Sep 22, 2014

Four Tips for Maximizing Your Industrial Utilization

By Don Catalano


Industrial Utilization, CRE, Tips for Maximizing Your Industrial UtilizationIn many ways, industrial utilization is one of the easiest parts of your corporate real estate portfolio to manage. Industrial spaces are frequently straightforward, offering predictable shapes and a great deal of space on both a square and cubic foot basis. While they may be less expensive to rent than office or retail properties, the need to maximize the benefit you get from them is just as great. Here are four ideas that can help you to squeeze more from the warehouse or manufacturing parts of your portfolio.

Embrace Mezzanine Space

The generous clear heights in many industrial properties allows you to squeeze more value out of them. Given the right racking system and other equipment, you can store significantly more in a building with a 38 foot height than in a building with a 26 foot ceiling. However, the higher the clear height, the greater the effective cost of areas that aren't fully utilized. Not every part of a warehouse can be filled with ceiling-high racks. Office spaces, restrooms, and delivery and shipping areas frequently operate at the height of workers, rather than the height of the building.

One of the best way to maximize industrial utilization is to use mezzanine space. By adding a ceiling and building on top of it, you can use these spaces twice, increasing what you're able to do in a given foot print. One classic example of this is to build office space over the restrooms and break room. Another is to place a return processing department right over the shipping areas.

Narrow Your Aisles

Your aisles need to be wide enough to allow equipment to maneuver and turn around, both loaded and unloaded. But that's all they need to be. As equipment manufacturers continue to innovate, forklifts are getting smaller, allowing you to increase industrial utilization by shrinking your aisles. After all, even a few inches an aisle can add up to an extra row or two of racks.

Consider Random Storage

In a systematized industrial property, items get stored in set places. While this can make warehouse management easier, it can also leads to checkerboard of filled and empty spaces, decreasing your industrial utilization rate. Advances in management technology including warehouse management system software and radio frequency identification tags for pallets or individual items make it much easier for you to find items, wherever they are. This allows you to randomly slot anything into any available space, maximizing space utilization.

Industrial Utilization: Beyond the Numbers

There is more to maximizing your industrial utilization than just looking at metrics like the utilization ratio or the cost per cubic foot stored. When an industrial facility becomes too efficient, labor costs can increase as workers trip over each other to perform their jobs in areas that are too small.

Try our FREE Warehouse Utilization Calculator

On the other hand, it's possible for a warehouse to strike the perfect balance of efficient design and maximum productivity but still be economically inefficient if your company is storing the wrong items or is maintaining too much inventory in the first place.


Industrial Real Estate articles:

A Five Point Strategy for Leasing Industrial Real Estate

5 Secrets of Industrial Site Selection

4 Ways To Optimize Your Commercial Real Estate Utilization Rate

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Don Catalano

Don Catalano