Choosing the right rack system for your operation: Factors to consider.
Last month we focused on making the best use of your warehouse storage space. This month we’ll focus on asking the right questions to help you choose the right storage system to meet your specific needs in order to maximize productivity and improve profitability. The material handling storage professional you select should address issues like your anticipated growth, the type of operation you have, manpower requirements, building code requirements and seismic zone constraints, and be able to turn that data into an efficient storage system that maximizes your space and efficiency. Answers to the following questions will help you develop a plan and budget for implementation.
Present Capacity vs. Future Growth
The first step in choosing the right system is to figure out how many sku’s (stock keeping units) you want to store in the space provided. Going back through you previous order history will help you determine how fast your inventory turns, how many sku’s to have on hand, and the amount of working inventory required to service customers in today’s business climate. We are in an environment where next or same day delivery is the key to success, and our ability to respond quickly is the measure of how successful we’ll be.
How much growth do you anticipate during this time and what factors determine that growth? Projecting out three to five years can be a daunting task, but it’s better to be conservative with a backlogged order pipeline rather than saddled with excess inventory and no backlog, so be sure about your numbers. Your figures should take into account both the average and peak quantities on hand if your business is seasonal.
What percentage of these pallets/sku’s represents your most active items? A breakdown of your order profile should reveal that 20 percent of your inventory produces 80 percent of your orders (Pareto’s Law) and you should be storing your most active items closest to the shipping/packing area to minimize travel time, walking, searching, and picker dwell-time functions. All storage systems will never be 100 percent full, and generally, you can expect that the system will be only 75 to 80 percent utilized, so you need to account for the empty space in your overall pallet count and growth calculations.
What type of Business Are You?
Does your business service wholesaler distributors or retailers, and what are the shipping requirements dictated by your customers? Is it pallet in/pallet out, pallet in/case out, or case in/case out? Does your product have a shelf life, which necessitates having a first-in first-out (FIFO) operation, or last-in, first-out (LIFO) operation?
Do you store your inventory numerically, alphanumerically, by size, or in random locations? Space is best utilized if you store your products by common sizes, but you may not be able to do that if your warehouse management system doesn’t allow for random location storage. Ideally, when designing the system, it’s best to be able to store any item anywhere, so it has to be designed around the largest product, the maximum amount of that product on hand, and the amount of working inventory required.
If you store “families” of items together to facilitate efficient order-picking, that becomes the overriding factor in your storage grid. However, this may not be the best method if your operation has a wide range of sku’s requiring multiple pick faces. In any case the fastest-moving 20% of your items should be stored closest to your shipping area for minimal movement and maximum efficiency.
Manpower Requirements
Another area to address is your manpower requirement for management, supervisors, lift truck operators, and clerical personnel. We are not scratching the surface of this topic, but it needs to be addressed in great detail in the overall plan and budget for your system because these costs will be more than 60% of your overall requirments. Operator safety training and process is an important factor in hiring, but the key is to hire good employees and to make it worthwhile for them to stay.
How many orders do you pick per day and how many people will be picking these orders? When you ramp up production or stockpile more inventory for your busy season, what will you need to do to ramp up personnel? If you perform batch picking of common items for several orders it saves time and labor, but you must be able to sort and merge the orders to ensure accuracy. If you’re able to pick directly to shipping cartons, that further eliminates a step in the order-picking process and enables you to get product out the door faster.
When and how often do you replenish your storage system? Many companies replenish their inventory during night shift operations or at off-peak hours to prepare for the next round of orderpickers.
Do you employ cross-docking for your fastest moving products? You should consider bulk floor-stacking or cross-docking large quantities of items that turn quickly because it’s the best way to avoid excess handling of fast-moving items in and out of rack systems. If you have the room, you can locate fast-moving items close to the shipping area and perform check-in functions, all the while leaving the items at the ready for outgoing loads. Thenumber of orders picked per day and the number of people pickingorders and their functions helps to determine the area you’ll need for checking in, processing, and staging for outbound shipping.
Building Codes and Seismic Zones
One of the most important hurdles to overcome and issues to address is the adherence to local building codes and seismic requirements. Code requirements will vary between states and local municipalities, but generally you’ll have to comply with either the IBC (International Building Code), UBC (Uniform Building Code), or BOCA (Building Officials and Code Administrators) codes. Specific locales like New York State and Los Angeles County have developed their own code requirements which override the aforementioned codes. You should be sure to contact the local municipality to determine if a permit is required for rack installation, but it’s a good bet that if you’re doing sprinkler or electrical work in the building you’ll need a permit because these contractors will submit their work to the local officials for approval.
Seismic risk maps will help you determine whether your facility is in a low or high risk area for potential earthquakes based on the level of risk of structural damage in your area. Your system MUST be able to withstand earthquakes of specific magnitudes depending on the risk area, and structural engineers provide stamped drawings and calculations to confirm whether your system will meet the criteria. The local building inspector is the final authority to determine whether your rack system meets the specific requirements based on the engineer’s data.
What Rack System Is The Best Fit For You?
The most popular rack types, the advantages and disadvantages of each, and the ballpark costs listed below will help you establish a budget in order to implement a project. Once you determine the answers to the aforementioned factors, you can begin to map out your requirements.
Selective pallet rack: It is the most commonly used rack type, and it offers the lowest density but the highest degree of selectivity and accessibility. You’ll have first-in, first-out capability, it can be used with any lift equipment, and can be integrated with case goods picking or shelving to maximize the cube. It is also the least expensive at roughly $75.00 per pallet delivered and installed.
Double deep rack: You will generally gain 35 percent more storage capacity vs. selective rack because you are reducing the number of aisles needed to store the product. This is generally a good system if you have two or more pallets of the same product with less importance placed on shelf life and FIFO is not a key issue. This rack requires an investment in a deep reach lift truck for picking pallets, and the stand-up deep reach vehicle cannot be used to load/unload trailers. It is roughly $75.00 per pallet delivered and installed.
Very Narrow Aisle Pallet Rack: The very narrow aisle (VNA) systemis a very popular option for an operation that requires high throughput and high density. The aisle widths range anywhere from 54” to 84” and the vehicles can be either wire/rail guided or independent, which is an important point to consider because they typically cannot be used to load or unload trailer trucks, meaning you’ll need to have additional vehicles that can perform that function in your fleet. The system enables FIFO or LIFO picking and is typically best justified when the rack heights exceed 20’. Systems are very often upwards of 40’ to 50’ high and are designed for use with multiple vehicles for high throughput.
Mobile or movable aisle pallet rack: The system works remotely from a lift truck with rows of racks on carriages moving simultaneously with one aisle in the entire system. The tracks are typically installed on top of or within the concrete floor and the system can be used with any type of lift equipment. The best justification for it is in an operation that is land-locked requiring high cube utilization of slower moving inventory with only one or two material handling vehicles, or even in refrigerated storage spaces. It costs around $400.00 per pallet, and justification is in the form of reduced outside warehouse, transportation costs, and manpower. It is the highest cube utilization of any system, you’ll realize FIFO or LIFO pallet movement, and it is extremely safe, efficient and reliable, and built with safety devices like pressure sensitive aisle sweeps, warning sirens, and infrared safety beams.
Drive in/drive-thru racks: Offer high cube utilization and can be used with any type of lift equipment except turret trucks. The drawbacks are that you must have multiple sku’s of the same product and you lose FIFO capability, and it’s not good for fast-moving items. It works best for staging product for work in process or for shipping, cannot get access to pallets behind front face without moving them, roughly $100.00 per pallet including freight and installation.
Pushback rack: Gives customer the density of drive in rack with the selectivity of standard pallet rack, can be used in warehouses with very high inventory rotation, used with any type of lift truck, hangup problems with bad pallets, can be employed in case pick operation on lower levels with bulk storage above, roughly $220.00 per pallet including freight and installation.
Pallet flow rack: High density, good for product that has multiple pallets of the same batch/sku or same cube, need same aisle space in rear as in front, incline might cause a problem with ceiling heights in very deep configuration resulting in lower cube use, maintains FIFO, bad pallets may get hung up on tracks, usually can’t use with existing rack, frequently used to stage raw materials for production or finished goods before being loaded to trailers for outgoing shipments,
Carton flow rack: Excellent use of space for less than pallet loads, can load from front in tight aisle situations or rear where space is not a concern, can store bulk pallets above and replenish quickly on off hours, increases cube utilization and number of pick faces for less than pallet loads, excellent for high volume small case goods picking, can be used in existing rack, can be integrated with order picker or any type of lift equipment, frequently used with power or gravity conveyor in picking operations,
Cantilever rack: Excellent for large, bulky items like furniture, or long, heavy items like pipe, tube, bar stock, and lumber. Frequently used with large lift vehicles, CombiLifts or side loaders to reduce aisle requirements.
Rack Pick modules: Usually employed with a deck between flow racks for placement of conveyor to facilitate case goods picking on multiple levels, used for high volume case good picking,
It’s not uncommon for a company to have a combination of these systems because their operations have both pallet in/pallet out and case in/case out operations. Next month we’ll discuss the best type of material handling vehicle to meet your needs.