Renting warehouse space can be extremely expensive for companies and everyday people alike. The costs associated with land, building, machinery, labor and tools or other items that would need to be stored in a rental warehouse space can be astronomical if not utilized correctly. Many companies seeking to maximize the usage of space mostly try to streamline the process by the placement of goods, time goods are stored in the leased or rented warehouse space and utilizing automation to cut labor costs, while improving accuracy.
Companies also try to utilize their space wisely, which leads to lower overhead because there is more room for storage. So how can you save money when using a leased or rented warehouse space?
Improving Warehouse Space for Rent or Lease Anywhere
Renting or leasing too much warehouse space may not always be a good business practice. A large warehouse allows a company to store a lot of items, but if the space is utilized correctly, you may not need all of the space and then you wind up having lots of left over space that you’re paying for, but don’t need. Additionally, having lots of ware house space means that your staff may not need to take the utilization of space so serious. This can cause a lot of issues with unnecessary travel times and loading schedules. When it’s time to balance the budget, you may realize you’re paying more for space and labor costs.
When a company analyzes their cubic feet, column spacing, ceiling height, and other elements of their potentially leased or rented space, they will tend to get creative in their planning of space utilization. This leads to the maximization of efficiency and loading and unloading improvements. All of this saves on overhead in the long run.
One of the many areas often overlooked when warehouse space is too big, is ensuring the warehouse space has consistency with items being stored. For example, if a container being stored is 4 feet by 4 feet, then the area where it is stored should be the same size with minimal room around it. If the rack of the storage location within the warehouse is 8 feet by 8 feet, then there may be too much empty space left over leaving your storage plans less then efficient.
Evaluating what the average size of containers you’ll be storing are prior to renting or leasing warehouse space, you can plan accordingly. If you don’t look into this prior to renting or leasing a warehouse then your company will be paying to store air, which last time we checked isn’t the most efficient way to do business.
One of the other areas that can maximize space utilization is the storage bins themselves. It’s common for a company to need to store one of their tools or other items and they store a 2×2 foot item in a 4×4 container, which leads to the bin taking up unnecessary space. Many companies do not utilize a a practice of having various size containers and stick with a one-size-fits-all approach, which can lead to unnecessary overhead. Putting smaller items into bigger bins may make items appear to have good space utilization, but there will be a lot of space in the bins not utilized leading to higher costs for storage.
Good space utilization can lead to better inventory tracking, which also makes the items stored easier to find. Some warehouses with limited space can attempt to cram as much as they can into a corner or shelf, which they may believe is a better utilization of space, but can be detrimental to the inventory tracking as some things get berried they get harder to find once larger items are placed on top or in front of smaller items.
This practice will without a doubt slow picking and delivery times as well as loading and unloading. In some cases, this can lower customer satisfaction, depending on what you’re storing.
When a company does a space utilization review, they often find that they do not need as large a warehouse as they have. Once you have a lease on the warehouse space, it may be too late. Depending on the budget of the company, it can also lead to less float money for the budget and decrease productivity. Many companies look towards renting unnecessary space to other companies, or compiling other company items into the space or using the space for manufacturing more products.
When analyzing your warehouse space needs
- Measure your items average size
- Compare that against the cubic feet of your potentially rented or leased warehouse space.
- Make sure your storage bins are adaptable to your size needs