What is Warehouse Space Utilization?

Warehouse space utilization is one of the most important considerations when calculating warehouse space needs for your products AND it’s almost always underestimated.  Warehouse space is not always used for storage as some of it is also used for rows between products, columns, maintenance, staging & checking areas, safety walkways, loading areas, admin areas, equipment parking, etc.  Also, product configurations do not always utilize every stack & bay all the time because of rotating products, stack issues, audit requirements, quality issues, and other things related to the nature of the product.  Overall, the more SKUs & the more data codes & lot #’s you have to track, the lower your utilization.  Some companies typically use 50% for things requiring date codes, and 60% to 70% for things not tracked by date or lot codes.

As a general guideline you could use these percentages:

• 40% utilization – when products do not stack very neat
• 50% utilization – food grade utilizations for products that stack neat and turn at least 10-15 times annually.  Date codes will keep bays from being completely used.
• 60% utilization – non-dated coded products with 10 to 100 SKUs and turns 6-12 times annually.  This is typically non-perishable consumer goods.
• 70% utilization – Typically 2-10 SKUs with no date codes and products turn 4-6 times annually.
• 80% utilization – 1-2 SKUs with no date code and the products stack neat and tight.

If you are renting warehouse space in Austin and need help determining your needs feel free to give us a call.