In the bustling world of warehouses, storage space is precious. When you maximise this asset, your facility will be able to hold considerably more inventory.
This not only slashes transportation and logistical costs but also boosts order fulfilment efficiency. With products more accessible, staff can pick, pack, and dispatch orders at lightning speed, so that customers receive their goods sooner.
That’s why it’s so important to measure and maximise available space, turning every square metre into a powerhouse of productivity and profit.
But how do you determine a warehouse’s storage capacity?
And what is the right amount of space to accommodate growth without spending more than necessary?
Here’s how to calculate warehouse storage capacity. Keep reading to learn why this step is crucial, which numbers to crunch and how to use your facility most effectively.
What is warehouse capacity?
Warehouse capacity is the total amount of space available for keeping goods and materials in the facility. This includes not just storage areas, but also spaces for preparing inventory and fulfilling orders. To calculate warehouse capacity, you’ll need to consider a few key factors:
- The weight and size of your inventory
- The amount of inventory needed to meet demand
- The space required for staff to efficiently find and process orders
Knowing your warehouse capacity is essential for making the most of your space and keeping operational costs low. It helps you figure out how much inventory you can store to meet customer demand without risking backorders or stockouts.
If you’re not using all the space your warehouse offers, you’re missing out on potential profits. On the other hand, having more space than you need can make storing and managing inventory more expensive than it needs to be, from extra rent to dead stock.
The key takeaway?
By understanding and optimising your warehouse capacity, you can turn every corner of your warehouse into an asset, boosting both efficiency and profitability.
How to calculate warehouse storage capacity
You’ll need to know how to calculate the storage capacity of your warehouse if you want to optimise it. Here’s a simple way to work out this key figure using square footage:
1. Determine warehouse dimensions
Measure the total square footage of your entire warehouse by multiplying its length by its width.
For instance, let’s say the size of your warehouse is 100,000 sq. ft.
2. Subtract unusable space
Using the same method, work out the total amount of space used for non-storage purposes, such as offices, restrooms, break rooms, and loading areas.
Then subtract this number from the total square footage to confirm your usable storage space:
Usable storage space = total sq. ft. – non-storage space sq. ft.
For our example, this equals:
100,000 sq. ft. – 20,000 sq. ft. = 80,000 sq. ft.
3. Measure stack height
Next, confirm the distance from the floor to the lowest overhead object, like racks or lighting fixtures. This usable storage height impacts how high you can stack products.
In this example, let’s imagine the clear height is 25 ft.
4. Calculate your total storage capacity in cubic feet
Multiply the usable square footage by the clear height to find your total storage capacity:
Storage capacity = usable storage space in sq. ft. x clear height in ft.
For example, 80,000 sq. ft. multiplied by 25 ft is 2,000,000 cubic feet.
5. Get the utilisation rate
Divide the total storage capacity by your target warehouse utilisation rate.
For instance, if you use a utilisation rate of 25%, divide 2,000,000 cubic feet by 25%.
This gives you 500,000 cubic feet.
6. Consider limiting factors
Once you have your warehouse storage capacity, it’s time to consider some limiting factors. More specifically, the weight capacity of the floor and the load capacity of your racks.
If you’re going to store heavy items in your warehouse, make sure the floor and building structure can handle the weight. The floor’s weight capacity, or the maximum weight it can support, is a crucial factor to consider.
Additionally, evaluate the rack storage capacity by multiplying the number of racks by the load each rack can bear. Base this calculation on the type of shelves and the weight they can hold.
While this is a general guide on how to calculate warehouse capacity, remember that every business has unique needs. So, it’s crucial to adjust these formulas to match the specific characteristics of your warehouse and the goods it stores.
What is the ideal warehouse space utilisation?
Warehouse space utilisation is all about making the most of your storage area. It’s the ratio of the space you’re using to the total available space.
To find out your current utilisation, you’ll need to do a bit of maths:
- Measure the footprint of all your pallet racks.
- Calculate the total vertical storage capacity of those racks.
- Multiply the capacity of each pallet rack by the number of racks in your warehouse.
This will give you the total storage volume of your warehouse.
For instance, if you calculate a total storage volume of 250,000 cubic units and your warehouse’s capacity is 1,000,000 cubic units, your utilisation rate is 25%.
That’s a pretty healthy rate.
If your utilisation rate is below 22% or above 27%, it might indicate some issues. Under 22% means you’re not using your space effectively, while over 27% could mean your warehouse is too cramped, making it hard for staff to move around and increasing labour costs.
A 100% filled warehouse has no buffer for unexpected changes in demand or inventory. Plus, it can lead to operational headaches, with no space for staging materials, which makes organising and sorting a nightmare.
Keeping some open space in your warehouse isn’t just about flexibility—it’s also about safety. Less clutter means fewer accidents and more room for staff to work efficiently.
Ultimately, the ideal utilisation rate depends on your specific needs, including the nature of your inventory, how it stacks, expiration dates, and the volume of products.
Tailoring your space utilisation to these factors will help you maintain a well-organised and efficient warehouse.
How to maximise warehouse capacity
Now that you know how to calculate the storage capacity of your warehouse, you can start focusing on optimising it. Making a few minor adjustments here and there can significantly increase utilisation, resulting in both time and cost savings.
Here are the steps you can take to maximise warehouse capacity:
Choose the optimal storage system
Selecting the right storage systems is essential for maximising warehouse capacity and enhancing operational efficiency. Opt for solutions that align with the shape and layout of your space, as well as the products being stored.
Pallet racks are one of the most popular storage-enhancing solutions. These vertical systems utilise the full height of your warehouse, organising inventory pallets with unparalleled space efficiency.
Plus, they can be customised to fulfil your unique warehouse needs.
For example, “double-deep” pallet racks place one pallet directly in front of another to maximise the use of available space. Additionally, advanced pallet rack configurations can add multiple units of depth, significantly increasing storage capacity.
Arrange storage carefully
Once you’ve chosen the most suitable pallet racks and other storage solutions for your warehouse, focus on arranging inventory as efficiently as possible.
For example, group similarly sized storage units and items together so they fit together with minimal wasted space between.
You could also consider narrowing your aisles slightly to increase the total number of rows. Just make sure your aisles remain wide enough to safely accommodate both equipment and staff.
Make use of ‘air’ space
When products are stored on pallets with a lot of “air space” around them, it wastes valuable storage capacity. Consolidating pallets can reduce the total number of pallet spaces in use, effectively freeing up space.
Evaluating and optimising air space can also improve your racking configuration. For instance, if your pallets only need 125cm of clearance height but your racks are set at 200cm, reconfiguring them to the 125cm requirement can create additional rows of rack space, increasing your overall storage capacity.
Take advantage of warehouse slotting
One of the most effective ways to boost warehouse capacity is through a process called warehouse slotting.
Warehouse slotting is designed to make the most of space and enhance picking efficiency by organising inventory based on SKU number, product type, or other features. This method places items that are frequently ordered together near each other, reducing the steps needed for picking.
Update your packaging
Much like optimising air space in your warehouse, rethinking your product packaging can dramatically increase storage capacity. By reducing the size and bulk of your packaging, you can free up valuable space to store more products.
This change not only maximises warehouse storage capacity but can significantly cut down on transportation costs. When you can fit more products into less space, the savings quickly add up across the board!
Forecast demand
This isn’t a way to maximise warehouse capacity per se, but it’s a key consideration that should be mentioned.
Planning for future expansion or anticipated demand is far better than reacting when it becomes a problem. While it’s not always possible to predict every need, a bit of foresight can go a long way.
For instance, if your forecasting model predicts a 20% increase in demand over the next two years, don’t lease a warehouse that can only handle the first two years of growth.
Unless you have a rock-solid plan for relocating or expanding your operation, it’s crucial to secure a space that can accommodate your long-term needs.
It also pays to consider factors like market trends and seasonal fluctuations. If you lack the necessary space to manage an increase in orders and meet consumer demand, you risk jeopardising the customer experience and your company’s reputation.
While being in high demand is often a great position, it’s only beneficial if you have the space, tools, and technology to handle it.
Get the right storage system for your warehouse
Knowing how to calculate the storage capacity of your warehouse helps you lower costs, boost productivity, and drive ROI.
That’s because optimising this space increases accessibility to stored goods, speeds up fulfilment and ultimately accelerates delivery to customers. All while minimising the risk of obstruction and accidents.
Need robust pallet racks to fill your warehouse?
At Pallet Racking Sydney, we deliver affordable, durable, and customised storage solutions for any size warehouse.
Our wide selection includes Schaefer selective racking, longspan shelving, cantilever racking, and a variety of racking accessories.
Shop online or contact Pallet Racking Sydney today.
