There is only a certain amount of space in a confined building. If that building is a warehouse, then what can a warehouse manager do when he finds himself in need of more space to accommodate more products?
It is common for any size warehouse to experience space issues. These problems arise due to rapid growth, seasonal spikes, large discount buying sales campaigns, an inventory buildup due to manufacturers’ shutdowns, consolidation of a number of warehouses into one, and a slow selling period. All of these scenarios result in storage problems that occur due to three specific issues.
1. Too much of the right product.
2. Too much of the wrong product.
3. Poorly used warehouse space.
Warehouse executives may have a good initial feeling when the problem of too much of the right product arises. In short, there is an abundance of the right product available to accommodate customer demand. That seems to be a good thing. However, it takes the warehouse executives time before they realize that warehouse operations are well below productivity quotas and conditions in the work environment are not safe.
A warehouse working under these circumstances probably suffer such issues as pallets filled with products sitting in the aisles, stacked in dock areas, or placed on rack end caps. Moreover, there’s a real possibility that multiple SKUs of products may be mixed in single bin locations.
There are all sorts of issues here that affect warehouse operation including blocked routes and visibility that can result in safety issues, problems in finding inventory, decreased worker productivity and multiple handling of products. The good thing here, however, is that the bottleneck probably won’t last too long because the products are moving through the warehouse quickly. This helps limit the existence of the problem to maybe a few weeks.
In the case of too much of the wrong product, some executives’ projection of sales and their production planning to accommodate were way off the mark. However, this scenario also suggests that the warehouse operation is not managing inventory levels or obsolete products well. When there are too much of the right product, warehouse managers can hire more personnel to speed up operations. However, in the case of too much of the wrong product, inventories are not picked for months and even years.
Poorly used warehouse space may take some time to become obvious to warehouse executives. That’s because the problem arises due to steady growth, changing storage requirements or change in product mix, and always expanding service requirements. This problem is a common happening for warehouses. That’s because warehouse operations are based on the handling of predicted volumes. Warehouses are expected to adjust as customer demands change and become more efficient over time. In this case, warehouses will execute short term plans over the long run including creating customized floor-ready merchandise, hand-pricing merchandise at the piece level or creating mix loads to speed up orders when products are usually shipped in full case or full pallet quantities.
As a result, there is a loss of floor space and labor from other important warehouse functions. Other issues due to poor use of space include bad use of vertical space, too wide aisles and too many products in single bin areas and/or partial unit loads left in full unit load locations.
Don’t worry. Finding more space and improving inventory management can fix all of this and we will show how with the next blog.