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In warehouses and other storage facilities, space is arguably the most valuable asset. By making the best use of their warehouse space, businesses can significantly increase the amount of product they can store in the facility. By being able to store more items at once, they can save money on transportation costs and other expenses. Plus, it allows the staff better access to products, thus allowing them to fulfill orders faster and ultimately get products to the customer sooner. Because of how precious space is in a warehouse setting, warehouse managers and business owners should take the time to calculate how much space they have and how well they’re utilizing it. In this article, we’ll discuss how to make those calculations and improve how you’re using your warehouse’s available storage space.
Calculating the Total Storage Capacity of Your Warehouse
To figure out how well you’re using your warehouse storage space, you first need to calculate the total storage capacity of the building. A common mistake is merely calculating the square footage of the entire facility and leaving it at that. This number, however, does not account for space within the building that cannot be used for product storage. For this reason, you have to take a few additional steps to reach an accurate number for your warehouse’s total storage capacity. Follow these four steps:
- Calculate the complete square footage of your warehouse. Let’s say it’s 100,000 square feet.
- Subtract the total square footage of space that is used for non-storage purposes. This should include any office space, bathrooms, loading areas and other space where you cannot store goods. Let’s say that calculation comes out to 20,000 square feet. So, your warehouse has 80,000 square feet of usable space.
- Determine your building’s clear height, which is the distance from the floor to an overhead object. For most buildings, this would be the distance from the floor to the facility’s steel shell, but it could also be the distance from the floor to the lowest-hanging overhead objects, such as lighting or equipment. Your building’s clear height will impact your usable space because it dictates how high up you can store items.
- Multiply your total square footage of usable space (80,000) by your facility’s clear height to determine your warehouse’s storage capacity in cubic feet. Going with our example, if your building’s clear height is 25 feet, it has a total storage capacity of 2,000,000 cubic feet.
The reason you must convert your warehouse’s total storage capacity into cubic feet is because it makes it easier to analyze how well you’re using that space, as you can also calculate your warehouse storage utilization in terms of cubic feet.
Are You Utilizing All of Your Warehouse Space?
Once you know the total storage capacity of your warehouse space, you can begin to analyze how well you are utilizing that space. You can do this in two steps — learning how to calculate warehouse space utilization and then analyzing your individual usage.
1. Learn How to Calculate Warehouse Space Utilization
Calculating your warehouse space utilization will help you make sure you’re as efficient as possible with the available space at your facility. This number represents the percentage of your usable storage space that you’re using. Believe it or not, you don’t want this number to be a perfect 100% — in fact, you want it to be much lower than that. We’ll explain why after going over the calculation. Going back to our previous example, we know the total storage capacity of the warehouse is 2,000,000 cubic feet. To determine how much of that space you’re actually using, you’ll need to calculate the inventory cube size of your facility. Follow these steps to calculate the inventory cube size of your warehouse:
- Measure the footprints of all your pallet racks.
- Calculate their total vertical storage capacity.
- Multiply the true capacity of each of the pallet racks in your warehouse by the total number of racks you have.
The number you reach after making those calculations represents the size of your warehouse’s storage cube. Let’s say the number you landed on after doing this math is 500,000. With your total storage space being 2,000,000, that means your storage utilization percentage would be 25% — which is pretty good.
2. Start Evaluating Your Warehouse Space Utilization
Some of you may be wondering: “Why is 25% a good utilization percentage? Shouldn’t it be closer to full capacity?” The short answer is no. Instead, having a storage utilization that is more than 27% or less than 22% would signal a potential issue in the layout and design of your warehouse. A utilization percentage of more than 27% would likely mean your staff is having a difficult time moving around the warehouse to pick and restock items, which would result in high labor expenses. On the other hand, a storage cube size that is less than 22% of your facility’s total storage capacity would indicate that you may be wasting potential storage space due to the layout of your warehouse. If we’re still working with the warehouse that has 2,000,000 cubic feet of usable storage space, that would mean a storage cube of between 440,000 and 540,000 would be ideal. So, let’s take the middle of that range — 490,000 — and say that’s the storage cube size to aim for to achieve the optimal warehouse storage efficiency. This number, of course, will vary for every warehouse. But for the sake of this example, let’s say this particular warehouse has a 490,000 storage cube size. Warehouse managers and designers can then lay out the facility with optimization and efficiency in mind, and you can calculate how much of that storage cube size you are actually utilizing. If you are storing 350,000 of product, you would be using 71.42% of the optimal storage space that is available.
Tips for Maximizing Your Warehouse Storage Capacity
Now that you know how to calculate storage capacity, you can run the numbers on your own facility. If your storage cube falls outside that 22% to 27% range or you’re unhappy with the number you reached for the amount of potential storage space you’re actually utilizing, it’s time to focus on your warehouse capacity optimization. By making a few small changes to the layout and organization of your space, you can increase your warehouse utilization numbers and save both money and time. Here are six tips you can apply to your facility to maximize the storage capacity of your warehouse and utilize as much space as possible.
1. Use the Right Storage Solutions
The types of storage solutions you use at your warehouse will have a direct impact on your storage utilization. To reach optimal storage capacity, choose solutions that make sense for the shape and size of your space as well as the types of products you’re storing. Some popular storage utilization-enhancing solutions include:
- Pallet racks: Pallet racks are common storage solutions for warehouses because they allow staff and machinery to access goods directly. Pallet racks are also adaptable and customizable to a range of product sizes and weights, making them compatible for most facilities. These steel racks can come with either welded or bolted frames.
- Drive-in pallet racks: Drive-in pallet racks use the LIFO method — the last product to enter the rack is the next to be picked. This makes drive-in racks ideal for temporary storage solutions and high-volume inventories.
- Drive-thru pallet racks: With double-sided points of entry in both the back and front for product entry and removal, respectively, drive-thru pallet racks utilize a FIFO system — first in, first out. This racking unit is typically found in the middle of the storage and order fulfillment process.
- Mezzanines: A mezzanine is an excellent way to double or potentially triple the surface area of your warehouse that can be utilized for storage. It essentially serves as another floor within your warehouse, allowing you to increase your storage area without any construction or expansion. Mezzanines are ideal for storing odd-shaped products or serving as an assembly or sorting area. While mezzanines cannot replace pallet racks, they are an excellent complement.
- Flow racks: Flow racks also follow the FIFO system, making them ideal for storing perishable goods that are frequently being rotated. Gravity will move the pallets on flow racks as they are picked or moved, sliding the products on tracks until they reach the end of the rack.
- Mobile racks: Mobile racks operate by basically squeezing multiple rows of products together on guided bases that can slide laterally at an operator’s request. This means that the operator can move the racks left or right, creating an aisle anywhere within those rows to access particular products.
- Stacker cranes for pallets and boxes: Stacker cranes for boxes and pallets will increase your usable space vertically by allowing you to access stacks up to 131 feet high for pallets or 65 feet high for boxes. These machines can also operate in relatively narrow aisles — 5 feet wide for pallet cranes and 3 feet wide for box cranes. These machines also move quickly to increase productivity and are compatible with pallets and boxes of all sizes.
2. Rearrange Your Aisles, Pallets and Racks
Once you’ve chosen the best pallets, boxes and racks, it’s time to arrange them in the most optimal way to boost your storage utilization. Keep like-sized items and storage units together for the best organization and fit. Make your aisles a bit more narrow to fit a few more rows in — as long as they’re still wide enough for your staff and equipment to fit through comfortably and efficiently. Not only will having a well-organized warehouse increase your storage capacity, cube size and overall utilization, but it will also increase your employees’ efficiency as they will be able to move around and find items easier. The same goes for any automated machinery you use in your facility.
3. Increase Your Clear Height
The clear height of your building has a significant impact on the amount of storage space you have available to you. While it may seem difficult to increase the amount of space you have vertically, it’s possible to boost your clear height by looking at any equipment, infrastructure or other items you have hanging from the ceiling. For example, you might have hanging lights, security systems or cameras, or other items that you can move, replace or reposition to give you a few more feet of clear space. Rather than hanging lights and security systems from the ceiling, consider affixing them to the actual roof or walls to maximize your clear height and, therefore, your potential storage space.
4. Account for Fluctuation Due to Seasonal Inventory
If your warehouse stores a lot of seasonal products, such as holiday decorations, beach gear or winter gear, be sure to account for this fluctuation during the off-seasons. While the total storage utilization of a facility that houses mostly Christmas decorations may be lower during the summer, that doesn’t mean they aren’t doing well or even that they should revisit their warehouse optimization plan. If the managers of this warehouse were to instruct higher-ups that their storage utilization was low and they needed more products to store, they would likely be way over-stocked come winter. Warehouses with significant amounts of seasonal inventory should ideally calculate an optimal storage utilization for their peak season, as well as an optimal storage utilization number to shoot for during the off-season. It simply wouldn’t make sense for them to keep the same amount of product in the facility all year-round, but it also wouldn’t make sense to rearrange the warehouse twice a year to suit the fluctuation in inventory.
5. Allow Room for Growth
Another reason the total storage cube of your warehouse shouldn’t be more than 27% is to allow room for growth and new products. If your warehouse is at full storage capacity and utilization, that’s a good sign that it’s time to expand. Always allow some room for quick growth at your warehouse — you never know when a product of yours will go viral overnight. If that happens, you’ll need to start overstocking that particular item as soon as possible to keep up with demand. It’s a good problem to have, but it’s even better when you’re prepared to handle it.
6. Avoid Estimating Warehouse Storage Capacities
Your warehouse storage capacity is not a number you want to “guess” on. Avoid estimating your storage capacity or “eye-balling” how much of the facility you’re using for storage. Now that you know the calculations and how to reach an exact number for your warehouse storage capacity and utilization, take the time to do the math and figure out the logistics of your space. Knowing your numbers will allow you to develop the most efficient warehouse optimization plan in terms of both its layout and organization.
Contact T.P. Supply Co. for the Tools and Supplies You Need
Once you’ve calculated your warehouse space and storage capacity, it’s time to fill your facility with the premium supplies and tools it needs to operate smoothly and efficiently. From storage rack and shelving solutions to material handling tools and machinery, our product offerings combine excellent safety and security features with durability and superior quality to create an effortless experience for the user. Ready to stock your warehouse space with tools that will last you and your staff years to come? Contact our team today for more information about our product offerings and how they can be an asset at your facility.