There are a lot of normal and expected things that can result in poor vertical space usage, like fluctuating inventory. Items that were once taking up a full 48″ of space in a given bay and shipping every day may be moving at a snail’s pace the next quarter, leaving empty space in its place. Or, maybe a beam level that was once used to store a taller product is now being used for something with a lower profile, but the beam levels were left the same. Seemingly little things like these are easy to miss, especially if they happen gradually.
Of course, few warehouses get it perfect. There are always a few unpredictable changes here and there that need to be priced into the overall warehouse efficiency formula. But the more pallet positions with unused vertical space there are in a warehouse, the more potential there is for opportunity cost. When this starts to become apparent, a common reaction is to propose getting more warehouse space or additional storage equipment. After all, if space is starting to run low, those are two commonsense solutions. The problem arises when space isn’t actually running low, but is instead being poorly utilized. This is when the solution of re-slotting pallet rack presents itself as a more cost effective solution to buying more space or a new storage system. Compare the image of well-used vertical space below to the image at the beginning of the article.