Glossary
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Example H2
Supply Chain Glossary
ABC analysis
Advanced Shipping Notice (ASN)
Agile supply chain
Air waybill (AWB)
Arrival notice
Automatic Identification Systems (AIS)
Backhauling
Backorder
Bay plan
Beneficial Cargo Owner (BCO)
Bill of Lading (B/L)
Blank sailing
Blind shipment
Bonded warehouse
Booking confirmation
Booking request
Break bulk cargo
Buffer stock
Bulk cargo
Bullwhip effect
CIF (Cost, Insurance and Freight)
Capesize Ship
Cargo release
Cargo survey
Carrier
Carrier haulage
Carrier scorecard
Certificate of origin
Commercial invoice
Commodity
Consignee
Consignment inventory
Consignor
Container depot
Container discharge
Container freight station
Container grade
Container packing certificate
Container rollover
Container stripping
Container stuffing
Cross docking
Customs broker
Customs clearance
Customs manifest
Cut-off
Cycle counting
DAP (Delivered At Place)
DDP (Delivered Duty Paid)
DDU (Delivered Duty Unpaid)
DPU (Delivered At Place Unloaded)
Dangerous goods declaration
Deadheading
Deadweight tonnage
Demurrage
Detention charges
Digital twin
Dimensional weight
Dock receipt
Draft (Draught)
Drayage
Drop shipping
Dry bulk cargo
EDI booking
EORI number
ETA (Estimated Time of Arrival)
EXW (Ex Works)
Economic Order Quantity (EOQ)
Electronic Product Code (EPC)
Equipment
Equipment discharge / load report
Exception
Expedited freight
FAS (Free Alongside Ship)
FCA (Free carrier)
FCL Freight
FOB (Free on board)
Feeder operator
Feeder vessel
Feedermax Ship
Fill rate
Flags of Convenience
Fourth Party Logistics (4PL)
Free trade zone
Freight forwarding
Freight visibility
Full truckload (FTL) freight
GLEC framework
Gate-out
German Supply Chain Act
Global Trade Item Number (GTIN)
Goods Receipt Note (GRN)
Green logistics
Handysize Vessel
Haulage equipment
Haulage requirements
Haulage type
Haulier
House Bill of Lading (HBL)
Hub and spoke model
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Warehouse utilization

What is Warehouse Utilization?

Warehouse utilization is a logistics KPI that refers to the effective use of available warehouse space for storing goods and inventory. It measures how well the storage capacity of a warehouse is being used relative to its total capacity. High warehouse utilization means that space is used efficiently, maximizing storage and minimizing wasted areas. Effective warehouse utilization is crucial for reducing operational costs, improving inventory management, and ensuring smooth logistics operations.

How to Calculate Warehouse Space Utilization

To calculate warehouse space utilization, divide the total amount of space used for storage by the total available warehouse space and multiply by 100 to get a percentage.

For example, if a warehouse has 10,000 square feet of total space and 7,000 square feet is utilized for storage, the utilization rate is (7,000 / 10,000) * 100 = 70%.

What is the Optimal Warehouse Utilization Rate?

The optimal warehouse utilization rate varies depending on the type of goods stored, the layout of the warehouse, and operational needs. Generally, a utilization rate between 70% and 85% is considered efficient, allowing for adequate space for operational activities like picking, packing, and movement of goods. Excessively high utilization rates can lead to congestion and operational inefficiencies, while lower rates may indicate underused space and potential opportunities for consolidation.

How to Improve Warehouse Space Utilization

To improve warehouse space utilization, start by analyzing and optimizing the layout and storage systems to better accommodate inventory. Implementing high-density storage solutions, such as vertical racking or automated shelving, can help maximize space. Additionally, regularly reviewing inventory levels using cycle counts or other methods, and adjusting storage practices based on demand patterns can prevent overstocking and ensure that space is used efficiently. Leveraging technology, such as warehouse management systems (WMS), can also enhance space planning and improve overall utilization.