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Maximize Your Warehouse

July 17, 2019

by Stephen Gibson

Don't forget the small guy

Most people assume only the large, complex manufacturers can justify the use of an Industrial Systems Engineer (ISE).  One small start-up company in the Nashville, Tennessee area was investigating the lease of a second building, but an assessment and quick redesign of their warehouse avoided what would have been a monthly sunk cost.

The company was based in a 10,000 square foot facility and believed there was a need to add approximately 2,500 to 5,000 square feet. The smallest space they could locate was 5,000 square feet. Our industrial systems engineer was able to perform an assessment along with a redesign of the layout to eliminate this need. Many warehouses are an afterthought in the design process. They are looked upon as a simple storage area for incoming and outgoing product. Unfortunately, this can become a huge source of waste for businesses. Wasted square footage and excess inventory are just two examples of waste - not to mention other costs like material handling equipment and labor.  While this business did not have a huge inventory issue, they did have a layout issue with wasted square footage. 

Warehousing in your office space?

The company had been outsourcing some of the assemblies of their product along with the packaging. At times of high demand, they would even utilize some of the office space to accommodate packaging. The business was growing and looking to add a small prototype processing area as well. The thought was to lease a 5,000 square foot facility in order to relocate the current warehousing and assembly, then, utilize the open space for a prototype lab. One of the pitfalls was that the additional cost burden of the lease would be a sunk cost. No matter what happened with the business, this cost would remain. Also, about 50% of the added square footage would be wasted space initially. Our Industrial Systems Engineer reviewed the current footprint along with the necessary storage of inventory, both raw and finished goods. Within a week, a new footprint was designed using available racking. Aisleways were eliminated and reduced freeing valuable square footage for use. The new design included a footprint for the prototype area which was much smaller than originally planned but still addressed the full needs for the lab. The net result was a 45% improvement in usable square footage eliminating the need to expand into another building. This is just an example of how a well-engineered space can result in significant cost avoidance.

This is another example of how Industrial Systems Engineers can facilitate improvements. Having an ISE review expansion and equipment plans in addition to current processes can lead to significant improvements and even cost avoidance.