There are several ways to improve your warehouse space utilization. These methods include the following: Analyze Your Department Space; Use Off-Site Location for Overstock, and Reduce Overhead. In this article, we will explore each of these methods in detail.
If you have any questions, feel free to ask us. In the meantime, please review the following articles: The Starting Point; Analyze Your Department Space; Use Off-Site Location for Overstock, and Improve Overhead Utilization
The Starting Point
The Beginning Point for improving Warehouse Space utilization should start with a discussion of standardization. Employees and management should be aligned on work procedures, expectations, and the overall goals of the company. This process will allow work and space-use efficiencies to be embedded.
Examples include mapping specific storage positions, defining traffic patterns, and assigning discrete job duties. The goal is to reduce waste and maximize throughput in each space type.
Taking the space utilization of a warehouse cube and comparing it to the area dedicated to dedicated storage will help you determine whether you are getting the most out of the space you are using.
For example, if you have two million cubic feet of space and 500,000 cubic feet of space dedicated to a product, then you are utilizing approximately 3% of that space. At this point, your inventory takes up 75% of the cube, while your dedicated storage slots use up about 25%. In other words, your space is almost full.
Once you have calculated the total square footage of usable space, you must then subtract out the non-storage space. This includes office space, loading areas, and restrooms. Once you know how much usable space is left, you can begin the process of analyzing space utilization. You’ll be surprised at how much space you’ve saved! And with improved warehouse space utilization, you’ll be able to see where inventory is and get it to customers faster.
Analyze Your Department Space
To optimize warehouse space usage, it is essential to understand your inventory turnover. Excess inventory can take up as much as fifteen percent of the space in a Lee Warehouse NZ. If you are storing inventory, you no longer sell, it is time to liquidate it.
Keeping inventory reports can help you decide how much space you need for new inventories, and when it is time to get rid of existing stock. This information is vital when discussing warehouse space utilization with management.
Use Off-Site Location for Overstock
In many cases, overstock is an inevitable part of running a warehouse. Warehouses typically have more inventory than they can physically handle, either because of seasonal demand or because they are trying to hedge against rising prices. Whether the overstock is seasonal or a result of a business’s over-inventorying, it’s crucial to consider the reasons for overstock before attempting to liquidate it.
Overstock’s solution has enabled the company to implement a consistent data structure and machine learning models to understand customer behavior. By establishing a consistent data structure and baseline, they can experiment quickly, glean new insights, and pivot their marketing efforts accordingly. The company has a distinct advantage over competitors, as this approach enables them to implement changes without devoting significant resources to engineering.
Use Off-Site Location for Overstock
Using an off-site location for overstock helps optimize warehouse space utilization and optimize the supply chain. Using overstock replenishment helps prevent delays and maintains inventory accessibility for pickers.
Overstock replenishment is also beneficial for optimizing warehouse labor utilization. It is important to understand the reasons why a warehouse has excess inventory. Without proper planning, a warehouse cannot fulfill orders.
For example, overstock of Christmas products cannot be moved to an off-site location and disposed of.
The advantage Overstock has over its competition is that it can quickly deploy machine learning models. This allows it to test the system and gauge its effectiveness. It also enables it to pivot its marketing efforts based on its insights.
With this flexibility, Overstock can improve warehouse space utilization and the customer experience in a matter of weeks, rather than months. A critical component of an effective data management strategy is a reliable data platform.
