Space savings add up

The value of a new storage solution is most often measured in space savings and productivity gains throughout the warehouse or distribution center, but organizations often underestimate the financial advantages that come from implementing a better storage system. Freeing up storage space for revenue-generating activities is one way organizations are reaping such benefits, and others are finding they can expand or take on new product lines without costly real estate investments. These are especially welcome benefits as business picks up across most industries, organizations seek to meet demand for even faster fulfillment, and urbanization trends create the need for many companies to maximize existing space.

Such issues take on even greater meaning when you consider that most U.S. warehouses and DCs suffer from serious space constraints. Facilities in this country adequately utilize about 25 to 30 percent of their space, compared with 70 to 75 percent utilization in Europe and Asia, according to Todd Jessup, a principal with Charleston, S.C., storage solutions provider Flexspace. This makes it especially difficult for companies to meet today's demand to get more products out the door faster than ever before. Paying attention to how well your product is stored and how easily it can be accessed goes a long way toward meeting that goal.

"Everyone is trying to come up with that solution to get product to their customers faster than anybody else," explains Brian Neuwirth, vice president of sales and marketing for Lakewood, N.J.-based storage solutions maker Unex Manufacturing. "The greatest opportunity for us in the material handling world is coming up with unique outside-the-box solutions that help them do that."

Here's a look at some creative ways companies are solving space problems and putting more money to the bottom line.

About two years ago, Texas-based beer distributor Ben E. Keith Beverages embarked on a project to add more storage capacity at its Dallas warehouse. Using its existing three-pallet-high storage layout would have required adding 105,000 square feet to the Dallas facility's footprint—a costly undertaking in both construction and property usage. Management decided to investigate alternate storage solutions that would minimize property usage as well as future expenses.

After months of research, management at Ben E. Keith Beverages decided to implement an automated vertical storage solution. Operations teams reviewed several crane- and cart-based systems, and selected a cart-based system from Automha Americas of Oakville, Ontario. The solution handles 14,400 pallets—or well over a million cases of product—in 30,000 square feet, storing pallets on eight levels. This preserved more than 70,000 square feet of property for future growth, according to Paul Holton, the division's vice president of operations, and allowed the company to build a more affordable facility that still achieved its goals.

Ben E. Keith's new storage system moves pallets throughout a 92-foot-high warehouse by employing automated pallet movers that travel along a roller system. A series of elevators/lifters allow vertical access to eight storage levels, where pallets are stored in high-density racking. In addition to the building and property-value savings, the system has also yielded productivity improvements; for instance, the distributor was able to reassign employees to other tasks in the warehouse.

"Had we built conventional storage, additional employees and equipment would have been needed," Holton notes. "Going vertical and automating the storage has reduced shrinkage, damage, and travel time, and has created more accurate inventory and improved safety."

Holton says the improvements have set a new course for the facility's future.

"As additional storage is needed at this facility or any of the Ben E. Keith Beverage facilities, automating the storage will be the future," Holton says.

Space constraints, combined with the need to optimize resources, are boosting demand for mobile racking solutions in today's warehouses as well, adds Jessup of Flexspace, which offers mobile racking solutions through a partnership with European company Storax. Mobile storage racks are racking structures installed on powered bases that move laterally, pushing racks together in blocks and creating a single aisle, as needed, for access to products. These high-density storage solutions allow organizations to store more product per square foot while also providing unobstructed access to inventory. And they eliminate the need for multiple aisles that take up valuable space in a facility. The system can be fully or semi-automated.

"Mobile racking is the only solution that gives you 100 percent access to all product locations while also maximizing your footprint for storage," explains Jessup. "With the right storage system, you use your resources better—and you also create labor efficiencies and increase productivity."

Jessup illustrates his point with an example from the manufacturing sector. Smith Corona, the former typewriter manufacturer that now makes a wide range of thermal labels, was looking for a way to add production lines at its Cleveland, Ohio, factory and warehouse—but space was tight and expanding under existing conditions would require purchasing an additional building. Instead, the company implemented Storax mobile racking for storing materials and converted the resulting freed-up space into revenue-generating production lines. The end result was an additional four production lines, which translates to a 30-percent increase in productivity. The company is working on a second installation of mobile racking to create even more space, Jessup says.

Conserving space and improving productivity add up to savings, but labor may be the most important part of the equation. That's why helping customers put more money to the bottom line through labor savings is a key goal at Unex, says Neuwirth.

"Labor is one of the highest costs in a fulfillment center, so helping to reduce that—not just the amount of labor, but the time, and improving the efficiency of labor—is important," he explains.

Neuwirth points to the company's first-in/first-out (FIFO) shelving system as one product that can help organizations reach that goal. Especially suited to companies that deal with products that have expiration dates, such as pharmaceuticals or food and beverage items, the system ensures that the oldest products are used first. Tilted flow racks are loaded with the oldest products in front, and as workers pick products for an order, newer ones slide forward to replace them. Replenishment occurs from the back of the system. The system eliminates the need for workers to continually check expiration dates, saving them time in picking operations. The system's tilted design also allows for increased product visibility and easier access to products, resulting in more efficient picking and fewer mispicks. Neuwirth says the system also has ergonomic advantages that reduce bending and reaching, cutting down on work-related injuries and workers' compensation claims.

Cost reduction through productivity improvement is the name of the game—and the hallmark of today's most creative storage solutions.

"We're trying to have people work better for higher output," Neuwirth says.