Warehouse Capacity

Warehouse capacity is a complex aspect of the supply chain that can be expressed in several different ways. It is therefore important to understand first what capacity is before determining how much available capacity you have and when it might be exceeded.

One crucial distinction is that between static (storage) capacity and dynamic (throughput) capacity, as outlined below:

Warehouse Static Capacity

‘Static capacity’ refers to the amount of storage available for goods at a standstill. A critical type of static storage is the forward pick or fast pick area, where the critical capacity measure is the number of stock keeping units (SKU’s) that may be stored there and be available for picking. This is supported by the reserve stock area, which must have the required capacity available to replenish the forward picking area.

Overall, there must be enough capacity for stock in the facility to meet required customer service levels. The amount of product required will normally be determined by inventory planning and replenishment software, which will calculate two types of stock requirement:

• Cycle stock – stock required to meet expected demand until the next receipt of stock from the supplier or replenishing warehouse
•  Safety stock – buffer stock to allow for spikes in demand outside normally predicted parameters.

Another key consideration is the type of static storage required for each type of product. Examples include:

• Block stack floor area - for high volume product stores on pallets and potentially picked in pallets from the same area
• Adjustable pallet racking – general purpose storage for palletised freestanding products or cases of product at variable pallet heights
• Shelving – small, inexpensive products picked at ground or mezzanine levels
• Flow rack – used to create dense pick faces with replenishment separated from the pick area
• ASRS – automated storage and retrieval system for relatively high value products where space is at a premium.

Parking space for freight vehicles is also a form of static capacity, and must be calculated across daily and weekly cycles. The needs of Freight vehicle parking mean that operations should be considered by time slot, types of activity, trunk timetables and shift patterns across the relevant periods. Yard space can easily prove to be the factor that most limits the capacity of a facility.

The most important point is that products must be clearly grouped by the type of storage required. This will allow you to determine the right combination of static storage requirements within a warehouse. LogiMap’s powerful management tools help simplify this process, allowing warehouse capacity to be modelled and optimised with ease.

Warehouse Dynamic Capacity

‘Dynamic capacity’ refers to the amount of throughput that a facility can handle, which includes shipment lines, picks and cases. Both dynamic and static capacity is driven by the collective demand from customers and the downstream warehouses that the facility serves. The type of dynamic capacity you need is therefore dependent on the mix of work required by this demand.

For example, total demand could be determined by the number of cases demanded on each day of the week over a typical period. Yet each of those cases could represent a very different amount of work:

• Full pallet picks – bulk customers and downstream warehouses may require replenishing with full pallets of cases that will be picked by fork trucks
• Case picks – this type of demand might be fulfilled using manual, semi-automated or fully automated picking methods
• Item picks – an order for individual products or mixed cases will be very labour intensive.

The overall picking process may also involve more than one approach, as in the case of bulk pick and secondary order assembly versus direct order picking. On top of this, processes can vary according to the particular profile of orders from customers and warehouses.

Managing dynamic capacity can clearly be a complex business. That’s why many clients see our LogiMap software as an invaluable tool. By combining deep understanding of network dynamics and product mix, LogiMap can generate dynamic workload and capacity plans for major supply chain facilities.

For a more detailed discussion of LogiMap’s potential impact on your warehouse capacity management, visit the Warehouse Scheduling page.