A post from one of the CRE blogs I read regularly from Allan Buchanan brings me back to my old industrial days: Cube! In the world of logistics a lot of time and energy goes into thinking about how to best use warehouse space. It all comes down to an optimization exercise of the following areas:
- Space
- Labor
- Capital Expense
Different products have different profiles when it comes to this optimization effort. High velocity products are best at ground level so that they don’t take a lot of time to putaway, pick and ship. Lower velocity products should go up in the ceiling in the space that doesn’t need to be used very often – best not to use high demand lower space for product that may only get ordered occasionally.
The problem with using the air is that you now have to invest in rack, forklifts and at least a starting WMS. That means capital investment and definition of processes beyond just the basics. In most cases (my best guess is 99%) basic rack up to the joists is justifiable purely as a way of saving lease costs on excess space. Vertical space is essentially free once you have a lease.