How To Increase Storage Space In Your Warehouse Without Expanding
Warehouse workers know that if there is space available in a warehouse that it will eventually get filled, even during slow production periods.
The most common reasons warehouses run out of storage space is due to:
- Growing too quickly
- Peak seasons of production
- Consolidating the facility
- Slow production periods
- Buying bulk products at discount prices
Although, there are 3 main reasons why you might have a deficiency in space in your warehouse. The first reason is having too much of the wrong inventory. Also, there are cases where having too much of the right inventory can take up too much space as well. The 3rd and most common reason warehouse’s run out of storage space is from disorganization and not using the space wisely.
To be able to address these situations properly, you must first know what your warehouse issues are and what creates that issue. Let’s first take a look at too much of the right merchandise.
Buying Too Much Merchandise For Expected Orders
Too much merchandise can seem like it would be a good thing, right? You would think this because you will be able to fulfill orders more quickly and have the product readily available at any given notice. So, you would think that, since the sales team and buyers are celebrating everything would be good right? Well, while 2/3 of your team are happy while your warehouse is suffering and operating below safety measures and productivity standards. These types of warehouses will often have merchandise stacked in dock areas, stored in aisles, placed on rack end caps, multiple SKUs of merchandise mixed in locations with single bins. Blocking your visibility can create a safety hazard, and not being able to find merchandise easily creates additional labor costs. The good thing about a warehouse like this, is that the merchandise usually moves pretty quickly and space problems aren’t usually an issue for more than a couple weeks or so.
Ordering The Wrong Inventory
Having too much merchandise means someone on the sales or production team did not plan appropriately but it also can be a sign that your warehouse is not gauging merchandise level correctly. Furthermore, this is a problem that can’t be handled with extra labor like having too much of the right merchandise. Having too much of the wrong merchandise can leave product untouched for weeks, months or years on the warehouse floor.
A great example of ordering the wrong product happened with a supplier of consumer goods. This company decided to bring in a consultant to find out how they could increase their storage space without expanding. The consultant found that in the past 12 months alone, 600 of 3,000 pallets had not been in production use. 450 out of 5,000 pallets had no sales in the last 3 years. The “Having a lot of the wrong merchandise” problem this company had was solved! They did have to take a onetime loss of that merchandise but they gained a ton of space that can be used to move the “right inventory”!