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First question which pops up when deciding storage mode for pallets in a warehouse with a pallet in pallet our operation is whether we should go for racks or store them in bulk on floor? This article tries to define indicative signs for most cost-efficient storage mode for given storage profile.
A model was built for storage of 2,000 pallets with few assumptions as shown in table (A). Cost for storage per month (here per turn) was estimated for a racked warehouse (Selective pallet racking system). This cost was then compared with different configuration of bulk storage shown in table (B). The results are visualized in the graph.
It is clear that unless we increase the density of storage in bulk, it is nowhere close to the cost we pay for a racked warehouse. But as we increase the density of storage in bulk, the cost comes closer and even gets cheaper than racks at few points. It can be concluded from the graph that,
If your pallets/ SKU are greater than 8, or
Sqft./ pallet is less than 8, and or
Pallets can be stacked 3 or more high
Then you should consider bulk storage over racks.
However, the model considers very few inputs, but there are many other factors which should be considered before deciding storage mode on case basis. To name few of the other factors which affects decision of racks vs bulk storage are as below,
MHE cost reach truck vs forklift or pallet rider
Inventory turns
Flexibility to reconfigure layout
FIFO/ FEFO or Lot management constraints etc.
Product dimension on pallet and overhang
Lighting cost
Building rent can be cheaper for lesser clear height suiting bulk storage
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