March 24, 2021

Four Tips for Optimizing Existing Warehouse Space

Four Tips for Optimizing Existing Warehouse Space

The e-commerce boom created a drastic increase in demand for industrial real estate, leaving many retailers and distributors tighter than normal on space in their warehouses and fulfillment centers. Though a larger structure or an additional facility may still eventually be in the cards, it may be possible to buy some more time from your current facility by getting the most out of the space you already have.

If your warehouse has been in operation more than a couple of years, it’s likely that your original warehouse plan is no longer optimized for the changes that have happened across your operation. When looking for extra storage capacity in your warehouse, these tips may help you find some unused space.

Examine Aisle Width

How wide are your aisles? Compare the width of your warehouse aisles to your material handling equipment. If your forklifts have extra room beyond what they need to safely to turn and operate, you might be able to reclaim valuable square footage by moving your racks or shelves closer together. If your warehouse is currently set up for two-lane traffic in the aisles, consider implementing a one-lane, one-way traffic system that would allow move your racks in significantly to add more. Depending on your product, you could also switch to a smaller forklift that can operate in narrower aisles.

Moving existing racks in an operational warehouse is no small feat. Before moving forward, you’ll need to balance the potential space you might gain with the cost of repositioning racks to see if it’s worth it.

Improve Inventory Management

If you’re running out of space, you probably notice it most when you try to find shelf space for new and popular items. Conduct an analysis of your held inventory and see what you need to have on hand and what you could do with less of. Also consider whether its cost-effective to hold more high-demand inventory in stores to free up some room in your warehouse.

Perhaps most importantly, find and purge inventory that will never sell or get used. If you don’t regularly clean house, chances are you have some low-potential goods taking up valuable storage space. To make a long story short: Those VCRs and CD players aren’t going to sell. Let them go.

Explore Vertical Space

If you think you’re out of room, then look up. How much free space is up there between your racking and your rafters? In most states, you can place racks within two or three feet of your fire suppression system, though you’ll need to check your local codes for the exact distance to make sure any new storage solutions you implement remain compliant. Also check your shelves and pallet racks for unused vertical space above the actual pallets or stored items to make sure you aren’t wasting unnecessary space in cubes or on shelves.

Taking advantage of unused vertical space will probably require an investment in a taller racking or storage system. If you have enough unused cubic footage floating above your head, however, the investment will pay for itself over time.

Organize Returns Management

Last but not least, it’s probably time to look in that corner. You know the one. Yes, THAT corner, where your team dumps all the returns to look at later. Except nobody actually looks at them for weeks on end and they just keep piling up. If you haven’t made any effort to streamline your reverse logistics, doing so can help you find some much needed storage capacity in your distribution center. Processing those goods in a timely manner for return to inventory or disposal/donation will allow you to use the dreaded returns dump for more effective storage.

About Phoenix Investors

Founded by Frank P. Crivello in 1994, Phoenix Investors and its affiliates (collectively “Phoenix”) are a leader in the acquisition, development, renovation, and repositioning of industrial facilities throughout the United States. Utilizing a disciplined investment approach and successful partnerships with institutional capital sources, corporations and public stakeholders, Phoenix has developed a proven track record of generating superior risk adjusted returns, while providing cost-efficient lease rates for its growing portfolio of national tenants. Its efforts inspire and drive the transformation and reinvigoration of the economic engines in the communities it serves. Phoenix continues to be defined by thoughtful relationships, sophisticated investment tools, cost efficient solutions, and a reputation for success.

Kurt Jensen is the Senior Vice President, Acquisitions & Leasing of Phoenix Investors, a national real estate firm specializing in industrial real estate based in Milwaukee, Wisconsin. He is a seasoned executive with over 25 years of entrepreneurial, management, and deal-making experience.

Frank P. Crivello is a Milwaukee-based developer and Chairman & Founder of Phoenix Investors.

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