Logistics & Materials Handling Blog

Warehouse Racking Guide – Introduction: Part 1

by Paul Hinz
Filed under: Warehousing

Don’t set up your aisles or racking layout prior to talking to a forklift provider on what you want to achieve, it can avoid a lot of heart ache. Racking layouts should always be based around the type of equipment you need not the other way around.

Looking to upgrade or build a new warehouse racking? This guide covers the basic terms and terminology you will come across when looking for new racking solutions.

We will provide you with an unbiased guide on the types of racking solutions available and what application they best suit; from high density to the most basic selective packaging.

Below is a list of some key points that you should consider when determining what racking selection best suits your needs.

S1.6(350px) blog

Warehouse/Racking: Costs Per Square Metre

Firstly, calculate your cost per square metre of warehousing by finding actual warehouse storage size & total land value cost per square metre. Next you should estimate the cost per square meter of racking. A racking company should be able to provide this for you; get quotes for each different type of racking. (Refer to Part 2-6 for more information on different racking types)

Don’t forget to factor in the cost of relocation; moving warehouses can be extremely costly & very time consuming. Try to include factors such as lost production time; worker dissatisfaction; labour cost requirements to move such as IT costs (moving servers; moving IT infrastructure) & logistic costs of moving large inventories of stock.

Overall Industry analysis

You should also look at the type of overall industry environment; understanding your industry life cycle and overall position will enable you to choose the right racking and warehouse layout for your organisation. Are you in a stabile industry? Or a rapid growth industry? (e.g. Technology or innovation industries requires flexibility; compared to the more stable Food and Packing industries; that require high volumes). Understanding your industry life cycle will help forecast your racking space requirements.

Internal Analysis (Using Historical data)

Once you have looked at your overall industry trends; you should look at your historical data. It’s important that forecasting is conducted to help predict your expected sales in the next 5-10 years. If you over or under-invest in land, equipment or racking you could have some major unexpected costs in the future.

Product Range / Stock Keeping Units

The volume of storage pallets required & the amount of different Stock keeping units (How many different types of products do you stock); are two of the most important factors when selecting your racking and warehouse layout. As a general guide line, if storage requirements are greater than 3000 Pallets; it’s normally more cost effective to select a higher volume racking solution.

Next calculate how many different stock keeping units (SKU’s) you currently stock. Is this likely to expand or decrease? A detailed analysis of your Product Life Cycle (PLC) should be conducted to provide forecasting of estimated demand for each products required storage. General products fall into 1 of 4 categories: Introduction, Growth, Maturity & Decline. In terms of SKU’s 1-20 is normally considered a low variation of SKU; while 20+ is considered higher; requiring greater pallet accessibility.

How much does each SKU weigh? Ensure you purchase racking that has appropriate bearing capacity for your needs.

Capital Equipment Requirements (Forklifts/Order Pickers)

We’re Materials Handling experts so please contact us if you require more information on Forklifts or Order Pickers. We can help you choose equipment that will maximise your handling productivity.