Compact storage: When high storage density hinders processes

Under increasing competitive and cost pressure, industry and trade in logistics are focusing on centralization. Factors such as fixed costs per unit, higher utilization of machines, warehouses, and personnel, as well as cost reduction through the consolidation of goods flows, lead to a concentration on a few efficient locations. Global material procurement and the demands of just-in-time production require centralized control of supply chains.

Moreover, ever shorter product life cycles (PLC) and product variety in different industrial sectors have significant impacts on warehouse logistics. The accelerated course of the various phases of the PLC and the necessity to cater to a growing number of product variants increase the complexity of warehousing and the associated logistics. Additionally, space scarcity and rising real estate costs in planning new warehouses force a focus on efficient space utilization.

This development is reflected in the increasing proliferation of compact storage. High-bay warehouses and highly automated storage systems take advantage of modern automation technology, which in turn drives centralization for cost and efficiency reasons. The focus on capacity and maximum storage density often leads to the neglect of aspects of efficiency in downstream intralogistics processes and dynamic effects of increasingly volatile market development. Instead of looking for ways to store more material in ever smaller spaces, the central question in planning new warehouses should be how goods can leave the warehouse as quickly, smoothly, and efficiently as possible.

The Digging Dilemma: Density Sacrifices Direct Access

Even high-grade automation does not protect compact warehouses from a fundamental problem: Where storage is solely focused on capacity, diversity and dynamics become a trap. Where the size of the property is a significant cost factor, logically, construction is vertical. Accordingly, storage occurs primarily vertically. This makes work difficult even for autonomous mobile robots (AMR) that operate from above.

In order to access deeper storage containers, the units above not only need to be lifted but, in most cases, need to be transferred and then sorted back. This "shoveling effect" creates enormous effort, hinders quick and uncomplicated access, and requires the planning and organization of numerous intermediate steps. These in turn require space and resources, involve time, and overall generate costs. Particularly when a business model relies on short reaction times between order and delivery, these effects are critically competitively relevant.

The Order Structure Decides on Profitability

How strongly the described digging dilemma comes into play primarily depends on the order structure that needs to be serviced. Besides fundamental characteristics such as the type of goods and materials, the variety of variants and the distribution of article access play the main roles here. Where only a few identical articles need to be accessed with high frequency, efficiency in the compact warehouse is easy to ensure. Frequent access from above, in the form of retrieval and replenishment, keeps articles permanently easily accessible. In such a steep access curve, the need for relocation rarely arises and is well-planned.

On the other hand, if components in a great variety are retrieved spontaneously based on acute needs with an unpredictable frequency and quantity, additional relocation efforts arise. This means that all associated processes are slowed down, resulting in uneconomic, long-term competitive-critical waiting times. To reduce these effects, additional robots are needed, leading to extra investment and maintenance costs, and the unit costs increase contrary to the basic objective of compact storage.

Strategies for Minimizing Relocation: Less is More

Optimizing space utilization is an understandable element of an efficiency-oriented competitive strategy. At the same time, practice shows that compression should not blindly be elevated to a self-purpose in warehouse planning. A rational maxim could be: "As much storage density as possible, but as much throughput capacity as necessary." Upon closer examination, it turns out that with the right and especially long-term need-based planning, the compact warehouse can compete in terms of accessibility against the floor warehouse, to which it is already significantly superior in terms of capacity relative to space requirements.

The key to “optimizing the optimization” lies in a precise demand analysis, which considers aspects such as the order structure and the resulting access curves. It leads to fundamental organizational decisions. For example, the targeted reduction of stacking depth can diminish the impact of the dreaded digging dilemma. Even if this does not fully utilize the vertical capacity, the decision pays off in terms of planning capability and process efficiency.

Where the demand analysis shows a mix of items with steep and flat access curves, adapting the warehouse layout is worthwhile. A targeted division into fast and slow movers achieves a significant reduction in relocation activities. Even if this extends the overall space requirement of a warehouse, a hybrid design – divided into zones for B and C items with medium and rare access as well as "Red Zones" for A items with frequent access – can reduce travel times and picking errors, optimize inventory control and technology use, and lower storage costs.

Furthermore, the fundamental decision to limit the fill level can prove beneficial. If the warehouse dimensioning already anticipates a long-term lower utilization rate in the planning phase, the necessity for frequent relocations due to space constraints can be specifically avoided. The individual combination of various proactive measures and strategies achieves optimal results.