Is it time to expand—or modify—your warehouse operations?

By Brandon Hodge, vice president of consulting and system integration, Associated, an authorized Raymond Sales & Service Center

You’ve been so focused on growing your business, and then one day you wake up and realize you’ve outgrown your facility. So, what do you do next? Do you have the capital or time to rebuild and start from scratch? What are your options? And what is the best way to attack this problem?

After determining that your facility can’t sustain your growing business, you are left with three choices:

  1. Relocate your operation to a larger facility. (This is your most expensive option.)
  2. Stay in your current facility and utilize off-site storage and/or resources to meet growing business demands until a long-term solution can be implemented. (This can be the most cost-effective alternative to satisfy a short-term need, but it may cost you more in the long run.)
  3. Determine the feasibility to expand and/or modify your current layout and processes. (Often, this option is your best alternative from both a capital and operational perspective.)

No answer is one-size-fits-all, but given the right engineering resources, you can typically solve your problems in a way that won’t strain you financially. For this article, let’s look at option three.

In many cases, optimizing your current storage layout and order fulfillment methods will create a more efficient operation. The first step in the process is a review of existing facility capacity and flow. This step will highlight layout limitations and opportunities for product flow and process improvement.

To address the challenges you uncover, meet with your internal team to discuss and explain how these issues are affecting the company’s bottom line. In preparation for these conversations, rank which challenges need immediate fixing and which need to be addressed later.

After you complete this initial step, recruit the experts. Have experts perform an operational efficiency analysis to determine whether a facility expansion or a modified layout is best suited for your space. This will help to pinpoint areas of opportunity, remedy any prior issues and gauge the budget for each option.

These recommendations should be pragmatic and cost-effective solutions to your problems and help you stay within your budget. In general, when implementing well-developed operational efficiency methods, companies can expect a 12- to 18-month payback period.

At its core, this approach focuses on thoroughly evaluating a company’s order activity and should result in actionable recommendations to optimize labor, storage resources, material handling equipment and business systems. By reviewing your layout, performing an operational efficiency analysis and remedying prior issues, this option can introduce constant upgrades to your warehouse.