Is Bigger Actually Better?
I recently read a white paper that indicates that warehouse clearance heights have grown from 20′ to 24′ in the 1980’s into the 36′ to 40′ range starting in 2010.
A lot of the building height increase has come from big box retail and e-commerce companies, but if you’re looking to consolidate two or more facilities or simply looking for more room by moving to a new distribution center, bigger may be better.
While it might seem that going higher is a no-brainer, there are advantages and disadvantages both ways.
Cubic Footage Matters
Studies have shown that the extra four feet of clear height between 32′ and 36′ adds up to 25% more pallet capacity. This by itself is a significant argument for higher being better. More storage in a smaller footprint offers the opportunity to reduce staff and shorten travel distances within the facility as well, further reducing costs.
A higher cube also allows for wider column and mezzanine space for labor-intensive activities, like picking and packing services. Automated retrieval and storage systems also add greater efficiency when combined with a higher clear height.
36′ and higher distribution centers cost more per square foot, in part due to requiring advanced fire suppression systems designed for the taller heights. Along with this greater expense comes potential increased costs for lighting, HVAC, and lift trucks capable of retrieving upper tier loads. As I’ve discussed, there are many advantages, but care should be taken to ensure that the benefits are worth the higher costs.
Additionally, because the trend and demand is towards higher facilities, older buildings below 36′ in height have higher vacancy rates which contributes to a lower cost per square foot.
The Decision Making Process
If you start with the basics of what you’re storing and the speed and volume that you need it to move at, you can begin to design a system that will help define the building that it belongs in. You’ll want to factor in some flexibility and allow for future growth as well, but it all starts with the efficient, effective and profitable movement of SKUs from Point A to Point B. By selecting a building that fits your system and the goals it meets you can avoid settling for a solution that demands compromise.