Can Software Help Maximize Warehouse Space?

Warehouse space optimization plays a huge role in an organization’s ability to operate effectively in the supply chain. However, warehouse space optimization can be challenging, especially as inventory-based businesses today strive to meet growing demands while minimizing excessive costs. While warehouse space structure has been relevant in the supply chain for decades, there are innovative new solutions, which are available thanks to the intersection of technology and warehouse logistics.

But the question is: can software help maximize warehouse space, and if so, how?

Here’s everything you need to know about the state of warehouse space management today, including how sophisticated (yet simple) software solutions can help you enhance space utilization and increase operational efficiency.

The Current State of Warehouse Space Management

Warehouse space is a popular topic in the industry, for two significant reasons: the amount of available space is shrinking, while the cost of space is rising. Data shows that in the past few years, the “share of ready-to-occupy logistics space” in the US has “decreased substantially.” At the same time, both warehouse rental prices and total warehouse costs are spiking.

For inventory-based businesses in the supply chain, this means that optimizing warehouse space should be a priority because it can lead to big savings on unnecessary costs.

But it’s not just about price: warehouse space optimization can also lead to a better consumer experience. Traditional, manual warehouse space management systems are labor intensive, prone to human errors, and inefficient in today’s digital-first warehouse ecosystem. Mismanagement of warehouse space can then lead to delays and mistakes for customers, which can then negatively impact the customer experience.

Instead of using rudimentary methods for managing warehouse space, decision-makers can turn to advanced software, which is reshaping how warehouses operate.

Common Issues in Space Utilization

Let’s say you’re not using software to maximize your warehouse space. What can happen?

Here are some of the challenges that inventory-based businesses can face when it comes to ineffective warehouse space utilization:

• Inefficient layouts: If space isn’t properly utilized, it can result in wasted space and inefficient workflows. For example, poorly organized storage areas can lead to congestion, prohibiting the smooth flow of goods.
• Limited visibility: Traditional manual tracking systems often lack real-time visibility into inventory levels and space utilization. This lack of transparency can lead to overstocking or stockouts, negatively impacting the customer experience.
• Lack of resilience: Warehouses need to be prepared to handle dynamic scenarios, from supply chain shortages to seasonal fluctuation. Without proper space management, a business might be slow to adapt to varying inventory level needs.
• Inadequate reporting: A lack of accurate warehouse monitoring and data can throttle reporting capabilities, making it challenging for decision-makers to analyze data, identify trends, accurately forecast needs, and make informed decisions for space optimization.

How Software Can Help Your Warehouse

What is the difference that software can make when it comes to warehouse space? This software can help you accurately track inventory, make strategic storage decisions, and use your space as effectively as possible. For example, data shows us that when companies use integrated order processing for their inventory, they can experience a 20% gain in space usage (as well as boosts in stock use efficiency and productivity).

Here are just some of the ways that software can be a game-changer when it comes to the physical logistics of your warehouse.

1. Real-time visibility: Today’s advanced warehouse management software gives you real-time visibility into things such as inventory levels, order statuses, and space utilization. This transparency allows warehouse managers to make informed decisions about space quickly.
2. Streamlined order fulfillment: Software can help streamline the order fulfillment process, optimizing the picking and packing of items. These intelligent solutions can help ensure that space is well-used, make sure inventory is easy to find, and ensure that deliveries are error-free, which puts less strain on the logistics of your warehouse.
3. Accurate ordering: When you’re using warehouse software, you’ll have access to demand forecasts and analysis, which can help decision-makers order inventory as accurately as possible. These algorithms even consider unusual circumstances (such as sales, seasonality, and natural disasters), allowing you to maximize space utilization in your warehouse. This also helps you avoid situations of overstocking, which can strain warehouse space, and lead to excessive holding costs.
4. Automation and efficiency: Warehouse software solutions automate different aspects of your operations, such as order processing, inventory tracking, and replenishment. This automation can help ensure optimal space utilization, while also reducing manual errors.
5. Inventory balancing: Certain software also includes inventory balancing features. For example, StockIQ monitors the state of inventory in your warehouses, and if things get out of balance, will suggest grouped transfers to help you efficiently rebalance your inventory.
6. Scalability: Manual inventory space solutions might work on a smaller scale, but they can quickly become inadequate at scale. Warehouse management software is designed to scale with the growing needs of your business, and these solutions allow you to continuously optimize your space, even as you expand.

Best Practices for Utilizing Warehouse Software for Space Management

Warehouse software is not a silver bullet: you need to know how to use it to properly optimize your warehouse space. With that in mind, here are some best practices for utilizing warehouse software for space management.

1. Choose software that can impact your warehouse space

Not all warehouse software is created equal, and not all warehouse software can help you with the physical logistics of your warehouse space. If you’re looking to continuously improve the way you manage space in your warehouse, be sure to select a software solution that has the features you’re looking for. For example, replenishment planning features can help you optimize your inventory management processes, while advanced demand forecasting can allow you to accurately predict how much inventory to order, and when.

2. Monitor your warehouse performance

To determine if you’re utilizing warehouse space properly, you should set goals and determine key performance indicators (KPIs) that determine success. Metrics such as inventory accuracy, carrying costs, backorder rate, and customer satisfaction can all reflect how efficiently your warehouse is operating and can indicate where improvements should be made.

3. Leverage inventory analytics

The more data you collect and use in your warehouse, the more informed your decisions can be. For example, using inventory analytics will give you advanced insights into situations such as stockouts, excess, dead inventory, inventory expiration, and backorders. When you have that information, you can navigate your warehouse space accordingly.

4. Take supplier performance into account

Your warehouse space isn’t only impacted by what’s happening inside your warehouse: it’s also impacted by suppliers. If a supplier with a large order is consistently late, for example, you still need to allocate space appropriately and be prepared for this scenario. Choosing a warehouse software solution that includes supplier performance management tools can allow you to carefully calculate how space should be allocated and organized in your warehouse.

Your warehouse space ultimately plays a large role in the way your inventory-based business operates. By using advanced warehouse software you can design your warehouse in the most effective way possible, allowing you to maximize your business while providing customers with a high caliber of service.

Seamlessly Navigate Warehouse Space with StockIQ

Your warehouse space shouldn’t be holding you back: instead, it should support the quality and velocity of your business. If you’re ready to overhaul the way you navigate your warehouse, we’re here to help.

StockIQ is a comprehensive supply chain planning suite that gives you full visibility into your operations. With accurate forecasts, inventory visibility, supplier tracking, and replenishment tools, you’ll have all of the data you need to make smart decisions for your warehouse space.

Contact us today to get started with StockIQ.