By Dave Clifton
Content Strategist
SpaceIQ

It’s easy to think about a warehouse as one big space. Sure, you’ve got aisles and racks to compartmentalize inventory—but it’s all housed in one big building, right? It’s time to eschew old ideas about what a warehouse is and instead, reimagine the concept for the modern era. That starts with warehouse space planning. One peek inside of an Amazon distribution center or any other major retailer’s warehouse and it’s plain to see: warehouses are complex spaces with increasingly complex systems that govern them.

Whether it’s an e-commerce distribution center or a factory parts and materials warehouse, these spaces need special oversight. It’s not just about optimizing square footage, either. It’s about maintaining safe, efficient, organized warehouse operations, as part of a more succinct value stream.

Modern warehouses are complex

The complexities of modern warehouses have less to do with how they’re built and more to do with how they’re managed. Whether it’s pick-and-pack or ship-and-store, navigability and organization are the fundamental pillars of warehouse operations. Workers need to know exactly where they’re going and understand the best route to get there. This depends almost entirely on warehouse space planning.

Consider the process of retrieving a single product. Green Widgets live in Aisle 12, Bay 22, on the sixth shelf. Right away, workers need to understand the product’s location and its context within the warehouse, which means having some form of wayfinding present. Moreover, it’s vital to factor in the act of retrieval. For example, if Green Widgets weigh 150 pounds and are on the sixth shelf up, there needs to be enough room to operate a forklift in that space. Finally, there needs to be significance to why a product gets stocked in one location vs. another. Maybe Green Widgets are a consumer appliance, and Bay 22 is where consumer appliances live?

There’s a myriad of variables that go into orchestrating warehouse layout. It’s not enough to consider the products themselves. Space planners also need to consider stocking and retrieval, as well as maneuverability and navigability. In this way, static warehouse space needs to support dynamic operations.

How is warehouse utilization calculated?

With careful space planning comes the need to understand if your warehouse is efficient. That means taking a closer look at warehouse space utilization. Do you have space for everything you need to stock? More important, do you have the space necessary to house everything within the context of the organizational system you’ve developed? These are very basic questions, answered by observing key metrics of warehouse utilization.

  • First, is total warehouse size, represented in available cubic feet. Remember, warehouses utilize vertical and horizontal space, so total cubic feet matter more than square footage.
  • Next, calculate inventory cube size. Again, this is a simple equation that involves adding up the volume of warehouse product and dividing by available cubic foot space.
  • Finally, establish acceptable margins of utilization. Zero percent utilization is an empty warehouse; 100% utilization fills every cubic foot, which is impossible.

Industry metrics put average utilization rates for warehouses at between 22% and 27%, depending on the nature of operations. Below 22% utilization indicates you’re not using space efficiently; above 27% presents as overcrowding and potential stocking issues.

Tips to optimize warehouse space

Operational efficiency comes from warehouse space optimization. There are many different levers warehouse managers can pull to optimize floor plans, racking arrangements, and product layout.

  • Remember to utilize vertical space. Start with an efficient floor plan that utilizes square footage, then build up to capitalize on unused, unencumbered vertical cubic feet.
  • Create architecture that supports safer, more efficient maneuverability. Examples include mezzanines and other materials handling systems.
  • Implement a wayfinding system that’s intuitive and navigable, with proper signage and directional instructions. Make sure to post safety signage in addition.
  • Create a grid system to apportion warehouse equipment such as ladders, forklifts, skyjacks, and other essential equipment, to ensure it’s always accessible.
  • Centralize operations to bring conveyors and sorting equipment to the middle of inventorying systems. This is equally important for shipping, receiving, and sorting.
  • Establish material flow routes to prevent backups and space conflicts. This will help promote seamless movement in dynamic areas.

It’s critical to remember that warehouses feature static layouts within the context of a dynamic space. And, unlike offices or other commercial space, vertical height is usable space. To optimize warehouse space is to make it easily navigable on a two-dimensional plane, while maximizing the capabilities of three-dimensional space.

Lean into space planning software

Even within the context of smart environments, it’s easy to fall into the trap of thinking about warehouses as one big space. Warehouse managers can break this habit by relying on space planning software, to help them delineate space into zones. Segmenting the warehouse and treating different zones as unique starts by identifying and managing them as separate entities. Space planning software provides a top-down view that does exactly that.

To understand warehouse space in the context of zones and needs is to run a more efficient environment. Whether it’s pick and pack operations or for inventorying purposes, a well-orchestrated warehouse promotes a more efficient value stream and better bottom-line performance.

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