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asset tracking and logistics, warehouse management encompasses everything that happens in a
warehouse. Whether they own one warehouse or several, businesses can control the entirety of
their warehousing operations.
Warehouse Utilization Management
Meaning: WarehouseUtilization Management measures and manages the efficiency with which the
warehouse uses its inventory storage capacity.
As lean warehousing, cost-effectiveness, and increased efficiency and productivity become a way of
life for warehouse professionals, maximizing space utilization is more critical than ever before. To
create an effective warehouse design, you must optimize your space and layout. Saying that you’ve
already organized your warehouse effectively is one thing; knowing that you’ve truly optimized
your space is another. That’s where accurately calculating your warehouse space utilization comes
in.
Even though it’s a fairly straightforward process, many warehouse managers don’t take the time
to calculate their warehouse space utilization because they convince themselves they simply don’t
have enough space. In truth, many warehouses only use 20% of their space at any given time. To
calculate your warehouse space utilization so you can decrease costs, increase productivity, and
improve your bottom line, follow are steps:
1. Calculate the Total Size of Your Warehouse
One of the first mistakes warehouse managers make in calculating the size of their warehouses is
using a blueprint and finding the total square footage. This method will not help you in optimizing
your warehouse because it does not account for office space or other areas that you cannot use for
storage. Rather, you should use the total square footage as a starting point. Then, subtract square
footage used for office, restrooms, and other non-storage areas. Then, multiply your remaining
square footage by the warehouse space clear height to arrive at your storage capacity in cubic feet.
Warehouse space clear height is the distance from the finished floor of the warehouse to any overhead
object. Most warehouses are industrial shell buildings, so the clear height often is characterized as
the clear height to any steel; however, if your warehouse has suspending lighting, a fire protection
system, or mechanical equipment, the clear height would be the distance from the warehouse floor
to the lowest overhead object. Warehouse managers must account for warehouse space clear height
because it impacts storage stacking height.
2. Calculate Your Inventory Cube Size
Once you have calculated your warehouse storage capacity, or cube size, you need to determine
your inventory cube size. Keep in mind that your inventory cube size includes the racking areas
in which the inventory is stored. Use the storage area footprint to multiply the length and width of
racks by the height of the highest load in each area. Add this cubic volume for each area to arrive
at your inventory cube size.
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3. Calculate the Storage Cube Size in the Warehouse
While you started by calculating the total storage capacity of your warehouse in cubic feet, you
need to determine your actual storage cube size. This requires you to measure the footprints of
each pallet rack and then calculate their total vertical storage capacity. Then, multiply the capacity
of each rack by the total number of warehouse racks you have to determine the true size of your
existing storage cube.
4. Determine and Evaluate Your Warehouse Utilization Space
The final step is comparing your warehouse cube size to your inventory cube. Divide your inventory
cube by your storage cube to see how well you are utilizing your available storage space. Remember
to avoid using the total storage capacity of your warehouse because it is merely theoretical. You
need to use space for your racks, have empty space for workers and forklifts to operate, and allow
for efficient material handling.
Ways to improve your warehouse utilization:
The Starting Point
Quantify your storage profile in terms of capacity and utilization. Thoroughly understand the
flow and utilization of the current layout, including rack configuration, slotting/pick philosophy,
receiving, putaway, replenishment, inventory management and packing and shipping. Include
seasonal peak trends and a thorough volume analysis of inbound and outbound product flow.
Use Your Vertical Space
Look up and make sure you’re using all the vertical space available. Investigate storage media to
take advantage of your clear span height. How much cubic feet of vertical space is not being used?
Be sure to know how your design might impact your sprinkler design and fire code.
Analyze Your Department Space
Identify functions that do not require high ceilings in areas where lower stacking heights are dictated
by the clear height. We often see unused overhead space where large departments like packing and
shipping are performed.
Consolidate Locations
If you have multiple locations for storing the same item, consider combining them to create better
warehouse space utilization. This can be done during the putaway process and as a standalone
function.