Tips, Advice And News To Improve Your Logistics / November 2017
INCREASING STORAGE DENSITY: THREE WAYS TO REDUCE EMPTY SPACE
As you know, in business, time is money – but in logistics, space is money as well. That’s why you should store your stock as densely as possible. How can you do this yet still keep your operations running smoothly?
Increasing your storage density isn’t about your stock – it’s about reducing the empty space in between. So the key is identifying why you have empty space – and how you can remove it without disrupting your processes.
You may think empty space is just empty space - but it’s not all the same. It occurs for different reasons, and so you take different actions to reduce it. Let’s look at the three most important types of empty space.
Empty Space #1: Aisles
The most obvious empty space is the aisles between the racks. What are your options to reduce this? You can invest in specialised narrow aisle lift trucks. If you’re thinking of this, remember you can’t mix pedestrians and trucks in the same aisle at the same time. You’ll need to separate any pedestrian order picking from your pallet movements. For example, schedule the two tasks for different times in the working day.
If you want to reduce the proportion of aisle to storage area further, an automated storage and retrieval system is the next step. Your capital investment will be higher, but you’ll reduce your labour as well as your space. So – particularly if you have rapid throughput – there’s a fair chance you’ll get a good payback. So why not investigate it? If you don’t ask the question, you’ll never know the answer.
Empty Space #2: Empty Locations
You can’t run a warehouse if every location is full. You need to keep a proportion of your pallet locations empty – but why?
Although the number of pallets that you receive and the number you despatch balance each other, that only happens over the medium term. On any given day, they’re out of balance, because of random variation in supply and demand. Empty pallet locations absorb these variations.
Random variation causes the problem – but you can use the statistics of random variation to solve it. The proportion of random variation reduces as the population concerned (in this case, pallets) increases. That’s why it’s a bad idea to zone your pallets or a have a rule that keeps reserve stock next to its picking slot. Make sure you can put any pallet away anywhere in your warehouse. Then – instead of several small populations in each zone - you have one large population, and therefore less variation and fewer empty locations.
Typically, you’ll be able to increase your pallet space utilisation from 85% (the rule of thumb for manual control) to between 90% and 95% without any problem.
Empty Space #3: Pallet Locations
To get the benefits of random location, all your pallet locations must accommodate your largest pallet. Therefore every smaller pallet wastes space.
That’s why you should work with your suppliers to create a standard pallet size. Of course, the extent to which you can achieve this objective will depend on your purchasing power. But keep trying – the more of your pallets that are a standard size, the less wasted space you’ll have.
So what’s your message from this month’s newsletter? You can increase the amount you store in your warehouse if you follow these rules:
- reducing the width of your aisles often gives you a payback, but don’t stop there;
- investigate the payback on automated storage and retrieval systems;
- store your reserve stock randomly – zoning means more empty locations;
- standardise your pallet size – different sizes mean wasted space.