Home / Blog / How to Optimize Warehouse Space
15 Apr 2023

How to Optimize Warehouse Space

Warehouse space optimization is crucial to ensure efficient use of available capacity, increase productivity, reduce operational costs, and improve customer satisfaction. In this article, we will look at how you can increase warehouse storage capacity for your business, and help you to do so by suggesting some innovative warehouse space-saving ideas. But let’s begin with a simple definition of warehouse space.

What is Warehouse Space?

Warehouse space refers to the internal capacity of a commercial property designated for the storage and distribution of goods. The definition can sometimes include space in an external yard, attached to a warehouse, but in other cases this will be designated separately as yard space.

Warehouses range in average size from 2,300 square meters to 5,000 square meters and the trend is towards building them even larger. At the same time, the use of small urban distribution centers to help speed up deliveries in ecommerce shipping is becoming increasingly popular.

So now we’re agreed upon what we mean when discussing warehouse space, let’s move on to explore how you can make the most of it through optimization.

Warehouse Space Optimization Techniques

1. Conduct a Space Analysis

Before optimizing your warehouse, you need to understand how the space is used. Conduct a space analysis to identify underutilized areas, dead space, and bottlenecks. That will help you identify areas requiring improvement and prioritize your optimization efforts.

Execute the following steps to calculate your total warehouse size:

  1. Start with the total area of your warehouse in square meters or square feet.
  1. Subtract any space not used for storage, including offices and restrooms.

  2. Multiply the remaining square meterage by the height of the facility. This will give you the overall size of your warehouse.

  3. Next, calculate the size of your storage area. Multiplying the width and length of your racking by the height of the highest load in that area will give you the cubic volume of your storage area. This is your potential storage space.

2. Optimize Your Storage Systems:

To optimize your storage, consider installing vertical storage systems, mezzanine levels, and high-density storage solutions like pallet racking, mobile shelving, and automated storage and retrieval systems. These systems can help you maximize floor space and create more storage capacity.

3. Implement a Slotting Strategy

A slotting strategy involves assigning items to specific storage locations based on their demand rate, size, and weight. Slotting optimization software uses algorithms to identify the best location for each product based on demand and other factors. This can help you maximize your warehouse space utilization and minimize the time and effort required to pick and store products.

4. Utilize Efficient Picking Processes

Efficient picking processes will reduce the time your warehouse operatives take to pick items from the warehouse. Processes to consider include batch picking, zone picking, and wave picking, all of which can help you optimize space for reduced congestion and improved picking efficiency.

5. Use Technology

Technology can help you optimize space in the warehouse. Consider improvements or upgrades to your warehouse management software solutions, including the addition of artificial intelligence, if feasible, to help you make maximum use of your storage space.

If you don’t already have a warehouse management system in place, the latest cloud-based logistics products can be relatively inexpensive to procure and implement, since you don’t need to install complex hardware solutions to run them, and payment is typically by subscription, reducing the need for extensive capital outlay.

6. Train Your Employees

Train your employees to optimize space in the warehouse. Teach them about proper inventory management, handling of materials, and best practices for optimizing space.

Some Practical Tips to Gain Extra Warehouse Space

They may seem trivial, but the following strategies could gain you a sizeable amount of extra storage capacity:

1. Keep the Forklift Interaction Space to a Minimum

To enable a forklift to pick a unit, 15 centimetres of space is required. If the space between the top of the product and the bottom of the rack beam is more than 15 cm you have wasted space. Increase your warehouse storage capacity by lowering the rack beams if possible.

2. Use the Right-sized Containers

Storage containers are often of uniform size, meaning that a lot of space is wasted when stored products don’t fill the entire container. Using multi-sized containers can significantly improve warehouse space optimization.

3. Apply the Pareto Principle

The Pareto Principle, also known as the 80/20 rule, states that roughly 80 % of the effects come from 20 % of the causes. Applied to a warehouse, this means that 80 % of the warehouse's activity is concentrated in 20 % of its space.

To increase warehouse storage capacity, identify the top 20 % of products that make up 80 % of your warehouse's activity. These are the items that are in high demand and should be given priority in terms of space allocation and organization.

4. Use Cross-docking

Cross-docking is a process where incoming products are immediately transferred from the receiving dock to the shipping dock without being stored in the warehouse. This can help you reduce the amount of space required for storage and increase efficiency by reducing the amount of time products spend in the warehouse.

Optimal Warehouse Utilization: A Combination of Strategies

Warehouse space optimization is a continuous process requiring a combination of strategies, technology, and employee training. By implementing the warehouse space-saving ideas listed above, you can improve space utilization, reduce operational costs, and improve productivity.