Inventory Management and Warehouse Operations.


Utilizing Vertical Warehouse Space

By Dave Piasecki


If you’ve worked in an old warehouse with twelve to fourteen-foot ceilings, you likely dreamed of higher ceilings so you could go taller with your storage. Warehouses with twenty to thirty foot or even higher ceilings are fairly standard these days. So now you’re looking at a newer warehouse with tall ceilings where all your dreams can come true. Or so you thought.

Utilizing that height can be rather challenging in some types of operations. In fact, I regularly caution clients looking for a new warehouse to be careful about paying more for those higher ceilings. But before I get into the biggest challenges, let’s go over some easier situations.

Full-pallet picking operations.

Historically, full-pallet operations tended to use bulk floor-stacked storage. That’s assuming the palletized loads can be stacked at least twelve feet high. But with thirty-foot ceilings, you’re wasting a lot of space. This is where very narrow aisle (VNA) racked storage and man-up turret trucks come in. Yes, this is an expensive option. The trucks are pricey, and that’s a lot of rack to buy. But you can get some fantastic storage density while also getting high productivity (turret trucks with wire guidance can provide very high putaway and extraction rates). When comparing this to floor-stacked storage, you have to make sure you do the math right. You can’t compare theoretical storage (the amount of storage if all locations are full) because bulk floor storage (or any high-density storage) has inherently lower utilization the selective storage (single-deep pallet rack). If you do the math, you’ll likely find you have dramatically higher working capacity with the VNA option.

Case-picking operations.

These would typically involve full-pallet in, case-pick out. Once again, VNA storage and man-up vehicles are the solution here. Man-up order pickers work great for case picking, are reasonably inexpensive, and offer good productivity even 20+ feet off the ground.

Piece-picking operations.

This is where the trouble starts. Piece-pick operations (especially piece-picking of small items) tend to work best with mostly low locations. By "low locations" I'm talking about locations that can be picked by a person on foot, Sure, you can use some higher locations, but with 25-foot cielings, the vast majority of your potential storage space is high. Your primary options here are Mezzanines and Man-up Order Pickers, but there are also some automated equipment that can be used.


While this will vary based on the types (sizes, velocity) of the products being picked, the reality is you are unlikely to fully utilize that overhead space in piece-picking operations in tall warehouses without installing some mezzanine. I’m not a big fan of mezzanines. They’re expensive, resulting in rather long ROIs. And it can be a pain in the ass figuring how to efficiently get people and goods up and down from them. This doesn’t mean you shouldn’t use them; it just means you should carefully calculate the ROI before you commit to building a mezzanine, or more importantly, before you pay extra for a building with tall ceilings that would require a mezzanine to utilize fully.

This is where I would generally say you are probably better off finding a lower-ceiling warehouse with a lower cost per square foot. But it’s not as simple as that. While in theory, a lower ceiling warehouse should have a lower cost per square foot, that’s not always the case. And even if it is lower, it has to be quite a bit lower. In addition, ROI on mezzanines can vary quite a bit based on the cost of warehouse space in your area. In some places, warehouse space is rather cheap. This can result in very long ROIs on a mezzanine, and therefore make mezzanines less attractive. However, if you are in an area where warehouse space is much more expensive, a mezzanine will pay for itself much quicker. Also, if you really don’t want to move, and a mezzanine can keep you in your building, that can help to overcome the long ROI. This is particularly true with manufacturing operations where moving can be significantly more complicated and expensive than just moving a warehouse.

Rack-supported mezzanines can be more affordable than free-standing mezzanines, but free-standing mezzanines allow for more flexibility. Also note that there are special building codes related to mezzanines. You are often limited to how much of a warehouse can have mezzanines.

Man-up order picker trucks.

Without a mezzanine, you are unlikely to fully utilize your ceiling heights in many piece-pick operations. But, that doesn’t mean you can't better utilize some of it. I like man-up order pickers. I’ve liked them from the first time I got on one over 30 years ago. And if I’m in a piece-pick operation with ceilings over twelve feet high, I’m almost certainly going to use at least one man-up order picker in it. The most common use for man-up order pickers in piece-pick operations would be to replenish lower picking locations. You basically put your overflow inventory high, and keep your picking locations low. That certainly works, but you’re unlikely to have enough overflow inventory to fully utilize all that overhead space. Once again, this depends on the type of inventory you are storing and your purchasing quantities.

So now we need to look at having actual picking locations high, and picking from the order pickers. The problem here is that even though picking on a man-up order picker can be reasonably efficient, it’s not as efficient as ground-level picking in piece-pick operations. Plus, in high-volume piece-pick operations, traffic can be a problem. Two workers on foot pushing carts can work around each other in an aisle, but two man-up order pickers can’t (or shouldn’t). There are some operations where I’ve recommended doing all picking using man-up order pickers, but those are the exceptions. The more likely solution here is to do some of your picking using man-up order pickers. This isn’t a case where I’m recommending you have people pushing carts doing the low picks, and people on order pickers doing the high picks in the same aisle at the same time. That doesn’t work and is way too dangerous unless you schedule the times the vehicles are being used. What I’m suggesting here is you dedicate some aisles to man-up order picker, and pick all picks (high and low) in those aisles using the order pickers. These would typically be physically larger items and slower movers. This allows you to better utilize some of that overhead space without taking a significant hit on productivity. You may have to change the way you pick the orders in these aisles though. For example, you may work from a consolidated pick list, then sort the items into orders after they are picked.

The faster-moving items would be in separate aisles and would still be picked low, with overflow inventory stored above. As I mentioned, this may not use all the overhead space in those areas, but should use some of it.

Vertical carousels, vertical lift modules, as/rs units.

Automated equipment like vertical carousels, vertical lift modules, and mini-load as/rs units can utilize those cieling heights. I tend to like this type of equipment more in manufacturing operations where the value of space is higher, and where something like a standalone vertical lift module used to supply a work station is a nice fit for both space utilization and productivity. In a typical warehouse, its' more challenging to cost-justify this type of equipment when compared to other options.

Production and Staging Areas.

Production areas are always an issue when it comes to using overhead space. These would include order packing areas, receiving areas, packaging areas, or light manufacturing. You can put up pallet rack and use the lower portion of the pallet rack as workstations. You need to think about what you will store in that rack because you will have traffic conflicts if a lift truck needs to access the rack while people are using the workstations.

Staging areas such as inbound and outbound pallet staging can be racked. You can also put rack over many dock doors (sometimes you may need special rack for this).

I want to mention though once again that if you are in a piece-pick operation, putting rack over workstations and dock areas just gets you more high storage.

Other comments.

Review rack level configurations. If you find you have some empty space above the top level of storage, but not enough for another full pallet, evaluate your rack configurations to see if you can make some changes to use that upper space. Sometimes adding a short hand-load level low (ground accessible) gets you some valuable space and moves all the pallet levels up enough to utilize the full height.

Review conveyor system design. This isn’t going to apply to most, but if you have an extensive conveyor system taking up a lot of floor space, see if there are options to elevate some of it. Designing automated conveyor systems can get complicated. Space utilization isn’t necessarily given a high priority in the process, so there may be some opportunities to save space by reviewing the existing design. And you certainly want to consider this if you are planning a new conveyor system.

Drones? There are people already experimenting with drones in the warehouse. So maybe you can get a whole bunch of drones and have them hover overhead carrying a bunch of your inventory, then drop down and deliver when you need it. I wrote this section on April 1st.

What is your usable height. Make sure you know how much of your overhead space is available for storage. In warehouses with sprinkler systems, you are generally required by fire codes to keep clearances below the sprinkler heads. Fire codes can vary based on your location, but in general, you need at least 18-inches below normal sprinkler heads, but may require 36-inches of clearance for ESFR sprinkler heads.

Using overhead space costs money and may negatively impact productivity. Certainly, it’s better to have extra overhead space than to run out of storage space, but the value of that space when you take into account productivity and equipment costs is less than the value of low space. It’s important to understand this when looking at warehouse space. 30-foot or greater ceilings can be fantastic in full-pallet operations when you use man-up turret trucks, but can be unusable in typical piece-pick operations. Don’t assume that twice the ceiling height gets you twice the storage capacity.

I’m not suggesting everyone should start looking for warehouses with 12-foot ceilings, but rather, be realistic when looking at buildings with taller ceilings. Most of the operations I've worked with over the years are fine with 16 to 20-foot cielings. Some are even fine with 12-foot cielings. A small number can benefit from those 30-foot cielings.

For more detailed information on utilizing warehouse space, check out my book - Saving Warehouse Space: Equipment, Methods, Strategies, and a little Math. .

Saving Warehouse Space explains storage capacity. Not just theoretical capacity (how much you can potentially store), but more importantly, the book explains utilization and working capacity. Without an understanding of utilization and working capacity, you may be making the wrong equipment and layout decisions. In addition, Saving Warehouse Space explains how choices related to pick faces and slotting impact utilization and working capacity.

And, of course, Saving Warehouse Space covers equipment choices and options for aisle widths. Going to narrow or very narrow aisles can provide significant space savings, but you need to make sure you are making the right choices for your specific facility. Saving Warehouse Space even covers lower-cost options to go very narrow aisle.

Other topics include options for offsite storage, and how cost models such as Economic Order Quantity and Equipment Return-On-Investment calculations may need to be tweaked to account for space limitations.


Go to Articles Page for more articles by Dave Piasecki.

Dave Piasecki, is owner/operator of Inventory Operations Consulting LLC, a consulting firm providing services related to inventory management, material handling, and warehouse operations. He has over 25 years experience in operations management and can be reached through his website (, where he maintains additional relevant information.


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