The process of warehousing is essentially a management of space and time. We improve this process by optimizing the use of available space, and then developing ways to handle more material in less time.

Other features can also be valuable, including improvement of housekeeping, reduction of damage and an enhancement of accuracy in shipping and receiving. However, space and time management remain the fundamental starting points.

Before we spend excessive time and money committing to high-tech applications, why don't we find ways to better use the things that we have right now?

Defining Your Goals

Why change anything? "If it ain't broke, don't fix it" has been a favorite quotation attributed to Bert Lance, a key advisor to former President Jimmy Carter. Some people waste time and money tuning engines that still run adequately or taking medicines to cure imaginary ailments.

When managers want to "fix" a warehouse, it is usually because they are running out of space. Others feel that cost of operating has escalated unreasonably. Others may perceive an erosion of quality, signaled by increased damage or complaints of errors.

If you are contemplating a change in your warehouse, start by defining your goals. What can you reasonably expect to achieve when the changes you plan are fully implemented?

Where Are We Now?

Unless you have an accurate benchmark of your current warehousing costs, how can you possibly know whether the changes you contemplate are worth doing? If you do not know where you are now, the road to nearly anywhere might seem attractive.

Logistics service providers (LSPs) track their costs on a per-unit basis in order to develop prices for their services based on a cost per case, pallet or hundredweight. The methodology for creating a per-unit cost is complex but not mysterious. Anybody could learn it, but relatively few warehouse operators have done so.

If you know the current storage cost for each pallet of product in your warehouse, you can then figure out whether an investment in a racking system can be justified. If you also know the handling cost for that pallet, you could determine whether there is a reasonable payback on an investment in a sortation system.

The best vendors of warehousing equipment are trained to demonstrate the payback potential of the product that they seek to sell. But it is useless to consider payback without an accurate per unit measurement of today's costs.

Improving Use Of Space

One space-saving tool is self-supporting pallet racking. A leading manufacturer of this product ran an advertisement with a small caption pointing out that this advertisement had originally appeared in 1938. The product has existed without design changes for many decades, and because it is plain and simple, it is easy to overlook.

Yet self-supporting pallet racking has some significant advantages. It can be used with products whose shape or fragility make conventional warehouse racking impossible. In situations where the fire regulators have requested in-rack sprinklers, this product is used without question. Because the product is extremely flexible, it accommodates the need for frequent layout changes.

Other simple uses of storage racking are frequently overlooked. One is gravity flow rack, now available as an attachment that installs into standard pallet rack beams. Flow rack allows a large number of items to be retrieved in a compact space, thus saving travel time. By concentrating the fastest movers in a flow rack aisle in one warehouse, travel time for order pickers is dramatically reduced.

The 80/20 rule (Pareto analysis) should be used to discover how to employ flow rack effectively. When the velocity of any SKU is extreme, it is better to put the item on a pallet rather than in a flow rack lane, because the item moves so fast that the lane must be replenished every few hours.

Some of our oldest warehouses are multistory buildings, and some of these structures have been well maintained and are in excellent condition. However, one user spent over $1 million to rebuild several freight elevators without investigating the much lower cost option of using vertical conveyors. Because vertical conveyors are designed to handle only freight and not people, they are not subject to the same stringent design and regulation used for conventional elevators.

Many users of high bay warehouses are not able to utilize the available high stacking space. In some cases, they have refurbishing or packaging operations that simply do not need high clearance. One answer is the use of mezzanines, but again vertical conveying of product to the upper-level must be considered.

The simplest way to enhance space utilization is to avoid storing items that should not be in the warehouse in the first place. Yet many managers are reluctant to address the issue of liquidating inactive product.

One chemical company retained obsolescent items that had failed quality tests or had been returned by a customer. In a few cases, this dead storage remained in the warehouse for as much as five years because no one was willing to authorize the destruction of this useless product.

Shortage of Docks

A chronic complaint of warehouse operators is that there are insufficient dock doors to allow efficient unloading and loading with today's increased volume. In many cases, physical limitations of the building make it impractical or impossible to provide additional dock doors.

In some cases, the real problem is ineffective usage of the doors that exist rather than an actual shortage of doors. Here are a few examples. Many warehouses dedicate one loading door to the placement of a trash hopper, even though it is possible to have a waste disposal system which does not require the use of a dock door.

Others reserve certain doors for specific carriers, and the door stands idle when a carrier is not being used. Many dock doors are unusable because loaded or empty trailers have not been pulled away when the loading or unloading process is completed.

There are at least three ways to get more work done with the same number of doors. One is to utilize unitized handling or automatic loading/unloading systems to reduce the time spent in handling each trailer.

Another is to initiate "drop and hook" arrangements in which truckers leave trailers in a storage yard. The transfer from yard to dock door is handled by a shuttle tractor. In this way, doors are never blocked by an idle trailer.

A third answer is to increase the hours devoted to loading and unloading so that doors are in use for up to 24 hours per day.

Handling More Product

The simplest way to move more product through the same warehouse is to increase hours of utilization. Yet many have deep concern about the risk of eroding quality with a second and third work shift. Unconventional shift schedules, such as 4/10 or 3/12, seem to be popular with workers as well as managers.

Making the manual handling job easier will always enhance materials handling efficiency, but the most obvious ways to do it are sometimes overlooked. You start with a Pareto analysis to identify the fastest movers. Next, be certain that the most popular items are stored in the "golden zone," those rack or shelf positions that can be reached without stretching or stooping.

Because the popularity of items can change over time or even from one season to another, the 80/20 rule should be repeated at frequent intervals. A proven way to increase productivity is to eliminate the number of times that each carton is handled. Whenever you see product being staged, ask if staging is really necessary.

Better use of information technology allows warehouse workers to improve their effectiveness. Use of scanners eliminates the need to read and write complex product codes. Locator systems eliminate or at least reduce waste involved in searching for misplaced items.

Perhaps the greatest missed opportunity to handle more product in less time is the simple act of measurement. Too many people equate time study with discipline, even though it is preferable to use measurement for reward rather than punishment.

The standards need not be complicated. Sharing measurement results with workers and supervisors is always desirable. Everyone likes to be a winner, and the whole team will work to improve the results when they realize that their company is dedicated to continuous improvement.

'Where's the Beef?'

A 1980s ad campaign for Wendy's made this saying famous, but the application for warehousing is obvious. When a vendor or someone on your management team urges the purchase of new "high-tech" equipment, ask the question just the way the little old lady did in the TV advertisement. When new equipment is considered, start by demanding to see a payback calculation that will readily justify the purchase.

Do you really need a completely new storage or handling system, or could you receive similar results through better utilization of the things that are already in your warehouse, or by acquisition of practical tools rather than fancy toys?