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Knowing when you’ve outgrown your warehouse space

March 27, 2015|News & Headlines

Russell Industries
It’s great when your business is booming and you’re moving a lot of stuff through your warehouse space. But what about when it’s too busy and you’ve got production slow-downs and people tripping over each other in the mad rush of picking and restocking? Let’s take a good look at how to determine when you’ve outgrown your warehouse space:

Growth Hindering Profits

As your business grows, there’s bound to be growing pains. You need to hire new employees, expand some departments, purchase new equipment and reevaluate your plans. But even when you’ve got your overhead at a good rate, growth can change that figure very quickly.

Even when your business is booming, you need to keep a close eye on your overhead. The question you need to keep in mind is whether your increased business is actually bringing in more profits or whether the profits are being eaten up by increased overhead.

A recent study found that a disorganized warehouse had serious costs in terms of picking times, travel time between picks and using the wrong storage media. But even a well-organized warehouse can have these problems if there’s just not enough space to use effectively. If your warehouse can no longer be profitable, what can you do about it?

Consider Reorganization

One option is reorganizing your warehouse so that work can proceed more quickly and efficiently. There are several areas you can improve on:

If you can, sort your SKUs so that each individual SKU has its own location. Sorting through mixed SKUs takes over 15 seconds per item.
Use batch or cluster strategies or a conveyor belt to organize your warehouse. When an employee only has to grab items from a particular section, they get to knwo that section and their efficiency improve while travel time decreases.
Place items at ground level when possible, as horizontal orientation is more efficient for scanning SKU numbers. If you need to use vertical space, put your least-picked items above, making picking times faster for most items.
If you have items that are ordered much more commonly, group them together. This improves the density of picks, making it faster for workers to pick the items that are mostly likely to come up on an order.
Keep your high-pick items on pallet racks to make restocking go faster, keeping things moving. Items that are picked less often can go into shelving bins, freeing up valueable warehouse space.
Consider adding an integrated warehouse/labor management system or spending additional time studying your existing system to help determine where additional efficiencies can be implemented into your warehouse.
If you haven’t had the opportunity yet, consider moving to mobile or cloud-based technologies. This allows your workers to find solutions and verify order information on the fly instead of having to spend time tracking it down.

Now that you’ve got some fresh ideas on whether your warehouse can be reorganized or needs to be expanded in some fashion, it’s time to take action. Spend time considering which options will best serve your purposes. If you need to find money in the budget for new pallet racks, shelving or secured storage, remember that Russell is happy to buy outdated warehouse equipment and supplies. Contact us today to find out how we can help you make your warehouse functional again.