Maximising warehouse storage is crucial for retailers and logistics companies, offering significant cost savings and improved operational efficiency. Experts from Supply Chain Consulting Group reveal four effective strategies to boost storage capacity and make the most of every square metre.
A warehouse’s storage capacity is the amount of stock that can be held within the facility. This is typically defined as either the number of pallets or units/value of stock that can be accommodated. Once a warehouse exceeds its storage capacity, it will be unable to effectively receive additional goods, impacting on its ability to fulfil orders.
At Supply Chain Consulting Group, we specialise in providing logistics consultancy services and have deep expertise in warehouse optimisation. In our experience, growing warehouse storage has four key phases:
1) Understand current warehouse capacity
To optimise warehouse capacity, start by analysing your existing storage media and layout. Measure capacity based on occupied locations versus total locations and assess space utilisation within locations.
Poor slotting, incorrect rack heights, or unsuitable multi-depth storage can reduce efficiency. Furthermore, ensuring that safety and accessibility isn’t affected by narrow workspaces is an important consideration when maintaining a safe working environment.
Even if the warehouse seems full, better-suited storage equipment may increase capacity. Additionally, reviewing rack configuration and picking strategies can reveal immediate improvements.
Operating at full capacity isn’t always ideal, as it can slow replenishment and impact overall efficiency.
2) Requirements definition
After existing storage media is understood, the next step is to understand the storage requirement both now and into the future. This involves building a future ‘material flow’ for your operation. This includes projecting growth to ascertain the planning base and including seasonal peak trends, as well as a thorough volume analysis of inbound and outbound product flow.
The material flow and storage calculations must be built for each individual storage capacity/media. For example, if the business stores a combination of barrels, long lengths and pallets, these would need to be forecast separately to ensure the correct mix of storage media into the future.
As well as the material flow – other stock requirements need to be considered such as if there are specific segregation rules that inventory must follow, e.g., in chemical/food stores it is good practice not to store liquids above powders – this may impact your layout design. Inventory optimisation can help to provide a clearer understanding of this process.
3) Explore storage optimisation options
When optimising warehouse storage, consider space utilisation, physical constraints, and financial resources (CAPEX and OPEX). Assess alternative storage media and automation within budget. Key factors include:
- Space Utilisation: Maximise building height and footprint. Tall buildings may benefit from VNA racking or automated cranes for better density and flexibility.
- Access to Stock: Single-deep storage allows individual pallet access, while multi-depth storage suits bulk FMCG goods but requires careful SKU analysis.
- FIFO Considerations: Pallet live racking supports FIFO, while pushback and drive-in racking limit individual pallet access. Semi-automated shuttles offer batch-level flexibility.
- Offsite Storage: Useful for peak demand but adds costs.
- Overall Costs: Factor in space, equipment depreciation, and productivity impact.
- Operational Flow: Allow space for inbound/outbound staging and personnel movement to prevent bottlenecks.
- Throughput Speed: Match storage systems to required retrieval rates; VNA racking, for example, limits aisle truck capacity.
Selecting the right storage media ensures efficiency, accessibility, and cost-effectiveness.
4) Develop an optimised solution
Developing a fully optimised warehouse solution involves creating detailed plans while assessing operational impacts, to ensure a smooth, phased implementation with minimal disruption.
Prepare detailed plans
Start by developing warehouse drawings, CAPEX schedules, and material handling equipment (MHE) requirements to visualise the changes and budget effectively.
Assess Operational Impact
Analyse how the changes will affect resourcing, operating costs, and workflow efficiency to ensure long-term viability.
Evaluate Process Adjustments
Consider the impact on put-away, replenishment, picking strategies, and location numbering. Identify any system updates needed to support the new setup.
Establish a realistic timeline
Define project phases, key dependencies, and lead times for equipment procurement, design refinements, and installation.
Plan for Operational Continuity
If implementing changes in an active warehouse, plan for rack labelling, system configuration, and MHE training to minimize disruption. Migration should be phased to maintain business as usual.