Racking and shelving may seem inanimate most of the time and of low priority but it influences warehouse costs significantly because the type of racking and how the warehouse layout is designed affect travel time as well as valuable space. If chosen and installed without enough consideration for warehouse layout, governed by the dynamics of stored products, it will only disappoint. Moreover, given that space costs money, the storage equipment should not be considered in isolation from their interface partners like warehouse trucks. Some forklifts, like the articulated kind, can allow warehouse operators to raise their pallet storage by 50% if they have been using conventional, counterbalanced trucks that need at least 3.5-mt wide aisles. These trucks also reduce space at aisle ends. But efficient layout, the right storage method and interface equipment are not just important for time and space costs; it also has consequences for staff costs and their effectiveness.
It is not unknown for some leading retailers to use new order picking staff where the walking is so high that within a week feet problems develop which lead to time off work and workers’ subsequent dismissal. Some warehouse operators get around the labour laws problem by hiring staff from agencies and so the contract is between worker and his/her agency. Such cavalier attitudes are tackling the problem from the wrong end.
Excessive travel time can raise labour costs so attention must be paid to slotting techniques to ensure that fast-moving items are in the most accessible locations and are close to the shipping area. But before the decision is made for this or that kind of racking solution, however, thought should be given about whom best to choose as supply partner. If delivery time is important to meet key trading periods and the mix of racking types high, one should favour the leading suppliers who offer the full range of products within their portfolio and the after sales support to back them up. Tenders from contractors who make nothing are likely to quote longer delivery times.
The cost of keeping inventory is often the highest cost element in many warehouse operations and will depend partly on location. Their costs have two elements, the opportunity cost of money tied up in stock, like interest, and the supportive costs like the space costs formed by land, buildings and associated expenditure. These supportive costs typically vary between £2 and £3 per pallet position per week, but could be much higher where land and labour costs are very high. Supportive costs for a 10,000 pallet store could easily, therefore, run to £1.5 million a year. This shows how critical it is to make as much use of warehouse space as possible.
With that driver in mind, storage equipment suppliers have developed many kinds of racking that emphasise space-saving techniques, but their costs vary widely and may involve significant additional costs like floor strengthening and flatness where high-bay warehouses are sought. Certain applications, like cold storage, often choose mobile racking because they offer very high storage density – a critical factor given that energy costs alone can absorb 25% of a store’s total running costs. This form of racking, however, is typically three times as costly as adjustable pallet racking A cheaper alternative would be drive-in/drive through racking but has relatively limited accessibility and is notoriously accident prone. Again, the stored products’ dynamics must be considered to arrive at the best choice. In very high bay cases the racking itself can govern the type of warehouse construction. This is very much the case for clad racks, where the racking is built first and the walls and roof added later but they are usually only justified above 25 mt storage heights.
In pursuit of the holy grail of maximum cube utilisation the aisle-free storage means like those from Toyota Materials Handling, Swisslog, Jungheinrich and SSI Schaefer come the closest and deliver up to 85% space usage. These do not necessarily require investment in new facilities but because the techniques of product access vary so to do the costs. Fortunately, the leading suppliers offer software packages to help buyers choose the right approach but they may not highlight the cost differences between the various techniques of aisle-free storage. This is where a good consultant could be useful.
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