Ask Rick

Freeing Up Space

Rick,
I need to free up some space in my warehouse to make way for some new product we will begin to distribute later this year. Based on your experience and what you have seen others do, do you have any tips or suggestions that might help free up the space?

Casey, VP Operations, Houston TX

Rick's Answer

Casey,
For most distributors available warehouse space is one of the key resources to be managed. The introduction of new product lines and general growth in the business are certainly significant factors that can place additional strain and pressure on available warehouse space. Some things I suggest you look at include slow moving/dead/inactive stock, aged/end-of-life/expiring product, overstock items, slotting and reclaiming warehouse space. Here are some suggestions on how you might go about evaluating each of these areas.

• Out with the “old” in with the “new.”  Take a close look at your inventory to identify slow moving items as well as dead or inactive stock.
• Examine your inventory for aged product--particularly product that may be nearing end of life or expiration.
• Look for overstocked items that may have occurred for numerous reasons including inventory left from a promotion, seasonality, change in movement, an inventory error or maybe over forecasted and purchased.
• Based on what you find this can be a great opportunity to free up space. Options you may want to consider in freeing up the space include: check with the vendor to see if you have options to return the stock or if the vendor may assist with pricing or promotions in some way; some type of special pricing, promotion or giveaway; employee program where you give the employees the opportunity to purchase at deep discounts or maybe as rewards; warehouse sales event, like a garage or tent sale where you advertise and sell directly to the public at discounted prices; open the product up for bids by using one of the nationally recognized online web services; through donations to local or nationally recognized non-profit organizations.
• A slotting exercise where you look for misplaced product throughout the warehouse that may be taking up more space than it should, or more space in a particular part of the warehouse. Some of the things to look for would include:
• Loose product (each/case) taking up locations possibly in the wrong area of the warehouse;
• Oversized locations where the allocated space is more than is needed;
• Fragmented storage could present consolidation opportunities to pull inventory back together and use less space; product that is 'out of place' based on your warehouse design and layout.
• Additionally, if you need to free up space in particular areas of the warehouse some things to look for and consider would include:
• Existing products in the wrong types of locations based on movement, storage type, or zone classification;
• Examine the amount of space allocated to products in these areas to see if you can reclaim space and potentially add locations.
• Look for opportunities to reclaim space in the warehouse that are currently used to store ‘things’ other than the product you are distributing. Files, office supplies and other materials often find a home in the warehouse. When space is available that is ok, but when things get tight it is time to consider reclaiming that space.

Depending on the current state of your exiting warehouse area, you may be surprised at the amount of space you are able to free up from looking at some or all of these options. If you have a warehouse management system you should be able to easily identify the opportunities for improvement in each of these areas. Also, a good warehouse management system can also help proactively manage these things for you as product moves through the warehouse and the characteristics of items change. Thanks for your question.

Rick Register, industry veteran and President & COO of Cambar Solutions, welcomes your questions.

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