Knowledge Post: As a warehousing and logistics professional, how can you improve warehouse space utilization? How do you calculate the required warehouse footprint?

As warehousing and logistics professionals, what strategies should we know to improve warehouse utilization? And how can we effectively plan and allocate warehouse space?

How can warehouse space be effectively planned and optimized?

01 Measuring and Improving Warehouse Utilization

First, we need to understand two key metrics for measuring warehouse utilization: warehouse space utilization and storage volume utilization.

01 Warehouse space utilization rate

How do you calculate warehouse space utilization? First, let’s clarify the relevant definitions:

1 ) Gross floor area: Typically refers to the gross floor area of the warehouse. It is calculated by measuring from the exterior wall foundation. Length * The total floor area is the sum of the areas of all floors in the building.

2 ) Actual area: Measured from the interior walls of the warehouse. Length * Subtract the area occupied by obstacles and structures (columns, partition walls, staircases) from the total floor area.

3 ) Usable area: calculated by subtracting from the gross floor area the areas occupied by main and secondary circulation paths, wall setbacks, and column footprints.

4 ) Usable area: the actual area occupied by the goods on the pallets.

Currently, warehousing companies typically calculate the leased area based on gross floor area. However, when subletting to customers for storage purposes, the actual usable space available for storing goods is the net floor area. Consequently, the warehouse’s space utilization rate… = Usable area / Gross floor area.

   Warehouse space utilization index:

1 , property utilization rate =( Warehouse floor area / Property area ) × 100%

2 , Warehouse space utilization rate = (Available warehouse space / (warehouse floor area) × 100%

3 , Warehouse space utilization rate = (Warehouse usable area / (Usable warehouse area) × 100%

The storage area typically accounts for a certain percentage of the usable area. 60% Left and right, lower than 30% The warehouse utilization rate is too low, higher than 60% The utilization rate is relatively reasonable. Specifically, the area of the inbound quality inspection zone is… 10%~15% , the area of the outbound storage and shipping waiting zone reaches 15%~20% , storage area size 50-70% Left or right. Once the storage area ratio falls below an acceptable threshold, the warehouse’s layout and planning should be reassessed.

02 How can warehouse space utilization be improved?

( 1 ) Rational planning of warehouse storage areas

Unnecessary functional areas can be minimized, and columns and irregular spaces should be rationally designed and utilized.

( 2 ) Reasonably design the rules for placing goods.

Proper management of pallet stacking rules is essential; otherwise, it can easily compromise the design of aisle widths.

( 3 ) Establish utilization rate standards for different industries

For example, the utilization rate in the home appliance sector is typically higher than that of fast-moving consumer goods. At the same time, warehouse‑area planning should vary across industries. Once industry‑specific standards are established, we can quantify our key performance indicators, which will help improve utilization rates.

( 4 ) Ensure effective warehouse management of products.

Deliver a great product. ABC Classify and optimize warehouse zones; for certain products, multi-deep stacking can be employed to improve space utilization.

( 5 ) Improve on-site warehouse management

With the same plan, different managers can lead to varying levels of site utilization. On-site management must be robust, with timely inventory counts and orderly stock organization.

03 Warehouse space utilization rate

Warehouse space utilization rate = (Actual quantity or volume of inventory items) / Warehouse storage quantity or volume × 100%

Methods for improving warehouse space utilization:

1 ) ABC Category + Dynamic Storage Location: A Classified as gold 10 m Inside, C Classified “S”-shaped layouts are stacked on upper floors or at the far end, boosting average space utilization. 18 %+ ；

2 ) 5S Management +FIFO Management + Storage location visualization measures, 3 Increase the floor area ratio by one month. 15 %+ ；

3 ) Utilization of three-dimensional space: use shelving units. 8m Above, or when equipped with a narrow-aisle forklift, it can be lifted. 40 % Storage bit.

02   Steps for Calculating Warehouse Space Appropriately

Calculating warehouse space cannot be done in theory alone; it requires a comprehensive assessment based on real-world conditions. Below are some key steps and methods to help you more accurately determine the required warehouse footprint:

01 Inputs for warehouse area calculation

1 ) Business Operating Model

Different business models entail varying warehouse layout designs and distinct functional requirements for each storage area. B2B Business, B2C Business still is B2B and B2C All services are available, such as 2C The business will require larger floor areas for operational zones such as the packaging area and the verification area.

2 ) Clarify product characteristics and inventory levels:

Clearly define the characteristics of warehouse inventory, including the type, quantity, volume, and packaging method of the goods.

Inventory Level Estimation: Based on the company’s future development plans and sales forecasts, estimate the trend of inventory changes over the coming period. This serves as the foundation for determining warehouse space requirements.

Generally, it is necessary to calculate the average daily inventory level by summing the daily inventory quantities and dividing by the number of days. Meanwhile, the specific inventory levels for each warehouse should be determined based on the characteristics of the goods and their turnover cycles.

Daily inventory level = Σ Daily Inventory Quantity / Number of days

Daily shipment volume = Σ daily shipment volume / Number of days = Daily shipment volume.

3 ) of the goods SKU Quantity and stacking characteristics:

Under the condition of a fixed total cargo volume, SKU The greater the quantity, the more storage locations are required, and consequently, the larger the area needed. Factors such as the stacking height of goods and whether pallets can be stacked also significantly impact the required floor space.

4 ) Determine the storage method for the goods:

Different storage methods for various goods can vary significantly in their requirements for warehouse space, so it is essential to select an appropriate method based on the characteristics of the products. For example, palletized storage requires consideration of pallet dimensions, stacking height, and aisle width, while bulk goods necessitate attention to stacking height and floor space. Common storage methods include:

● Palletized storage: Suitable for standardized, high-volume goods, facilitating mechanized handling and enhancing efficiency.

● Rack storage: Enhances space utilization, ideal for products with a wide variety and small quantities, and facilitates picking.

● Bulk storage: Suitable for large-volume goods such as raw materials and construction materials, helping to reduce packaging costs.

5 ) Warehouse operating procedures:

Each picking method has distinct requirements for warehouse aisle space; for example, picking with a hand truck, using a forklift, or employing other automated equipment all necessitate different operational spaces and varying floor‑area needs.

02 Calculate the actual storage area

Once the storage method has been determined, you can then… Calculate the actual storage space required with meticulous precision. For example, if palletized storage is used, determine the footprint of each pallet, multiply it by the number of pallets, and then add the necessary aisle and operational clearances. The specific calculation method will vary depending on the chosen storage approach:

1 ) Ground-level warehouse (using pallets for flat stacking of goods):

Currently, the standard pallet dimensions in the industry are 1.2x1 ( m ). Accordingly, one can determine the inventory levels and the proportion of each category within the stock. SKU How many units are there, how should each pallet be stacked on every level, and what is the maximum number of layers? Based on this, estimate how many pallets will be required and what the total floor space will be.

2 ) Automated storage and retrieval system (goods are stored on racks):

First, determine which type of racking is suitable for the warehouse’s inventory based on your forecast, and calculate the floor space required for each rack by considering its length and width.

Common types of racking include beam‑type racks, drive‑in racks, gravity‑flow racks, and shuttle‑car racks. For products with few SKUs but large order volumes, it is advisable to use high‑capacity racks such as drive‑in or shuttle‑car systems; the latter is currently more popular on the market. If the product mix is diverse and order sizes are small, beam‑type or gravity‑flow racks are recommended. When dealing with a limited number of SKUs in large quantities, while designing high‑capacity racks, it is essential to supplement them with beam‑type racks. This ensures that any leftover loose items in the high‑capacity racks can be promptly removed, thereby improving the utilization rate of the high‑capacity rack slots.

Secondly, the shelf height must be calculated; shelf height = Warehouse clear height / (Cargo height + Shelf thickness and redundant space). ( P.S. , the horizontal clearance between the vertical projection of the lamp and the stack shall not be less than 0.5m )

Finally, based on the inventory levels and the shelf height, determine the number of shelves required, and then estimate the total floor space needed for all the shelves by multiplying this by the footprint of each individual shelf.

03 Estimate channel width

The width of general warehouse aisles can be determined based on the following factors:

Based on the material turnover rate, the physical dimensions of the materials, and the handling equipment used within the warehouse, for warehouses with high material throughput and frequent receiving and shipping operations, the aisles should be designed to accommodate two-way traffic. The minimum aisle width can be calculated using the following formula:       

B=2b+C

In the equation:

B —Minimum channel width (m) ；

C —Safety clearance is generally adopted as 0.9m；

b —Transport equipment width ( Including the width of the material to be moved) m 。

The typical passage width is:

In typical warehouses that do not require forklift operations, the aisles are generally… 0.9m；

When handling with a manual hydraulic pallet truck, the aisle width is generally 1.6~2m ；

Small electric forklifts are generally 2.4~3m ；

When handling pallets with a forklift, it is generally 3.2 ~ 4.2m。

In addition, the relevant provisions of the national standard “Code for Fire Protection Design of Buildings” must also be taken into account: the clearance between stacks and electrical equipment shall not be less than 1m ; The spacing between stacks shall be no less than 1 ㎡; the width of the main passageways shall not be less than 2m ; The spacing between the stack and the beams or columns shall be no less than 0.3m ; The clearance between the stack and the wall shall be no less than 0.5m。

Warehouse platform:

Number of platform storage slots: takes into account the number of trucks and their dwell time.

N( Number of platforms) =TR (Number of stops per hour) X t( Docking time)

Platform height: shall be flush with the vehicle floor; the loading and unloading platform height shall be determined based on the floor height of the primary transport vehicles in the storage area, and it is recommended to adopt… 1m ~ 1.3m The width of the loading and unloading platform shall be designed based on the type of handling equipment, its turning radius, and the specific operational requirements; the platform width should preferably be no less than 4.5 m 。

Kumen:

The type of warehouse door should be selected based on local climatic conditions, the categories of stored goods, the frequency of inbound and outbound shipments, operational workflows and methods, fire‑safety requirements, and economic considerations. Industrial overhead doors and metal roller shutters are recommended. For widths greater than… 4m Ordinary roller shutters are not recommended for warehouse doors. Electrically operated overhead doors and roller shutters shall be equipped with manual operating controls as well.

The width of the warehouse door for forklift operations should not be less than 2.75m, The height should not be less than 3.5m The number of loading docks shall be determined based on the peak-hour throughput, and for every 10,000 square meters, the number of loading docks should preferably be no less than… 8 One. In accordance with future warehouse development needs, space for a warehouse door should be reserved to facilitate future modifications.

04 Calculate the area of the storage preparation zone.

The warehouse’s picking and preparation area comprises an inbound temporary storage zone and an outbound preparation zone. In the outbound preparation zone, items are picked from the inventory based on shipping orders. Once picking is complete, the quantities prepared in the preparation zone are verified; if accurate, the items are transferred to the shipping area for dispatch.

The size of the general storage area is determined by the warehouse’s average daily inbound and outbound volume.

05 Calculate the total area of the warehouse.

Pre-leased warehouse space = Pallet space (shelf) footprint + Channel width area + Storage area size

Ultimately, a precise value for the warehouse area can be determined. To further enhance accuracy, we should also conduct on-site measurements based on the aforementioned calculations. CAD Layout the warehouse on the drawings, delineate the corresponding functional zones, storage locations, and aisles, and adjust the actual warehouse footprint accordingly.