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September 8, 2020 Blog

Lesson of the Day: Racking

Deciding whether to put up racking to store products in your warehouse is more challenging than you’d think. Weighing the pros and cons appropriately ensures your company doesn’t waste money.

There are several benefits of the classic “single-selective pallet” racking (single back, every pallet accessible) vs. bulk (pallets stored on the floor), including:

  1. Use cubic space more effectively – for example, a product that can only be stacked one or two-high in bulk can be stored four, five, or six high in racking.
  2. Easy access – because you can access any pallet at any time without touching other pallets, you remove what we lovingly call the “FIFO shuffle” (moving product out of a location to get access to the oldest product).
  3. Reduce damage – racking removes the risk of the product being crushed when stacked in bulk.
  4. Reduce “honeycombing” – when the product is stored in bulk, most locations are typically a single SKU (or even a single lot/batch of an SKU) to avoid excess handling. The result is that when a pallet is picked from a location, the space that was occupied by that pallet remains empty until all of the pallets in that location are gone. This causes inefficient use of space, and is eliminated by the use of single-selective racking since each location can be reused as soon as the single pallet stored is picked.

But there are material disadvantages of racking too, including:

  1. Cost of racking – materials plus installation plus equipment (which can sometimes need to be specialized) to utilize the racking can total hundreds of thousands of dollars.
  2. Potential reduction of picking efficiency – with racking, pickers now will be required to go up and down to pick products, which typically increases the time to pick, thereby reducing efficiency. This must be weighed against the fact that racking typically allows the product to be stored closer together (higher density) from a two-dimensional perspective, which in theory may reduce travel time.
  3. A greater percentage of “common space” – access to every pallet in racking comes with a cost: you need an aisle in front of every pallet. This extra aisle space is space that could otherwise be used to store products. An easy rule of thumb is that product stacked four-high in single-selective racking is equivalent to the same product stacked two-high in bulk storage.
  4. Safety – when people go up multiple levels to pick a product, there is potentially greater risk of injury.

Confused yet? You’re not alone! And these are only some of the issues for the most basic type of racking. To matters more complicated, this analysis will be impacted by the number of SKUs in your warehouse, the velocity of those SKUs, how the product is positioned (or “slotted”), and other factors. In sum, this isn’t easy, and getting the analysis done correctly can save your company a lot of money and headache.

Need a 3PL to handle your logistics and design a custom racking solution for you? WSI is happy to help.

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