How to Improve Warehouse Storage (if you’re not Amazon…)

Online shopping is booming at an exponential rate. However, many companies often overlook the absolute bedrock of the supply chain: the warehouse. With consumers expecting lightning fast delivery speeds, the success of a retailer depends on their warehousing and their supplier’s warehousing.

The humble warehouse might be behind the scenes, but it is absolutely integral to the overall success of the supply chain and a company’s ability to match supply and demand.

Thanks to Amazon and Alibaba, the supply chain industry is currently awash with proclamations on the space-saving performance, efficiency and speed of automation and robotics in warehouses.

However, the reality is that the vast majority of businesses do not have the revenues, margins and velocity of sales to get a sensible return on investment for major automation or robotics deployment. For these companies, the focus should be applied to the first principles of warehousing, one of which is storage.

The importance of warehouse storage is exacerbated when we begin to examine the costs associated with warehousing. Space costs money. For every square foot of space that your business utilises the costs increase for rent, rates, utilities, insurance, service charges and so on.

Also, in the UK, quality warehousing space is increasingly limited: we’re not building enough of them and therefore rental costs are increasing. There are properties in the South-East renting for £16 per square foot at the moment, more than three times the national average.

With cost in mind, one of the cornerstones of efficient warehousing is maximising the use of storage through the careful management of labour, equipment and technology where appropriate.

There are a number of different ways to improve warehouse storage.

Improving Warehouse Storage

Of course, the easiest on-paper solution for improving your warehouse storage is to simply physically restrict the amount of space you have. If you’re forced, by the nature of size restrictions, to limit your storage, you save money and are forced down the road of storage efficiency.

If you have space, the reality is that you will use it, even if you don’t inherently need it. It will, therefore, be costing you money for no real need.

Conversely, if you are restricted in how much storage space you have, then you have little choice but to maximise efficient use of that space, and to think of strategies to make that possible.

It seems an odd idea, but a huge boost to your warehouse storage can come about simply by reducing how much space you have and improving the warehouse layout. The knock-on effects will be that factors such as pick-rates, replenishment and packing will all be positively improved.

Utilising Space Efficiently

Once you have the optimal space for your needs, you then need to be sure that you are using the space that you have efficiently. Racking and pallet storage is most likely the solution, but there are different ways of implementing this according to the nature of your needs.

Choosing from one of the different types of racking and pallet storage requires a careful assessment of your needs. For example, would you be better served by a push-back pallet racking system, a carton flow racking system, or perhaps a cantilever racking system?

Understanding these differences, and how they can benefit your warehouse and business can be complex and requires a careful cost-benefit analysis.

The ultimate aim of a racking and pallet storage system is to increase effectiveness as well as storage efficiency, with the ultimate aim of improving your profitability (where possible, the fundamental principle of these systems is to go up, not out).

They should, when used and implemented appropriately, improve both your business productivity, but also employee and process efficiency. Such systems can bolster the needs of the e-commerce market by making organising and retrieving goods both quick and easy: making just-in-time delivery management simpler and more reliable.

Efficiency is Your Goal

At the heart of any steps you take to improve your warehouse storage, efficiency should be your primary goal. When your warehouse storage is run in an efficient manner then profitability is improved because mistakes are prevented and minimised, as are delays or any disruptions in the supply chain process within your ‘link’. Streamlining the warehouse increases productivity, and harmonious flow of in and out is achieved.

In order for this to be possible, it’s essential that any changes to warehouse storage – designed to improve it – are carried out hand in hand with security and safety features. Warehouses are, traditionally, a hotbed for industrial accidents and just one oversight in this area can cause fundamental problems for your warehouse and your business.

If safety is insisted upon from the outset, then it incurs fewer costs in the long run. The same applies to security. Insurance is there as a safety net, but it doesn’t remove the headache (in time and money) that theft or damage cause. Therefore, mitigate against known risks from the outset.

Get the Best Technology on Board

Technology might be constantly changing, and your business may not be able to justify the costs of employing warehouse robotics on the same scale as retail giants such as Amazon, but in the modern supply chain, you cannot shun technology in the warehouse.

A Warehouse Management System (WMS), either as a standalone technology or as a part of your wider ERP, should pay for itself and represent a good return on investment.

These technologies can perform and streamline multiple functionalities from warehouse routes to picking order and will improve your warehouse storage. The use of technology, such as barcoding or RFID, can also improve both accuracy and efficiency.

Take a Look at Your Inventory

Inventory management can fundamentally affect the overall efficiency of warehouse storage. The two go hand in hand. You should only be storing and shelving that which you fundamentally need. Stock levels should be lean and eliminate any wastage.

You should be encouraging and pushing suppliers to deliver smaller amounts on a more frequent basis to prevent you from bearing the storage and working capital costs. To make this possible, you need excellent supplier relationships and insights into your customer behaviour.

The very leanest inventory management should be part of your perpetual goal. It may seem like a holy grail, but the ongoing efficiencies it brings make it worthwhile.

Warehouse Storage and the Future

The future looks set to only increase the squeeze that businesses feel and efficiencies have to come from within. Improved warehouse storage is one vital way in which we can do this.

For most companies, it’s about pairing skilled management and insight with the right technology, equipment and space. Of course, if you’re Amazon it’s probably time to go a step further and investigate underwater storage!

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Tamsin Giles, Client Service Coordinator, contact photo

Hello! I’m Tamsin, Client Services Coordinator at Paul Trudgian. Please get in touch by phone, email or the contact form and I’ll make sure your enquiry is dealt with promptly and passed to the right member of the consulting team. We look forward to hearing from you!