Storage Challenges And Optimization Solutions in E-commerce

With the booming development of e-commerce, people are eagerly accepting this unprecedented growth, and the challenges of warehousing and distribution business that come with it are becoming increasingly prominent. The profit margin of products in the e-commerce field is already meager, the shortage of labor resources is becoming increasingly severe, storage space is particularly precious, and construction costs are approaching historical highs. In this context, e-commerce operators and warehouse managers are more urgent than ever in reducing the cost per pallet.

How to deal with it? From a theoretical perspective, the key lies in how to stack more pallets within a certain area. If building expansion is not an option, then seeking to utilize undeveloped upper level space may be the most profitable choice. This usually means either adding a layer of shelves for "vertical expansion" or "internal optimization" by constructing a very narrow aisle (VNA) layout. Both are effective strategies for increasing slot space; But before taking the above measures, it is worth investing time to ensure that the existing processes and workflows match your needs.

The current storage and e-commerce processes need to be optimized

If the goal i to reduce the storage cost per pallet, updating the infrastructure of the facility and introducing equipment with additional features may become a component of the solution. However, a good start is to optimize current processes and workflows through lean management techniques to minimize costs.

Lean management is based on the concept of continuously improving efficiency, which believes that even small improvements can have a profound impact on overall productivity and profitability. This method can help you minimize costs to the greatest extent possible, including identifying and eliminating ineffective tasks, shortening delivery cycles, reducing equipment downtime, and improving product quality.

The practice of lean management begins with visualizing existing processes and facilities, and focuses on collecting detailed information about operations, labor, and workflows.

The next step is to identify and eliminate the non value adding process in the operation. Enterprises should train and authorize employees to participate in this process: identify inefficient areas; Clarify the value-added and non value-added parts in the process; Provide suggestions and implementation plans for improving daily tasks.

Once you have identified the value-added and non value-added steps, you can start setting key performance indicators, deploying standardized workflows, while improving security, efficiency, and processing capacity, and reducing waste. In this way, you can also better understand the benefits that can be achieved by increasing the number of slots, as well as which devices may be needed to fully utilize this space.

Optimize the storage locations and storage space in existing facilities

There are various storage strategies, including random storage, speed based storage, etc. - each strategy has its effectiveness in specific facilities, storage properties, equipment types, and labor conditions. But regardless of the strategy, the goal remains the same: maximizing space utilization, eliminating bottlenecks, reducing travel and picking time, improving labor efficiency, and ultimately reducing storage costs per pallet.

For managers of existing facilities, optimizing storage options may be limited by building structures such as ceiling height and available area. However, it is worth considering whether the real limiting factor is the scale of the facility or the capability of the existing equipment? In other words, if using higher capacity material handling equipment is part of the solution, can slots be added to existing facilities?

For example, high-capacity equipment allows operators to fully utilize larger capacity, which can add a whole new layer of shelf space. This type of device is also suitable for a random storage strategy, which is effective for e-commerce and other operational scenarios where SKUs are constantly added or deleted. ABC storage is implemented to store slow-moving and heavy items at high places, freeing up more easily accessible locations for high demand goods and reducing travel, restocking, and order completion time.

In addition, VNA devices can not only be used independently of high-capacity devices, but can also be used in conjunction with them to create more storage space by reducing channel width, thereby benefiting existing facility owners and operators.

Design the lowest cost new facility

For companies considering building new warehousing and distribution facilities, design choices to maximize cargo space are not so limited. If the goal is to minimize the cost per pallet and per square foot, then there is clearly a better direction to follow - expanding upwards!

Taking a standard facility as an example: an area of 80000 square feet with a 32 foot high ceiling. Assuming six shelves are used, the facility can store 14784 standard sized pallets.

However, if the ceiling height clearance reaches 50 feet and ten layers of shelves are used, the same number of pallets can be stored in less than half of the original facility area -45000 square feet. This not only means a reduction in land area, which may lower overall construction costs, but also shortens the distance personnel and equipment need to move within the facility, ultimately reducing the storage cost per pallet.

Ultimately, what you need is not just a partner with expertise in equipment; What you need is a true internal logistics solution provider. EQS can assist you in reallocating space, designing facilities, and adjusting processes. Next, we will assist you in building a team that can lift heavier goods, reach higher points, and move more efficiently, allowing you to fully tap into the potential of every square foot.