How to Maximize Warehouse Space Utilization

How to Maximize Warehouse Space Utilization

Business is booming, you’re getting a lot of sales, inventory moves quickly, but you’re running out of space in warehouse. What should you do next? As previously discussed, the best way to fix this issue would be to rent/get another warehouse. But that can be too expensive sometimes, or you just don’t want the hassle of managing two warehouses at the same time.


What other options do you have? Well, the second best option would be to better optimize the space inside your warehouse. Here a few tips to take into consideration:

  1. Evaluate Whether You Can Extend Your Racks Up Vertically

Extending racks up is usually the easiest way to create more space. Typically, new buildings have ESFR which is a fire suppression sprinkler system, and you can store inventory within 45cm of that area. There are some pitfalls of rack extension – the racking uprights or base plates may not be sized properly. In that case, a structural engineer and a PE can confirm that rack extension is a viable option.

  1. Reduce Aisle Width in the Racking Area

A wide aisle can range from 3 to 4 meters, but if that can be reduced in order to save space. The minimum lowest you should be considering is about two meters wide.

When considering this option, lift equipment must be evaluated. Is the equipment capable of following or working in those narrow aisles? There is also the added expense of wire guidance in a very narrow aisle situation.

  1. Evaluate and Change Your Storage Medium


Another option is to change the storage medium to higher density equipment, moving from a single-deep rack to a double-deep rack for example.

  1. Adding a mezzanine

One of the best ways to increase space is to add a mezzanine. Installing a mezzanine above a floor-level process, like a shipping or receiving area, can nearly double floor space.

Of course, there are downsides with a mezzanine as well. The floor loading must be able to handle it. There will be columns and base plates that now drop down to the floor that could be in the way of the process that’s below it. But it is much better to add a mezzanine, if possible, than to expand the building.

A double-deep rack requires a reach truck to load pallets. Push-back or drive-in racks are also higher density equipment alternatives. These options are great for adding storage, but the problem becomes FIFO: first in, first out. Higher density limits accessibility to the first-in pallets.

  1. Adding half-pallet locations

Adding half-pallet locations can save space since some product comes in only a half-pallet quantity. We see that as fluid volume as opposed to just what’s in that area.

There is no reason why half-pallets would take up the space of an entire pallet. That’s literally 50% space wasted, we don’t want that!

  1. Use Off-Site Location for Overstock

If you store a large quantity of excess inventory for a few items, consider some type of offsite storage for the excess, thus freeing up space for supporting the fulfillment operation.

  1. Leverage Your Warehouse Management System for Directed Put-Away.


Directed put-away is a great way of creating or saving space in a warehouse as well. It’s usually directed by your warehouse management system where instead of the put-away rules being just “put the pallet wherever you want”, directed put-away knows what locations are best suited for pallets. It tells you where to put a certain pallet as opposed to letting a worker put it in the most convenient location.

  1. Use Underutilized Space

Use space you never thought you had before. There’s often space above receiving or shipping doors where pallet racks full of supplies, slow-moving materials, or staging for inbound or outbound product that hasn’t yet been processed can be placed.

If there is a pick module in the facility and a conveyor down the center of the module, hang a shelf above the conveyor. It’s an easy way to increase locations for smaller or slower-moving items that don’t need replenished as frequently. Those products will need to be replenished by hand or by the conveyor system.

  1. Store Product in Trailers for Short-Term, Seasonal Needs

Finally, storing products in trailers is a seemingly crazy but sometimes necessary solution to temporary storage needs. Many warehouses will bring in extra trailers and pay the demurrage charge for temporary storage without a building expansion. This is frequent for seasonal product, especially among retailers.

To sum up


Keep in mind that warehouse space often represents 15% to 20% of the cost per order. Moving to new space is expensive and takes a lot of time. Make sure you have assigned someone responsible for your ongoing planning and warehouse space utilization analysis process.

Our recommendation would be to constantly adjusting and optimizing your warehouse space. This is the best way to make the most out of your warehouse and its available space.