can also be the most inefficient use of space. Bulk storage requires no physical storage equipment like racks or industrial shelving. Products sit directly on the warehouse floor and are arranged in horizontal depths. Depending on product durability, pallets might be stacked two or three high. Bulk storage has no efficiency for vertical cubing or elevated storage. You can consider bulk storage as a starting point before graduating to more effective systems.

2. Pallet Racks

These are upright storage frames connected in various methods. The idea is housing individual pallets in vertical applications without direct stacking. With pallet racks, you can isolate loads with inbound and outbound operations without moving or disturbing another loaded pallet. Typically, pallet racks are either bulk racking systems or cantilevered racks. Each pallet rack type serves its purpose such as drive-in/drive-thru racks, selective pallet racks, pallet flow racks, pushback pallet racks and cantilevered pallet racking.

3. Fixed Shelving

These systems aren’t designed to handle pallets. Rather, fixed shelving is a warehouse solution better applied for lighter products and multi-SKU applications. Fixed shelving units are also racks made of upright frames, however, their shelves serve a dual purpose as horizontal structures. You have two options with fixed shelving storage systems. One is wide-span shelving, which allows plenty of shelf access for products stored in bins and boxes. The other option is called industrial shelving, which offers many levels of adjustable storage in a small footprint.

4. Pallet Flow

Also known as carton-flow in the warehouse industry, this is a product storage system with a specific intention. This is a conveyer or deep-storage method where boxed products are stored in a first-in/first-out (FIFO) method. They’re delivered as-needed and have a fast recovery time suitable for high-throughput warehouses. Pallet, or carton-flow, storage systems are by far the most expensive warehouse storage systems. As such, only specialty warehouses employ pallet flow operations.

Most warehouse facilities commonly integrate a combination of pallet racks and fixed shelving. Your facility is likely no exception. You’ll undoubtedly want to make more use of vertical space than bulk or floor storage offers. But, if you’re unlikely to need or want to invest in some form of pallet flow system, you’re left with some attractive and affordable options.

Racking System Options

Don’t be confused between the terms “bulk storage systems” and “bulk racking systems.” Bulk storage is the basic floor-only option. It’s a significant space waster, and you’re likely going to want a better option for maximizing your warehouse efficiency. Bulk racking systems are a different matter. They still store bulky items, but they do it with vertical applications with pallets stacked in special-designed holding racks.

Bulk racking systems are also excellent solutions for storing products that aren’t palletized. That could be building materials such as lumber, pipes or rolled goods like carpets. For those long and bulky items, you’re best to invest in a specialty bulk racking system called cantilever racks.

Cantilever racks have horizontal metal arms extending from vertical uprights. They allow forklifts access to place or pick long products without having to disturb other goods stacked above or below. Many warehouses find cantilever racks the ideal space-saving solution. Cantilever rack systems come with different components, including:

• Single-sided cantilever towers: These are the vertical uprights or supports. Cantilever towers are the system’s backbone and create the general structure. Single-sided cantilever towers work best against a wall where only one-sided forklift access is necessary.
• Double-sided cantilever towers: For center-aisle access where your forklift needs pick and placement from both sides, double-sided cantilever towers are the way to go. This space-saving option turns your aisles into dual-purpose rows serving both sides of one passageway.
• Cantilever arms: These components are your horizontal members extending out from single or double-sided cantilever towers. They serve as shelves but only support a small part of the stored products. Sizing cantilever arms depends on how heavy your expected loads will be, how much room you have and what materials you’re serving. Large arms will support up to 3,000 pounds and extend 48 inches.

Having the right pallet racks also has a marked impact on your warehouse storage efficiency. They allow pallets to be stacked or slotted in similar arms that are sized and spaced specifically to house loaded pallets. You might be familiar with top brand names like Bulldog Rack, Husky & Wire and Unarco Rack. These strong and effective storage systems also offer you options like:

• Teardrop racks: These are easy to assemble systems that streamline installation. They employ teardrop-like punched holes for arm adjustment.
• Keystone racks: Their name comes from the upright hole shapes. Keystone racks are highly useful, effective and strong.
• Structural racks: For overall strength and durability, you may consider investing in structural racks. Besides holding countless pallets with heavy weights, they withstand the inevitable forklift impacts.
• Double-slotted racks: These are highly versatile warehouse racks. Because of the double-slotted upright design, they’re adaptable to other racking systems, making them true team players.

Shelving Storage Options

Another true payer for your warehouse efficiency team is industrial shelving. You’ll use industrial shelving in places where cantilever and bulk racks are impractical or unnecessary. That could be anywhere in your warehouse, and it might be one of the best small warehouse layout ideas.

With industrial shelving, you can organize any imaginable combination of loose or packaged products in an orderly and efficient manner. These commercial shelving units are extremely adaptable. They’ll quickly maximize your floor-to-ceiling space by incorporating accessory options like:

• Bins, totes and baskets
• Closed and open clipper shelving
• Multi-tiered, open and closed lockers
• Double and single wire Rivetrite shelving

Factors to Consider When Deciding on Your Warehouse Layout

In addition to knowing all your options for storage equipment to maximize your warehouse efficiency, there are other factors to consider when deciding your warehouse layout. If you’re starting with the design of a new building, you’re really in the driver’s seat. You have the luxury of working with a warehouse design service expert like T.P. Supply Company, Inc., an international storage products and material handling equipment supply company. T.P. Supply works with you throughout the warehouse design process to guarantee you maximum efficiency for your time and capital investment.

However, you’re likely not relocating to another facility, nor are you inclined to reduce profitable inventory to solve space problems. That leaves you with the most likely solution, and that’s to improve your existing facility layout. Here are some factors to consider:

• Existing structural components: You’ll already have some fixed structural elements in place including the exterior walls, doors and non-obstructing openings. You’ll also have interior support columns, stairs and non-bearing partitions. Look at each component as a help, not a hindrance. Work with them, not against.
• Aisle widths: This is an area where plenty of warehouse space is lost or gained, depending on design efficiency. By using the right bulk and cantilevered racks as well as the proper industrial shelving, you can easily add extra usable square footage at minimal cost.
• Vertical cubes: You’ll hear vertical cube as an industry standard when discussing warehouse organization and layout. This refers to maximizing your space in cubic volume from the floor up to the ceiling. By selectively placing stock from low to high, you’ll easily pick up extra space that’s efficient as well as valuable.
• Dock door placement: Your dock doors are fixed commodities that are expensive to relocate. It’s much more effective, not to mention less expensive, to design your aisles and storage systems around them. This is another area where a professional storage and material handling equipment company like T.P. Supply can help you.

Tips for Maximizing Your Storage Space

Over the years, we’ve picked up a few storage space tips, and we’d like to pass these on to you:

• Place fast-moving products closest to your docks. This reduces travel time on workers and equipment.
• Store high-volume items at low levels and low-volume products high. This also reduces worker time as well as physical strain.
• Put bulk storage products against walls. This allows you to implement racks and shelves along aisles with dual-sided pick and place.
• Use your entire vertical cube effectively. It includes spaces above docks, offices, aisles and pick areas.
• Consider building mezzanines. These “second-floor” spaces are ideal for low-volume or out-of-season stock storage.
• Keep it simple. If you have a choice between a complex solution and a straight-forward one, keep it simple and maximize the most of what you’ve got. Remember that warehouse space accounts for 15 to 20 percent of your order costs.

Work With T.P. Supply Company to Optimize Your Warehouse Space

T.P. Supply Company, Inc., has been in the warehouse supply business since 1979. Located in Mount Airy, N.C., T.P. Supply distributes storage solutions and material handling equipment throughout the United States, Canada and Mexico. We’d like to help you find storage solutions for all your warehouse space problems. You can call us at 877-302-2337 or reach us anytime through our online contact form.