Rethinking Warehouse Layouts and Using Compact Equipment to Improve Efficiency

By Tim O’Connor

One of the most exciting advancements to hit warehousing in recent years has been automatic vertical storage systems. By combining elevators, carousels, rollers, and picking technologies, automatic vertical storage can help warehouses and distribution centers maximize their capacity by allowing for taller racking and faster retrieval. But are they right for foodservice equipment dealers and distributors? A pair of inventory management experts believe there are alternatives that would better cater to the industry’s specific needs.

“Vertical storage has always been around from pallets racks onwards,” said Jon Schreibfeder, president of Effective Inventory Management, a consulting firm. “Whenever we look at automated solutions, we look at several factors.” Essentially, it comes down to the cost of the solution versus the anticipated savings. Is it cheaper to put in new technology, build an additional warehouse, increasing the existing warehouse space, or hire more workers? As far as automated vertical solutions, Schreibfeder says the math often doesn’t work out for foodservice equipment distributors and dealers because those systems are geared toward products that can be palletized. “In [the foodservice equipment] industry, I haven’t seen automation behind just pallet racks,” Schreibfeder noted. “The savings just haven’t been there.”

Although vertical automated picking solutions won’t work for most foodservice equipment distributors, there are other ways distributors can maximize their space. “The biggest problem I see in [the foodservice equipment] industry is people don’t lay out their warehouses effectively,” Schreibfeder said.

Solutions can be as straightforward as migrating slow-moving inventory to the least accessible locations of a warehouse, such as the back of the facility or a high shelf, so that better selling equipment can be placed closer to the dispatch location, reducing the time it takes to pick and prepare for transport. In the foodservice equipment industry, only 10-13 percent of item account for about 80 percent of warehouse activity, so placing those higher-moving products in more convenient locations can make a major difference in productivity. Schreibfeder’s clients typically see a 30 percent increase in the number of picks per hour after moving to a ranked-base storage system. “You always can improve operations at virtually no cost with proper placement of items,” he said.

Optimizing layout is the first step of maximizing existing storage capacity, but businesses also should consider how technology can help them reach their goals. Jason Bader, managing partner of The Distribution Team, a company specializing in inventory management, said companies can start by rethinking how equipment impacts space. Instead of just trying to go taller, warehouses can make equipment changes to get tighter. The traditional warehouse is laid out with 10- or 12-foot aisles to accommodate the turning radius of a forklift. However, Bader pointed out that switching to a narrow aisle forklift or a cherry picker can allow for aisles as thin as 5 feet, enabling companies to pack more racks in the same footprint.

Aside from being more practical, this lower impact approach also can save considerable money. An automated vertical storage system can cost a quarter-million dollars or more while a good cherry picker forklift runs about $20,000, Bader said.

Another technology that interests Bader is tilted flow racks, a first-in/first-out shelving system that loads older products in the front so they are picked first. Newer items then slide forward to replace the products that have been picked. Although flow racks are more commonly used for products with an expiration date, such as grocery store milk, they can still be a good fit for distributors that deal in equipment that changes every model year. By using a flow rack, they can ensure the older models are sold off first and more easily make room to bring in the newer equipment.

Bader suggests FEDA members spend time with a material handling equipment distributor to learn about the options and technology advancements that can help them maximize their space. “A lot of this is allowing yourself to think differently about the equipment you are investing in your warehouse,” he said. “I challenge people to start looking at other places around the industrial areas they occupy. Just go see what else is out there. There are a lot of really cool, different approaches.”