10 Ways to Improve Warehouse Space Utilisation

Last Updated: 

February 9, 2024

10 Ways to Improve Warehouse Space Utilisation

Running a warehouse or distribution center is like playing a giant game of Tetris. You've got a whole load of boxes that need to fit into a limited space, and how you arrange them can make a huge difference. If you do it wrong, things can get messy and confusing fast. Orders could take longer to fulfil, safety risks might increase, and costs can rise quickly.

Key Takeaways on Improving Warehouse Space Usage:

  1. Implement a Warehouse Management System (WMS): A WMS controls the movement and storage of materials within a warehouse, tracking inventory levels and stock locations, helping to maximise warehouse space use.
  2. Use Horizontal Carousels: These automated storage and retrieval systems store many items in a compact area, making efficient use of flat space. They also improve efficiency by bringing items to the workers instead of the other way around.
  3. Apply a Vertical Storage Solution: Make use of unused vertical space with high shelves, stacked pallets, and tall storage racks to increase storage capacity without expanding or relocating.
  4. Use Pallet Racking Systems: Pallet racking stores palletised materials in horizontal rows with multiple levels, providing an efficient way to manage warehouse space and maintain organisation.
  5. Adopt a Lean Inventory Management Approach: Inspired by Lean Manufacturing principles, this approach reduces unnecessary inventory in the warehouse, thereby increasing warehouse space usage.
  6. Optimise Picking Paths and Locations: Reducing the distance and time it takes for workers to collect items can significantly improve warehouse efficiency. This can be achieved by storing frequently picked items in easily accessible locations and using a WMS to determine the most efficient picking routes.
  7. Use Automated Storage and Retrieval Systems (AS/RS): AS/RS are computer-controlled systems that automatically place and retrieve items from specific storage locations. They make excellent use of vertical space and increase storage density.
  8. Consolidate Products with Cross-Docking: This strategy involves transferring incoming goods directly to outgoing trucks, reducing the need for storage and improving warehouse space usage.
  9. Minimise Aisle Widths: Narrowing the width of aisles can create more space for inventory. This can be achieved through the use of narrow aisle forklifts, AS/RS, and mobile racking systems.
  10. Regularly Audit Warehouse Space Utilisation: Regular audits can help identify wasted or underused space, allowing for corrections and better space utilisation.
Discover Real-World Success Stories

You might think the answer is just to get a bigger warehouse. But that's like buying a larger closet when you can't find your clothes. Sure, you'll have more room, but if you don't organise things better, you'll just end up with a bigger mess. So, what can you do if your warehouse is bursting at the seams and you're struggling to keep track of everything? Don't worry; you're not alone. Many businesses face this problem, and there are straightforward solutions that can help.

This article will share ten simple ways to improve warehouse space utilisation and maximise productivity and accuracy while accelerating and facilitating business operations. Keep reading to discover some game-changing technologies, tips, and tricks.

1. Implement a Warehouse Management System (WMS)

A Warehouse Management System (WMS) is a software application designed to support and manage the operations in a warehouse. It helps control the movement and storage of materials within the warehouse and enables a seamless link to order processing and logistics management systems.

This system provides centralised control to track inventory levels and stock locations. You can use a WMS to know exactly where specific items are, how much each item is left, and where there's open space for new items. A good WMS will help you use your warehouse space much more efficiently by ensuring fast-moving items are easily accessible and slow-moving items don't take up prime warehouse real estate.

2. Use Horizontal Carousels

Horizontal carousels are automated storage and retrieval systems that rotate shelves or bins along an oval track in a horizontal plane. Using a horizontal carousel means storing many items in a compact area, making better use of the warehouse's flat space, which is especially helpful in low-ceiling environments.

Besides intelligent space utilisation, horizontal carousels improve efficiency. Instead of workers moving to pick items, the items are brought to the workers. When an item needs to be gathered or stored, the carousel spins around to present the required bin or shelf to the operator, reducing the time and effort spent walking and searching for items.

3. Apply a Vertical Storage Solution

In many warehouses, a significant amount of vertical space goes unused due to the lack of appropriate storage solutions or because it's not considered in the original design. However, as warehouse space becomes scarce, utilising the vertical space becomes a cost-effective and efficient way to increase storage capacity without expanding or relocating.

Vertical storage solutions involve using high shelves, stacked pallets, and tall storage racks to store inventory upwards rather than using just the floor space. Systems such as multi-tier racking, second-hand mezzanines for warehouse optimization, or vertical lift modules can take advantage of the vertical space. These solutions help create more room on the warehouse floor and drastically increase the inventory you can store in the same footprint. By stacking items, you make better use of your available space and have an opportunity to better organise your items for improved efficiency.

When planning your new storage solutions, ensure a proper site survey has taken place so you can sleep easier knowing any equipment like forklifts, trollies, and anything else will fit.

4. Use Pallet Racking Systems

Pallet racking stores palletised materials in horizontal rows with multiple levels. These systems are integral in managing warehouse space efficiently and maintaining organisation, as they allow for easy access to various items without taking up too much floor space.

Pallet racking systems are available in several types, including selective racks, drive-in/drive-thru racks, push-back racks, and pallet flow racks, each with unique benefits. For example, selective racks provide immediate access to all pallets, making them ideal for warehouses with various products, while drive-in/drive-thru racks are perfect for high-density storage of similar products.

While discussing pallet racking systems, it is essential to mention the innovative solutions that can further optimise the storage process. Exploring layer picker options can be a game-changer in your warehouse management strategy. These tools facilitate the efficient handling of single or multiple layers of products, enhancing the speed and accuracy of the order-picking process.

Implementing the right pallet racking system can drastically increase the usable space in your warehouse, leading to more efficient use of available space. It can help maintain inventory organisation, improve accessibility to individual SKUs, and increase warehouse productivity by reducing the time it takes to locate and retrieve items.

Palletised Storage in a Warehouse
[Source: Freepik]

Using these systems can also enhance safety in the warehouse, as items are stored securely, preventing potential accidents that can occur from improperly stored inventory.

5. Adopt a Lean Inventory Management Approach

Lean inventory management, inspired by the principles of Lean Manufacturing, increases warehouse space utilisation by reducing the amount of unnecessary inventory kept in the warehouse. It emphasises constant monitoring of inventory levels and responding to changes in demand. This helps avoid overstocking items that consume valuable warehouse space and increase costs due to spoilage or obsolescence.

Implementing lean inventory management often involves practices like Just-In-Time (JIT) inventory, where goods are ordered and received as needed rather than being stocked in large quantities. Another strategy is cross-docking, where incoming goods are transferred directly to outgoing trucks, with minimal or no warehouse storage.

6. Optimise Picking Paths and Locations

One of the most time-consuming activities in a warehouse is picking items for orders. The path workers take to gather these items can significantly impact the overall efficiency of warehouse operations. Planning the route pickers take so they can collect items in the shortest time and distance possible involves storing the most frequently picked items in the most easily accessible locations, such as closer to the packing and shipping area. This reduces unnecessary travel time and can dramatically improve productivity.

Picking paths can be optimised using several strategies:

  • Implementation of a WMS can digitally map out the most efficient route for pickers. 
  • Batch picking allows pickers to gather items for multiple orders simultaneously, reducing the number of trips to the same locations.
  • Zone picking divides the warehouse into different zones, assigning pickers to each zone.

By optimising picking paths and locations, you're not only improving space utilisation but also boosting warehouse efficiency, reducing picking errors, and increasing order fulfilment speed.

7. Use Automated Storage and Retrieval Systems (AS/RS)

AS/RS are computer-controlled systems that automatically place and retrieve items from specific storage locations. These systems use vertical space effectively, minimising the need for aisles and increasing storage density. With an AS/RS, you can store more items in the same area because the systems can safely stack things higher than human workers could and operate in narrow aisles. They can also retrieve items quickly and accurately.

While an AS/RS does require a substantial initial investment, the increased storage density, improved accuracy, and increased productivity can provide significant long-term savings, making it a valuable tool for enhancing warehouse space utilisation and overall operational efficiency.

8. Consolidate Products with Cross-Docking

Cross-docking involves distributing products from a supplier or manufacturer directly to customers or retail chains with minimal to no storage time. Simpler put, incoming goods are directly packed in outgoing trucks without storing them in the warehouse. 

While cross-docking requires good coordination and a sophisticated WMS to manage the direct transfer of goods, it can significantly improve warehouse space utilisation by reducing the storage required. It also helps improve efficiency and lower handling costs by minimising the time and labour involved in storing and retrieving items.

9. Minimise Aisle Widths

Warehouse aisles take up significant amounts of space for product storage. By reducing the width of these aisles, you can open up more space for inventory. Traditional forklifts require wide aisles to manoeuvre, but switching to narrow aisle forklifts can reduce the aisle width. In addition to changing equipment, other technologies can assist with minimising aisle widths. For example, AS/RS can operate in very narrow aisles, and mobile racking systems can eliminate the need for permanent aisles entirely.

Minimising aisle widths allows you to fit more inventory into your warehouse and create a more efficient layout that improves the flow of goods and people within the space. This method should be combined with a well-designed storage system to ensure smooth operations and safety.

Picking Pallets in a Warehouse
Photo by Petrebels on Unsplash

10. Regularly Audit Warehouse Space Utilisation

Regularly checking and analysing your warehouse allows you to identify wasted or underutilised space. During these audits, you might find that certain items take up more space than necessary or that certain warehouse areas are cluttered or inefficiently used. You can correct these issues and better utilise your warehouse space.

Using a WMS can significantly assist with warehouse space utilisation audits, as it can provide detailed, real-time data about your warehouse operations.

Improving Warehouse Space Utilisation: Final Words

For many retail and logistics businesses, warehouses and distribution centers make up the largest overhead expenses. A survey from 2023 reveals that the average price per square foot of warehouse space has climbed to $8.22. These figures make it clear that getting the most out of every square foot makes the difference between running a cost-efficient operation and haemorrhaging money. It's not just about stuffing as much as possible into the space, either. Smart utilisation can improve workflow, increase efficiency, and even boost worker morale.

By examining and rethinking your warehouse space with the tips we've discussed, from implementing a WMS to auditing space utilisation regularly, you can improve your operations. Each warehouse is unique; what works best will depend on your circumstances. Experiment with different strategies, monitor the results and adjust as needed.

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