The cost increase of warehouse space

We have seen e-commerce sales double over the last year due to pandemic circumstances. This has heightened the need for warehouse space. Industrial space availability has gone down and the cost of warehouse space has nearly doubled over the last five years.

Businesses can meet these challenges by either improving their own warehouse operations or subcontracting to a Third Party Logistics (3PL) organization. Either way, today’s warehouses require innovation to overcome cost increases and get more throughput in existing space.

If you plan to continue running your own warehouse, you will need to evaluate your existing operation to ensure it is up to its full capabilities. The way to combat the issues is through better space utilization and processing more orders per shift.

Better space utilization will require software specialized to handle all the intricacies of each part number. Key product data about the size, weight, packaging, etc. needs to be in a database that will determine proper put-away. When goods arrives, the warehouse staff needs direction on where they should put the product.

There also has to be a routine to allow for alterations should the product arrive not as expected or if the product will not fit in the desired location. Statistics in the software will factor into the optimum placement of goods and storage quantities.

The storage of goods is not just about where to put them, but how. You may need to separate bulk storage from goods that can be picked. Higher moving products should be at the shortest distance for pickers. The system may need to operate in a First In First Out (FIFO) method so placement of older goods must be more accessible than newer. There also may be a need to separate items as individual or in various case quantities.

How goods are stored will have an impact on picking. Faster picking, packing and shipping will result in greater throughput. Picks are organized in different ways for better efficiency, such as one picker to one-order, multiple pickers to one-order, one picker to multiple orders, or multiple pickers to multiple orders. Picks can be arranged by separating the responsibilities of each picker by tasks or by zone.

The best method depends on an analysis of each application. The path that each picker takes is key to their speed. The software needs to be setup to factor in the best path according to product placement. “What if?” scenarios need consideration for when a picker runs into challenges. The software needs to help avoid issues, but also needs to allow pickers to overcome them. Faster picking will increase output and allow for a reduction in staff or inventory.

3PL’s can expect to gain more customers because of the recent changes. In addition to the above, they need to find ways to deal with the uniqueness of each new potential account. 3PL’s need to tailor their processes of dealing with products and billing to each customer independently. This means different routines for warehouse staff, invoicing and information. It requires special settings in the software that allows for treating each customer unique and ensuring their needs are met. In addition, each customer requires the visibility of products and information through a web portal.

Improving your warehouse operation through software will allow you to increase output and reduce costs. User-friendly and flexible software can allow you to bring on more staff or increase shifts. Training staff is easier with prompts to follow, instructions and validations. A mid-range WMS can be perfect for meeting your needs to overcome the new challenges of warehousing today.


About ProVision WMS

ProVision WMS is a versatile solution which provides the tools to manage and co-ordinate warehouse operations. It improves order fulfilment, customer service, labor output and decision-making. This software, along with complementary technologies, will save you money and pay for itself in a short period. It has the flexibility to handle diverse applications requirements and help your business grow. To learn more about ProVision WMS solutions or how we can help to achieve all your business goals, request a demonstration today.