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Warehouse Sizing

Dr Vijay Sangam, 11:53, 09 Jul 2010

I am writing this article based on personal experience and self development process adopted subsequently.  I was part of a team which attended a RFQ briefing carried out by a large IT Hardware vendor in Singapore.  Surprisingly, all competing vendors were assembled in one room to debrief about the RFQ process and objective of the RFQ.  All of a sudden the official who was explaining the RFQ process and deliverables paused for a moment and asked us the size of the warehouse required for a particular volume of operations.  There was a pin drop silence in the room.  If not all of us, some of us were so called subject matter experts and no one was able to come up a with a rough estimate.  I was ashamed and took up the challenge to figure it out how one can do a quick calculation of warehouse sizing.

Subsequently, I have taken up a teaching job and decided that I will learn the technique and also make sure that all my students are trained in this area.  And that is the reason for writing this small article on calculating warehousing size.

Is it possible to calculate the warehouse size if we are given the number of pallets to be stored?  The simple answer is no.  Warehouse size calculation depends upon various dynamics.  I will list some of them hereunder:

  1. Short side handling vs. Long side handling;
  2. Pallet size;
  3. Material handling equipment used;
  4. Aisle space;
  5. Warehouse dimensions (if known);
  6. Block stacking vs. Racking;
  7. Load bearing capacity per sq. metre;
  8. Product shape and size;
  9. Load on the pallet etc.

The most important element is the type of pallet used in the warehouse.  Let us spend some time understanding different types of pallets used.

  1. The Australian Standard Pallet 1165 x 1165mm
  2. European Pallet: EUR 800 x 1200mm
  3. American Pallet: 1000 x 1200mm.

As type of pallet plays a vital role in determining the size of the warehouse.  Here are some specifications about the pallet.

  • Platform with enough clearance beneath its top surface (or face) to enable the insertion of forks for subsequent lifting purposes.
  • Materials: Wood (most common), paper, plastic, rubber, and metal.
  • Size of pallet is specified by its depth (i.e., length of its stringers or stringer boards) and its width (i.e., length its deck-boards)—pallet height (typically 0.127 m.) is usually not specified; orientation of stringers relative to deck-boards of pallet is specified by always listing its depth first and width last: Depth (stringer length) x Width (deck-board length).

Having understood about the pallet and dimensions, it is time to explain how to build a racking module and using a pallet module to calculate the size of the warehouse.  Before we get down to designing the racking module, we may have to assume few things, such as type of pallet to be used, no. of pallets, material handling equipment to be used etc.

  • Type of Pallet – 1.2 x 1m;
  • No. of Pallets – 10,000 nos.;
  • Material handling equipment to be used: Reach Truck with a lift height of 10m;
  • Aisle space: 2.7m;
  • No. of levels -7 (storage);
  • Short side handling.

With the above information let us build a pallet module.

Now we know how much space is required to store two pallets using a reach truck.  Now let us do the mathematical calculation to find out the warehouse size to store 10,000 pallets.  Let me clarify that the calculation is purely for pallets storage purposes only.  And we need space to undertake activities such as receiving, inspection, despatching, office work etc. and we are not dealing with that in this article.

  1. Pallet dimension – 1.0mm x 1.2 mm
  2. Pallet module width – 5.2m
  3. Pallet module length – 1.2m
  4. Storage levels – 7;
  5. No. of pallets to be stored – 10,000;
  6. Pallets to be stored at the ground level= 10,000/14=714 (rounded off)

Storage Size Calculation:

=Pallets stored at the ground level (714) x Pallet module size (5.2m x 1.2m=6.24m) = 4,455sqm.

This means we need 4,455sqm. space to accommodate 10,000 pallets.  This is a rough estimate and if you are looking for a ready made scientific calculator to calculate the ware house space for given number of pallets or no. of pallets to be stored in a given space, please visit online tool at:

http://www.atlet.com/warehouse-calculator

As the aisle width is decided by the material handling equipment used in the warehouse, here is the space requirement for different material handling equipment using the above calculator:

From the above data, one would conclude that CBT is the most inefficient truck with regard to ware house space requirement is concerned.  In reality, it may not be true.  With the significant space saving available with NA and VNA options, certainly everyone should be converting to this type of storage, right? Not necessarily. Warehouses are no more a donjon where goods are stored.  It is a cost centre and every effort is made to make it more efficient in order to keep supply chain costs low.

The counterbalanced lift truck design that’s been used for more than 50 years still remains a very viable option. The flexibility to pick a load out of pallet rack and load it immediately onto a trailer combined with fast travel speeds, a short learning curve, low cost, higher weight capacities, and a great variety of options and attachments will keep the standard forklift and wide aisles around for while. One should not forget that wide aisles also provide more flexibility with diverse load sizes and weights.  However, this truck could become a disadvantageous in locations were space is a constraint.

There are advantages and disadvantages of using narrow aisle trucks.  These trucks will certainly help us in optimizing warehouse size.  But it needs additional investment in other related equipment, slow in travel speed as well put-away and extraction rates.  The learning curve is longer in operating these trucks and inability to load trailers directly. People working on these trucks often complain about neck and eye strain.  Further, safety also very important factor in any warehouse and if storing a heavily loaded pallet at a 30’ height, one should be extra careful in order to avoid accidents and product damages.

Again many factors influence what material handling equipment should be used in a warehouse.  As that is a specialized topic, I would like to end here. Before I conclude, I should thank Mr. Nick Walker my guru who taught me the intricacies of calculating warehouse size.  Thanks Nick!

21 comments

  2. I don’t think I have words to thank you enough Vijay. Your page helped me a lot, I will definitely visit your page or revert to you if I need more assistance more help.
    Thank you for these valuable information.

    Reply

  3. Hi Vijay,

    i’m always required to do warehouse costing for RFQs. Below are some of the challengers i faced.

    1. Determine no. of pallets based on the RFQs activity
    2. Determine the size of the warehouse space required for the ops.
    3. Determine the cost per pallet location

    Can you help me on this? Thank You

    Reply

  4. Hi Vijay,

    I’m am the Logistics Officer of a government owned Retail Commissary store and i was tasked to do a study on what should be the correct warehouse size to be constructed to stock store merchandise? What are the best practices to bench mark on warehouse layout and size?

    Can you please help me on this? Any information will be greatly appreciated.

    Thank you.

    Lawrence Aninag

    Reply

    1. Thanks for the contact Lawrence. Warehouse size predominantly decided by variety of factors such as pallet size; SKU Size; Fork Lift or any other equipment used, type of racks used, office space requirement, receiving and shipping area size; locker rooms; toilets; no. of docks and size of tucks handled. Hence, there is no simple answer to your question. You need all the above information to determine what is appropriate size of the WH that is required for a specific type of business. Further, picking strategy and put away strategy also plays a vital role in designing your warehouse. I wish you good luck, it is a very interesting assignment. All the very best.

      Regards,

      Vijay Sangam

      Reply

      1. Hi Vijay,

        Thank you for your reply. I really learned a lot. However, i forgot to mention that i am talking only of one of our retail outlet with a selling area of about 420 sqm and with an average of 10 million sales a month. No sophisticated material handling equipments, no office space required, no locker rooms and docks. Just a simple hand pallet truck and trolley to bring in deliveries.

        Can it be possible that we can use the monthly average sales using the revenue per sqm /month to compute for the size of the warehouse to store one month buffer stock of different SKUs?

        Regards,

        Lawrence

        Reply

  5. Vijay;

    How can I calculate hoy many pallets contains a 40 feet sea container, considering pallet’s dimensions are 45x48x48 and weights 1,500 lbs each one.

    I need this information to calculate how many square feet in need to have available at my warehouse. Probably I will use 4 level racks

    Thank you in advance for your help.

    best regards,
    Frank

    Reply

  7. Hi Vijay,

    Your article is really helpful to understand the basics while calculating space for a warehouse. I have one query though.
    Can you please explain how to calculate the height of the warehouse, taking the example you have shared above?

    Thanks and regards,
    Suraj

    Reply

  10. Hi Vijay,
    would need your advise on how to calc sqm of warehouse space based on quantity and dimensions of boxes. No pallets – these are medical devices in different dimensions, over 900 SKUs…

    Reply

  11. I have a basic question on warehouse area. If I am looking at a 10,000 sqm warehouse, with racking for Australian Standard pallets to height of say 6, does the 10,000 sqm refer purely to the floor area and then as you install the racking you get additional sqm? or does the 10,000 sqm refer to the current fully racked area? If I am looking at 3 properties all telling me that they are ~10,000 sqm, then I hope to see a similar floor area. Then the racking in them and its layout relative to my business operation would be factor I look at. All things are not equal; 10,000 could be three significantly different volumes. Right?

    Reply

  12. Hi, just a quick one: considering the below formula:
    =Pallets stored at the ground level (714) x Pallet module size (5.2m x 1.2m=6.24m) = 4,455sqm.
    Can that be correct? One pallet module size is for two pallets, right….should we not divide 4455 sqm by 2 then? So the answer for 10000 pallets would be 2227 sqm?

    Reply

  14. I have a problem finding a math type to calculate the space used by a number of pallets..for example,sometimes when you cn’t stack a pallet above another so you can calculate the cost depending the cubic meters, you need to calculate the space used by each pallet….for example lets assume that i have a pallet with the dimensions 200x220x150(in cm) {lxwxh} and I have a container witch is 13.6×2.4(in m) how can I calculate how much space is used by that pallet? i need to find math formula to calculate.

    Reply

  15. Hello Vijay,

    I am working on the same topic and in terms of storage space requirements, I have used similar approach. I really like the way you have simplified it. Can I ask you if you have information on the other parts like receiving, inspection, dispatching? Specifically inbound staging area and outbound staging area. I would really appreciate if you can share some insights on this part too.

    Thank you!

    Reply

    1. I am a consultant and I charge USD 125 per hour. If you wish to avail of my services, I’m happy to assist. If you are looking for a free service, I will provide rough estimates.

      Reply

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