How To Calculate Warehouse Space & Storage Capacity | T.P. Supply (2023)

In warehouses and other storage facilities, space is arguably the most valuable asset. By making the best use of their warehouse space, businesses can significantly increase the amount of product they can store in the facility. By being able to store more items at once, they can save money on transportation costs and other expenses. Plus, it allows the staff better access to products, thus allowing them to fulfill orders faster and ultimately get products to the customer sooner. Because of how precious space is in a warehouse setting, warehouse managers and business owners should take the time to calculate how much space they have and how well they’re utilizing it. In this article, we’ll discuss how to make those calculations and improve how you’re using your warehouse’s available storage space.

Calculating the Total Storage Capacity of Your Warehouse

To figure out how well you’re using your warehouse storage space, you first need to calculate the total storage capacity of the building. A common mistake is merely calculating the square footage of the entire facility and leaving it at that. This number, however, does not account for space within the building that cannot be used for product storage. For this reason, you have to take a few additional steps to reach an accurate number for your warehouse’s total storage capacity. Follow these four steps:

  1. Calculate the complete square footage of your warehouse. Let’s say it’s 100,000 square feet.
  2. Subtract the total square footage of space that is used for non-storage purposes. This should include any office space, bathrooms, loading areas and other space where you cannot store goods. Let’s say that calculation comes out to 20,000 square feet. So, your warehouse has 80,000 square feet of usable space.
  3. Determine your building’s clear height, which is the distance from the floor to an overhead object. For most buildings, this would be the distance from the floor to the facility’s steel shell, but it could also be the distance from the floor to the lowest-hanging overhead objects, such as lighting or equipment. Your building’s clear height will impact your usable space because it dictates how high up you can store items.
  4. Multiply your total square footage of usable space (80,000) by your facility’s clear height to determine your warehouse’s storage capacity in cubic feet. Going with our example, if your building’s clear height is 25 feet, it has a total storage capacity of 2,000,000 cubic feet.

The reason you must convert your warehouse’s total storage capacity into cubic feet is because it makes it easier to analyze how well you’re using that space, as you can also calculate your warehouse storage utilization in terms of cubic feet.

(Video) Calculating Cubic Feet: Estimating Volume Based Inventory Storage For eCommerce Sellers

Are You Utilizing All of Your Warehouse Space?

Once you know the total storage capacity of your warehouse space, you can begin to analyze how well you are utilizing that space. You can do this in two steps — learning how to calculate warehouse space utilization and then analyzing your individual usage. How To Calculate Warehouse Space & Storage Capacity | T.P. Supply (1)

1. Learn How to Calculate Warehouse Space Utilization

Calculating your warehouse space utilization will help you make sure you’re as efficient as possible with the available space at your facility. This number represents the percentage of your usable storage space that you’re using. Believe it or not, you don’t want this number to be a perfect 100% — in fact, you want it to be much lower than that. We’ll explain why after going over the calculation. Going back to our previous example, we know the total storage capacity of the warehouse is 2,000,000 cubic feet. To determine how much of that space you’re actually using, you’ll need to calculate the inventory cube size of your facility. Follow these steps to calculate the inventory cube size of your warehouse:

  • Measure the footprints of all your pallet racks.
  • Calculate their total vertical storage capacity.
  • Multiply the true capacity of each of the pallet racks in your warehouse by the total number of racks you have.

The number you reach after making those calculations represents the size of your warehouse’s storage cube. Let’s say the number you landed on after doing this math is 500,000. With your total storage space being 2,000,000, that means your storage utilization percentage would be 25% — which is pretty good.

(Video) Warehouse Capacity Planning - Inventory Businesses [Free Google Sheet]

2. Start Evaluating Your Warehouse Space Utilization

Some of you may be wondering: “Why is 25% a good utilization percentage? Shouldn’t it be closer to full capacity?” The short answer is no. Instead, having a storage utilization that ismore than 27% or less than 22%would signal a potential issue in the layout and design of your warehouse. A utilization percentage of more than 27% would likely mean your staff is having a difficult time moving around the warehouse to pick and restock items, which would result in high labor expenses. On the other hand, a storage cube size that is less than 22% of your facility’s total storage capacity would indicate that you may be wasting potential storage space due to the layout of your warehouse. If we’re still working with the warehouse that has 2,000,000 cubic feet of usable storage space, that would mean a storage cube of between 440,000 and 540,000 would be ideal. So, let’s take the middle of that range — 490,000 — and say that’s the storage cube size to aim for to achieve the optimal warehouse storage efficiency. This number, of course, will vary for every warehouse. But for the sake of this example, let’s say this particular warehouse has a 490,000 storage cube size. Warehouse managers and designers can then lay out the facility with optimization and efficiency in mind, and you can calculate how much of that storage cube size you are actually utilizing. If you are storing 350,000 of product, you would be using 71.42% of the optimal storage space that is available.

Tips for Maximizing Your Warehouse Storage Capacity

Now that you know how to calculate storage capacity, you can run the numbers on your own facility. If your storage cube falls outside that 22% to 27% range or you’re unhappy with the number you reached for the amount of potential storage space you’re actually utilizing, it’s time to focus on your warehouse capacity optimization. By making a few small changes to the layout and organization of your space, you can increase your warehouse utilization numbers and save both money and time. Here are six tips you can apply to your facility to maximize the storage capacity of your warehouse and utilize as much space as possible.

1. Use the Right Storage Solutions

The types of storage solutions you use at your warehouse will have a direct impact on your storage utilization. To reach optimal storage capacity, choose solutions that make sense for the shape and size of your space as well as the types of products you’re storing. How To Calculate Warehouse Space & Storage Capacity | T.P. Supply (2) Some popular storage utilization-enhancing solutions include:

(Video) Warehouse space calculation CSCP Lecture 11 Module 2 Book 2

  • Pallet racks:Pallet racksare common storage solutions for warehouses because they allow staff and machinery to access goods directly. Pallet racks are also adaptable and customizable to a range of product sizes and weights, making them compatible for most facilities. These steel racks can come with either welded or bolted frames.

View Our Pallet Rack Options

  • Drive-in pallet racks:Drive-in pallet racks use the LIFO method — the last product to enter the rack is the next to be picked. This makes drive-in racks ideal for temporary storage solutions and high-volume inventories.
  • Drive-thru pallet racks:With double-sided points of entry in both the back and front for product entry and removal, respectively, drive-thru pallet racks utilize a FIFO system — first in, first out. This racking unit is typically found in the middle of the storage and order fulfillment process.
  • Mezzanines:A mezzanine is an excellent way to double or potentially triple the surface area of your warehouse that can be utilized for storage. It essentially serves as another floor within your warehouse, allowing you to increase your storage area without any construction or expansion. Mezzanines are ideal for storing odd-shaped products or serving as an assembly or sorting area. While mezzanines cannot replace pallet racks, they are an excellent complement.
  • Flow racks:Flow racks also follow the FIFO system, making them ideal for storing perishable goods that are frequently being rotated. Gravity will move the pallets on flow racks as they are picked or moved, sliding the products on tracks until they reach the end of the rack.
  • Mobile racks:Mobile racks operate by basically squeezing multiple rows of products together on guided bases that can slide laterally at an operator’s request.Thismeans that the operator can move the racks left or right, creating an aisle anywhere within those rows to access particular products.
  • Stacker cranes for pallets and boxes:Stacker cranesfor boxes and pallets will increase your usable space vertically by allowing you to access stacks up to 131 feet high for pallets or 65 feet high for boxes. These machines can also operate in relatively narrow aisles — 5 feet wide for pallet cranes and 3 feet wide for box cranes. These machines also move quickly to increase productivity and are compatible with pallets and boxes of all sizes.

2. Rearrange Your Aisles, Pallets and Racks

Once you’ve chosen the best pallets, boxes and racks, it’s time to arrange them in the most optimal way to boost your storage utilization. Keep like-sized items and storage units together for the best organization and fit. Make your aisles a bit more narrow to fit a few more rows in — as long as they’re still wide enough for your staff and equipment to fit through comfortably and efficiently. Not only will having a well-organized warehouse increase your storage capacity, cube size and overall utilization, but it will also increase your employees’ efficiency as they will be able to move around and find items easier. The same goes for any automated machinery you use in your facility. How To Calculate Warehouse Space & Storage Capacity | T.P. Supply (3)

3. Increase Your Clear Height

The clear height of your building has a significant impact on the amount of storage space you have available to you. While it may seem difficult to increase the amount of space you have vertically, it’s possible to boost your clear height by looking at any equipment, infrastructure or other items you have hanging from the ceiling. For example, you might have hanging lights, security systems or cameras, or other items that you can move, replace or reposition to give you a few more feet of clear space. Rather than hanging lights and security systems from the ceiling, consider affixing them to the actual roof or walls to maximize your clear height and, therefore, your potential storage space.

(Video) Warehouse Capacity - My Warehouse is Full

4. Account for Fluctuation Due to Seasonal Inventory

If your warehouse stores a lot of seasonal products, such as holiday decorations, beach gear or winter gear, be sure to account for this fluctuation during the off-seasons. While the total storage utilization of a facility that houses mostly Christmas decorations may be lower during the summer, that doesn’t mean they aren’t doing well or even that they should revisit their warehouse optimization plan. If the managers of this warehouse were to instruct higher-ups that their storage utilization was low and they needed more products to store, they would likely be way over-stocked come winter. Warehouses with significant amounts of seasonal inventory should ideally calculate an optimal storage utilization for their peak season, as well as an optimal storage utilization number to shoot for during the off-season. It simply wouldn’t make sense for them to keep the same amount of product in the facility all year-round, but it also wouldn’t make sense to rearrange the warehouse twice a year to suit the fluctuation in inventory.

5. Allow Room for Growth

Another reason the total storage cube of your warehouse shouldn’t be more than 27% is to allow room for growth and new products. If your warehouse is at full storage capacity and utilization, that’s a good sign that it’s time to expand. Always allow some room for quick growth at your warehouse — you never know when a product of yours will go viral overnight. If that happens, you’ll need to start overstocking that particular item as soon as possible to keep up with demand. It’s a good problem to have, but it’s even better when you’re prepared to handle it.

6. Avoid Estimating Warehouse Storage Capacities

Your warehouse storage capacity is not a number you want to “guess” on. Avoid estimating your storage capacity or “eye-balling” how much of the facility you’re using for storage. Now that you know the calculations and how to reach an exact number for your warehouse storage capacity and utilization, take the time to do the math and figure out the logistics of your space. Knowing your numbers will allow you to develop the most efficient warehouse optimization plan in terms of both its layout and organization.

(Video) Warehouse Capacity - Are you Running Out of Warehouse space?

Contact T.P. Supply Co. for the Tools and Supplies You Need

Once you’ve calculated your warehouse space and storage capacity, it’s time to fill your facility with the premium supplies and tools it needs to operate smoothly and efficiently. From storage rack and shelving solutions to material handling tools and machinery, our product offerings combine excellent safety and security features with durability and superior quality to create an effortless experience for the user. Ready to stock your warehouse space with tools that will last you and your staff years to come?Contact our teamtoday for more information about our product offerings and how they can be an asset at your facility.

Call (877) 302-2337 Now

How To Calculate Warehouse Space & Storage Capacity | T.P. Supply (4)

(Video) Warehouse Management | Product Storing | Warehouse Shipping Receiving | Facility Planning

FAQs

How do you calculate storage space? ›

Multiply the length, width, and height of your belongings. If your larger items make a pile that measures 5 x 5 x 5 feet, you'd need a storage unit with at least 75 cubic feet.

When determining warehouse capacity the most ideal calculation is? ›

Calculating Warehouse Space Needed

Divide the number of pallets by how high you can stack. Multiply the length and width of your pallets to determine the square footage of each pallet. Multiply the numbers from 1 and 2 above together. Divide the number you get from step 3 by your utilization percentage.

What percentage of space in a warehouse should be allocated for the storage of material? ›

Divide your storage area size by the total warehouse size and multiply by 100. What percentage do you get? This number represents the amount of your warehouse that can potentially be used for storage. You should be between 22-27 percent.

What is warehouse capacity? ›

It's the actual physical capacity of the space dedicated for storage. So if you have a simple warehouse setup with 1,000 pallet locations all designed for 40" x 48" x 72" pallets, your theoretical capacity would be 1,000 full pallets or 80,000 cubic feet (80 cubic Ft. per pallet times 1,000 pallets).

How is warehouse capacity utilization calculated? ›

To do this, add up the volume of all of the products that you store in your warehouse, and divide that sum by the building's storage capacity. If you have 225,000 cubic feet of product in your 1,485,000 cubic foot warehouse, you have 15.15 percent utilization, which is relatively healthy.

How is CBM calculated for warehouse? ›

The CBM formula and how to calculate CBM

The CBM formula is a simple calculation – it's the product of: quantity of items * length * width * height. If your shipment has different sized items, simply repeat the formula for each size and add up the volumes.

What determines the size of a warehouse? ›

The size of your new facility will ultimately be determined by these large notions as well as specifics, such as pallet size, aisle width, load-bearing capacity, and more. An experienced systems integrator or warehouse design consultant can help you make sense of all of this data.

What are the standard measurement for warehouse? ›

In the past, most warehouses were smaller than 10,000 square feet. However, these days, the average American warehousing unit is larger than 25,000 square feet. Only an estimated 35% of warehouses are smaller than this, and about half of the current existing warehouses are 50,001 square feet or larger.

What are the capacity factors of warehouse? ›

What other factors affect warehouse capacity?
  • Stock item characteristics (size, fragility, weight, temperature sensitivities, etc.)
  • Current and future number of SKUs.
  • Pallet types.
  • Load dimensions and weights.
  • Storage, racking and picking methods.
  • Vertical cube capacity.
  • Aisle widths.
15 Aug 2018

How do I allocate my warehouse space? ›

How to Maximize Warehouse Space Utilization
  1. Extend your racking up vertically.
  2. Install a mezzanine above a floor-level process.
  3. Reduce aisle width in the racking area.
  4. Change your storage medium.
  5. Add half-pallet storage locations.
  6. Leverage your warehouse management system for directed put-away.
  7. Use underutilized space.

How is warehouse space divided? ›

The most common and efficient way to share is by dividing a warehouse into several smaller areas. You can use demising walls, fences, or special curtains. It is cheaper per square foot to construct a large warehouse than a small one.

What are the storage capacities? ›

Storage capacity refers to how much disk space one or more storage devices provides. It measures how much data a computer system may contain. For an example, a computer with a 500GB hard drive has a storage capacity of 500 gigabytes. A network server with four 1TB drives, has a storage capacity of 4 terabytes.

What is capacity utilization formula? ›

The capacity utilization rate of a company or a national economy may be measured in order to provide insight into how well it is reaching its potential. The formula for finding the rate is: (Actual Output / Potential Output ) x 100 = Capacity Utilization Rate.

How is production capacity calculated? ›

To calculate production capacity, you need to divide the Takt time by the Cycle time. This will give you the number of units that can be produced in an hour. To calculate the capacity for a day, you need to multiply this by 8 (for 8 hours in a work day).

What is the formula of CBM calculation? ›

Length x Width x Height = CBM

This is the formula used to measure your cargo volume in CBM (m³). Say, you have a carton that is 2 metres long, 2 metres wide and 2 metres high.

What is 1 CBM in meters? ›

Cubic Meter to Meter
Cubic MeterMeter
11
21.2599
31.4422
41.5874
6 more rows

How many CBM is 1 kg? ›

EQUIVALENCE: 1 CBM = 1.000 KG.

How is warehouse performance measured? ›

There are several different ways to measure warehouse performance, like evaluating your business' financial statements, conducting performance reviews, and using business metrics.
...
Inventory
  1. Inventory accuracy. ...
  2. Shrinkage. ...
  3. Carrying cost of inventory. ...
  4. Inventory turnover. ...
  5. Inventory to sales ratio.

How is warehouse throughput capacity calculated? ›

To calculate the throughput rate, track the movement of goods through the warehouse for a given period of time. Divide the number of items moved through the warehouse by the amount of labor hours consumed. This is the throughput time per item.

How is warehouse efficiency calculated? ›

It is determined by the volume of inventory received/ number of hours worked. So, for example, you may receive 2000 goods per week and only have two employees at 40 hours each. So in this example, it would be 2000/80 = 25 goods per hour are being processed.

How do you calculate warehouse productivity? ›

Measuring Warehouse Productivity: Top 5 Metrics to Consider
  1. Order Picking Accuracy (percent by order) This metric shows how accurately warehouse employees pick products for orders. ...
  2. Average Warehouse Capacity Used. ...
  3. Peak Warehouse Capacity Used. ...
  4. On-time Shipments. ...
  5. Inventory Count Accuracy by Location.
11 Jan 2020

What is the storage area in a warehouse? ›

Storage area:

This is the place where the goods are deposited and is one of the most complex areas of the warehouse. It is important to know the rotation needs of the items in the warehouse and the type of goods.

What are the 3 warehouse layout options? ›

Warehouse layout options to consider include U-shaped, I-shaped and L-shaped patterns. A U-shaped warehouse product flow is the most common type of layout.

What are the 7 ways to improve warehouse space utilization? ›

That's why we've done our best to give you seven pieces of solid advice that can get you going.
  • Maximize Vertical Space.
  • Use the Right Container.
  • Keep Items Visible.
  • Slot Related Items Together.
  • Provide Regular Training.
  • Invest in an Inventory Control System.
  • Minimize Safety Stock.
15 Feb 2018

What is warehouse and storage layout? ›

A warehouse layout is the planned design of a warehouse to streamline overall operations. The right layout should help to improve the flow of production and distribution. Overseeing an entire warehouse workflow is extremely tedious.

What is the first step in warehouse space requirements determination? ›

“The single most important thing you can do when planning a warehouse layout is to understand what you plan to do with the space…” You have to consider how you will lay out the aisles and shelving, know where you plan to put necessary equipment and how your warehouse design on paper will scale up to a full-sized plan.

What are the basics of warehousing? ›

The six fundamental warehouse processes comprise receiving, putaway, storage, picking, packing, and shipping. Optimizing these six processes will allow you to streamline your warehouse operation, reduce cost & errors, and achieve a higher perfect order rate.

What is a good warehouse utilization rate? ›

To reach the optimal range of 22%-27% space utilization, you need to calculate the total size of your warehouse, your inventory cube size, and the storage cube size in the warehouse; then, you need to determine and evaluate your warehouse utilization space.

Which performance measure is the most used by warehouse managers? ›

But one of the most popular methods is to develop warehouse management KPIs (Key Performance Indicators), which measure how effectively your processes are reaching their goals and objectives—sort of like a report card for your warehouse.

Which is a factor of ideal warehouses? ›

For an ideal warehouse, adequate space should be covered for maximum storage and to keep the goods in proper order. Each trader (big or small) would want that all of his merchandise should be accommodated in one warehouse so that he need not travel to different places to manage the loading and unloading of his goods.

At what range of inventory capacity is a warehouse operating most efficiently? ›

Divide your maximum storage capacity (step 2) by the total warehouse storage area (step 1) and multiply it by 100. The ideal result is around 22%–27%, as this range indicates that there is enough room for warehouse workers to move around efficiently without wasted space.

How do you manage warehouse capacity? ›

How to Maximize Warehouse Space Utilization
  1. Extend your racking up vertically.
  2. Install a mezzanine above a floor-level process.
  3. Reduce aisle width in the racking area.
  4. Change your storage medium.
  5. Add half-pallet storage locations.
  6. Leverage your warehouse management system for directed put-away.
  7. Use underutilized space.

How is productivity calculated in a warehouse? ›

Measuring Warehouse Productivity: Top 5 Metrics to Consider
  1. Order Picking Accuracy (percent by order) This metric shows how accurately warehouse employees pick products for orders. ...
  2. Average Warehouse Capacity Used. ...
  3. Peak Warehouse Capacity Used. ...
  4. On-time Shipments. ...
  5. Inventory Count Accuracy by Location.
11 Jan 2020

What is warehouse efficiency? ›

An efficient warehouse is one equipped with storage systems that boost productivity and leverage the available surface area. Warehouses can be equipped with manual solutions (operators insert and remove the goods from their locations) or automated solutions (the handling equipment manages the goods autonomously).

What is 5S warehouse? ›

"5S" is a philosophy or method or 5 steps that need to be taken to create a "clean and organize" workplace. The 5 steps to do to get a clean and organize workplace as per in 5S are: Seiri means Sort, Seiton means Set In Order, Seiso means Shine, Seiketsu means Standardize and Shitsuke means Sustain.

How can I improve my warehouse performance? ›

If you're looking for some tips to improve your warehouse operations, consider the following:
  1. Maximise and optimise all available space. Rather than expand the footprint of your warehouse, consider better use of vertical space. ...
  2. Lean Inventory. ...
  3. Adopt enabling technology. ...
  4. Organise workstations. ...
  5. Optimise labour efficiency.

Videos

1. Warehouse Management | Product Storing | Warehouse Shipping Receiving | Facility Planning
(Ramzi Fayad)
2. Find the right storage space with the TIMOCOM warehousing exchange
(TIMOCOM)
3. Know the Top 10 Warehouse Optimization Techniques used by every Supply Chain Consultant!
(Supply Chain Way by Alvis Lazarus)
4. HOW TO MAXIMIZE WAREHOUSE SPACE WITHOUT CO$T$
(Prof. ReyDev)
5. Running out of Warehouse Space? Need More Warehouse Capacity?
(Supply Chain Secrets)
6. Capacity and Bottlenecks
(Stephanie Powers)
Top Articles
Latest Posts
Article information

Author: Kimberely Baumbach CPA

Last Updated: 12/16/2022

Views: 6203

Rating: 4 / 5 (61 voted)

Reviews: 84% of readers found this page helpful

Author information

Name: Kimberely Baumbach CPA

Birthday: 1996-01-14

Address: 8381 Boyce Course, Imeldachester, ND 74681

Phone: +3571286597580

Job: Product Banking Analyst

Hobby: Cosplaying, Inline skating, Amateur radio, Baton twirling, Mountaineering, Flying, Archery

Introduction: My name is Kimberely Baumbach CPA, I am a gorgeous, bright, charming, encouraging, zealous, lively, good person who loves writing and wants to share my knowledge and understanding with you.