Blog September 8, 2025

Is Your Warehouse Working For or Against You? A Guide to Warehouse Optimization

Updated: September 18, 2025 | 4 min read

I walk into a lot of warehouses. More often than not, especially with businesses that have experienced rapid growth, I see the same thing: a facility that feels pieced together. You can see the story of the company’s evolution in the infrastructure itself—an extra rack added here, a new shelf there to solve a problem of the moment.

These are band-aid solutions. But the core setup was never intentionally designed for the business they’re running today. This piecemeal approach often creates hidden friction. Is your warehouse actively helping your operation, or is it a collection of compromises holding you back?

This blog provides a simple framework to evaluate your warehouse for true warehouse optimization. We’ll look at the three fundamental pillars of capacity: Storage, Pick-Line, and Throughput.

The Foundation: Understanding the 80/20 Rule

Before you can analyze your capacity, you have to know your numbers. The most critical principle here is the 80/20 rule, also known as Pareto’s Law. In simple terms, roughly 80% of your volume or revenue is generated by only 20% of your SKUs.

Do you know your ratio? Is it 80/20 or 90/10? Can you identify your fastest and slowest movers right now? This understanding is the essential first step—the lens through which you must view the three pillars of capacity.

Pillar 1: Storage Capacity – More Than Just Pallet Positions

Storage capacity isn’t just about having space; it’s about having the right kind of space utilized efficiently. It’s not always black and white. Capacity is more than just square footage or a target number of pallet positions; it could be about cubic volume.

You are paying to store every single item in your facility. But are you giving your slowest-moving, least profitable products the same prime real estate as your winners? For example, a vendor might install a ton of double-deep racking to maximize pallet positions. You may hit a goal of 10,000 positions, but if that storage type doesn’t match the profile of the products you actually need to store, those positions are wasted. That’s a hidden cost that eats away at profitability.

Key Question: How much of your valuable space is dedicated to products that barely move?

Pillar 2: Pick-Line Capacity – The Engine of Your Operation

Pick-line capacity is all about the efficiency of your picking process, which is dictated by your slotting strategy.

If 80% of your picks are for only 20% of your items, it’s simply illogical to give every item the same size and type of pick slot. Your fastest movers should be in the most accessible, efficient-to-pick locations. Optimizing your pick line means densifying your active pick locations to minimize travel time.

Consider a standard eight-foot bay:

With pallet positions, you might get two SKUs per bay.
With half-pallet positions, you get four SKUs per bay.
With hand-stack shelving, you could get up to 18 SKUs in that same bay.

By matching the storage type to the product velocity, you can shrink the footprint of your pick line, meaning your team walks less to pick more.

Key Question: Is your pick path organized to prioritize your fastest-moving SKUs, or are your pickers wandering past slow-movers to get to the products they need most often?

Pillar 3: Throughput Capacity – The In and Out

Throughput capacity covers everything else that facilitates the movement of goods into, through, and out of your building. It’s the supporting infrastructure for your storage and picking operations. This includes your receiving docks, shipping doors, staging areas, and packing stations—the arteries of your operation. You have to ensure these areas don’t become bottlenecks.

Key Questions: Do you have enough dock doors for your inbound and outbound traffic? Is your staging space a chaotic bottleneck during peak hours?

Bringing It All Together for Total Warehouse Optimization

True warehouse optimization happens when you see these three pillars—Storage, Pick-Line, and Throughput—as interconnected systems, all informed by your 80/20 product profile.

Getting these basics right is the key to unlocking efficiency and profitability. Thinking through these three areas is the first step to building a warehouse that works for you, not against you.

Now, let’s get to work.

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