Cut Costs with a Partial Pallet Area in the Warehouse
To check for savings, compare the cost of relocating material to the cost of keeping the partial pallet in place.
(Boonton, NJ, November 12, 2009) All warehouses have partial pallets occupying full pallet positions. For some, this may be no more than a statistical element in calculating warehouse utilization. But when the warehouse is nearly full, partial pallets can have a real impact.
If you're in that situation, Jack Kuchta, president of consulting firm Jack Kuchta LLC and author of How to Save Warehouse Space, says it may be useful to compare the cost of relocating material to the cost of keeping the partial pallet in place.
In the November issue of industry newsletter Distribution Center Management, he shows readers how. The three principal factors in the calculation are:
- The partial pallet turnover time. This is the number of days that half pallets or less remain in storage.
- The cost of relocation calculated as the fully burdened labor cost of moving the partial pallet to a half pallet size location.
- The daily cost of a pallet location. For this cost, "I use the total non-labor building costs of the storage space — total building cost times the percent of the building used for storage divided by the number of pallet locations," says Kuchta.
When the partial pallet turnover time multiplied by the daily location cost exceeds the relocation cost, it is time to create a partial pallet area.
To read the full article Creating a partial pallet area can reduce travel time and improve productivity, visit the Distribution Group website at http://www.DistributionGroup.com/featured_articles.php.
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For more than 40 years, Distribution Group publications have helped distribution center and warehouse managers increase productivity, cut costs, and meet increasing customer demands. Distribution Group publishes Distribution Center Management newsletter, books and reports, and a free e-newsletter.