There are many hardware and software cost elements that go into running an effective warehouse, but when pursing an optimum design that balances capacity and operational efficiency for a new warehouse, software issues, in particular, should not be skimped or overlooked. Often the biggest cost in running a warehouse is the cost of holding inventory, an area where software, like real-time stock forecasting systems, can not only reduce such stock holdings by a third without affecting service levels, but also consequently the size of any new or existing warehouse being considered. Another software tool considered critically important when planning a new warehouse is simulation. A good example of what can happen when this is ignored was a household-name retailer who agreed with its 3PL partner that simulation would be a useful thing to have but neither was prepared to pay for it. The result was bottlenecks in the warehouse which led to empty shelves and a fired 3PL.

This cheese-paring attitude can infect the many hardware equipment choices. Take, for example racking and shelving, which can seriously impact safety issues. If safety is the most important factor in static storage then the quality of racking is the most important ingredient of that. Higher quality racking will be better at maintaining its structural integrity. Going for cut-rate products can create problems because one cannot always tell from which materials they are built as they don’t have a traditional audit trail.

In the current environment some warehouse operators treat racking and shelving as a commodity where the lowest price is the dominant factor. Perhaps worse is that some will buy secondhand racking when looking to fill extra space newly available in an effort to lower their start-up costs. This can be false economy in that up to 25% of used racking can be unusable owing to missing or mismatched parts, damage from fork truck impact, improper use, shipping, handling or disassemblyreassembly.

Any remedial work could delay stock placement on the racks and so lose revenue. One protective move against this would be to inspect every square inch of the used racking but how often is that done? Without such inspection you really don’t know what you are getting.

Racking and shelving may lend itself to providing up to 50% more pallet storage space within the existing cube. This can occur where, for example, aisles are geared to handling conventional counterbalance forklifts that require at least 3.5 mt-wide aisles. A switch to articulated forklifts which need only 1.6 mt wide aisles could deliver that 50% space-saving advantage, or, in the case of a switch from reach trucks in 2.8 mtwide aisles, some 30% extra pallet positions are possible.

Another possibility to squeeze more storage and picking space within an existing shell is the mezzanine, a measure that seems to be growing in popularity as ecommerce exercises a greater influence on logistics. They can be integrated with all types of racking and if less than 50% of the overall floor area they may not need to be fire rated. Moreover, they may not need planning permission, depending on locality, sizes and other conditions. Their installation need not seriously disrupt business because mezzanines are freestanding with all parts made offsite. But how disruptive would be the racking re-arrangements?

At one time this was a big issue but Flexi Warehouse Systems’ fairly new adjustable pallet rack and sprinkler reconfiguration technology makes it easier and cheaper for warehouse operators to maximise their space efficiency. Flexi claims that their method minimises disruption and cuts the net cost by over 50% when compared with traditional methods.