The Distribution Group’s Distribution Digest

 

Dear Distribution Professional,

When I ask warehouse and distribution center managers to describe the biggest challenges they face every day, one of the most common responses is, “Not enough space.” It’s simply the nature of warehousing to try to move the most product through the least amount of space. However, finding that balance is not always easy — especially when the business grows while the distribution center remains the same size.

We’ve collected tips and advice from several managers who have faced these space limitations. Here are some of their ideas.

Idea Starter #1 — Low-cost ways to increase space

If you are facing space limitations, begin by looking at the small, inexpensive improvements that don’t take much effort or investment but can save you a lot of space. These ideas have proven successful for several facilities.

• Evaluate your pallet configurations. How you stack your pallets can impact space utilization. For example, make sure that the stacking profile takes full advantage of the pallet footprint — any unused pallet space is wasted storage. Consider stacking higher if possible. One distribution center was able to eliminate an extra six inches of wasted space and add an additional row of boxes on several pallets by stacking boxes on their side.

• Eliminate unwanted materials. A warehouse is a collecting ground for items no one seems to know what to do with. Warehouse managers have been responsible for storing old equipment, paperwork, bank receipts, and even Christmas decorations over the years. Put these in out-of-the-way areas, such as around column obstructions that won’t allow for pallet storage.

• If you can’t find enough out-of-the-way locations to store these materials, suggest moving them to a third-party warehouse. Many times, the company simply doesn’t realize what it costs to store these items. When it sees the price tag, it may decide that the items are not worth keeping around.

• Find hidden storage space. Consider areas that you wouldn’t otherwise think of for storing ancillary items. For example, one distribution center manager began storing extra shrink wrap and reinforced tape under the conveyor. This opened up a pallet location, yet cost nothing.

• Get rid of excess inventory with a public sale. One catalog and online retailer holds an annual clear-out-the-warehouse weekend sale at one of its distribution centers. Excess inventory is initially discounted 50 to 80 percent below catalog costs, and the company continues to cut prices as the weekend sale progresses. More than 20,000 shoppers attend the event, spending as much as $1.5 million on product that otherwise would sit around the warehouse collecting dust and taking up space.

Idea Starter #2 — Dealing with seasonal products

Seasonal peaks are notorious for creating space problems. Even if the facility is operating efficiently during most of the year, seasonal peaks can overwhelm a warehouse. Here are two tips for dealing with seasonal requirements.

• Use third-party warehousing. One home improvement retailer uses a third-party provider to manage the high-velocity oversized items during its spring selling season. The products move direct to store without burdening the retailer’s warehousing network.
• Store in aisles. While it may sound counterproductive, with proper planning, aisle storage can be an effective approach. First, use a short aisle, and select a product that will arrive at one time. This makes it easier to stock the aisle. Do not select a product that requires strict first-in/first-out handling. If possible, use an aisle with the same product in the racks. Ship the product in the aisle first. This makes the racks part of deep bulk storage, creating space where there was none before.

I hope that these ideas have given you some food for thought and action until the next edition of Distribution Digest.

Sincerely,

Troy Reynolds
Editor, Distribution Digest

Subscribe FREE right now!