SKU Growth and Turnover Speed Help Justify Flow Storage

Nov. 21, 2013
Flow storage systems can help large warehouses with rapid product flows reduce costs by cutting the need for labor and forklifts.

Depending on warehouse size and turnover speed, flow storage systems can reduce monthly costs per pallet position by up to 28 percent compared to manual radio-shuttle solutions, according to a new comparative study published by Interroll and conducted by the management consulting firm Intralenco. At the same time, warehouse capacity can be increased by up to 50 percent.

In order to compare the operating costs of the various storage systems, Intralenco ran a series of comprehensive calculations that factored in initial outlay on hardware, assembly, use of floor space, energy costs, workforce requirements and depreciation. Flow storage and radio-shuttle systems of varying sizes (1000/3000/5000 pallet positions) and turnover rates (x 12/24/36/48 per year) were compared as part of this exercise.

The results show that the cost benefit of flow storage systems over radio-shuttle solutions rises significantly in direct relation to the speed of turnover and number of required pallet positions. Some of the reasons for this are reduced staff costs and a lower number of forklifts required. In addition, the growing diversity of items now being warehoused can require complicated, time-consuming and thus costly transfer of shuttles used in different storage lanes.

“Performance and reliability combined with the lowest possible operating costs are the key to successful material flow solutions,” said Bertrand Reymond, managing director of the global Interroll Centre of Excellence in La Roche sur Yon (France). “Such systems are used by Procter & Gamble, Coca Cola, Red Bull and Coop. The savings made on operating costs mean any initial investment on such flow storage systems is generally recovered in fewer than two years.”

In an end-to-end economic assessment not only the initial investment but also the ongoing operating costs play a particularly important role, as is demonstrated by scientific studies. For instance, a study conducted by Leibniz University Hannover/Germany in conjunction with Southeast University Nanjing/China in 2012 showed that flow storage systems reduce the overall operating costs of internal logistics.

“Flow storage systems offer a manageable and high-performance logistics solution for production, sales and after-sales service,” says Prof. Dr.-Ing. Lothar Schulze, Gottfried Wilhelm Leibniz University Hannover/Germany. “Wherever a limited number of fast-moving items are involved and the aspect of sustainable logistics is a strategic goal, flow storage systems with their compact, energy-efficient technology are hard to beat.” 

Latest from Technology & Automation