In today’s fast-paced business landscape, optimising warehouse storage capacity is necessary. The ability to efficiently store and manage inventory has a direct impact on supply chain performance and, ultimately, your bottom line. In our whitepaper, we explore why storage capacity plays a pivotal role in the world of logistics.
What is Warehouse Storage Capacity?
At its core, a warehouse storage capacity refers to the maximum volume of stock it can hold. Whether measured in terms of pallets or the value of stock, this metric is a crucial indicator for warehouse efficiency. When a warehouse gets jam-packed beyond its capacity, it struggles to handle new arrivals efficiently. This not only results in orders taking longer to fulfil but can also throw a wrench into the entire supply chain, potentially causing delays and disruptions.
The Driving Forces Behind Stockholding
Stockholding is subject to both short-term and long-term fluctuations. Various factors influence the growth or reduction of stock levels. These include business growth, evolving product ranges, changes in procurement strategies, and the intricacies of your logistics strategy. Warehouses with multiple storage locations, for example, require more safety for stock, affecting overall stock levels.
Balancing Act: Optimising Stockholding
Optimising stockholding and warehouse capacity involves two distinct activities:
1. Stock Optimisation: This aspect ensures the right balance between service levels and the cost of holding stock for each item.
2. Space and Flow Optimisation: This facet focuses on making the best use of physical warehousing equipment and space for storing goods efficiently.
Stock Optimisation and Forecasting
While reducing stock levels can lead to efficiency gains and reduced storage requirements, it’s not without challenges. The goal should be to optimise stockholding levels, striking a balance between service levels, resilience, and procurement strategy against inventory holding costs.
Optimising Storage Methods
Optimising storage is a process consisting of four key phases:
1. Understanding Current Capacity
2. Requirements Definition
3. Options Modelling
4. Fully Developing the Solution for the Preferred Option
Analysing your existing storage media and layout, as well as the flow and utilisation, forms the foundation for making improvements. Operating at or near 100% storage capacity can lead to inefficiencies in downstream processes.
Requirements Definition
Understanding current storage is not enough. You must project future storage requirements, considering growth, seasonal trends, and volume analysis. Specific stock requirements, such as segregation rules, must also be factored into your layout design.
Options Modelling
Develop various options based on factors like space utilisation, financial resources, and available capital. Consider factors such as space utilisation, access to pallets/stock, throughput speed, overall warehouse space requirements, and offsite storage opportunities.
Fully Develop the Solution for the Preferred Option
Prepare detailed plans, schedules, and cost estimates for the preferred option. Consider the impact on operating processes and any system implications. Establish a realistic timeline and identify dependencies for a smooth transition.
Where to Find Help
When it comes to optimising storage capacity, our company, The Supply Chain Consulting Group, is here to assist. With years of industry expertise, we specialise in providing comprehensive logistics consultancy services tailored to your unique requirements. Our professional consultants can guide you through the process, offering expert insights and practical solutions to maximise your warehouse’s storage capacity and operational efficiency.
Scan the QR code and get our full version of ‘The Ultimate Guide of Optimising Storage Capacity’ and see how we can help you achieve efficiency in your warehouse. Also, you can contact us on +44(0)1926 430 883 or send your enquiry over on info@sccgltd.com.
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