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Warehouse Space Optimization Strategies for Taiwan Businesses

Chen Wei

September 25, 2024

16 min read

Maximizing Warehouse Space in Taiwan's Constrained Environment

With Taiwan’s limited land availability and industrial real estate costs among the highest in Asia, optimizing existing warehouse space has become a strategic imperative for business success. Whether you’re a manufacturer, distributor, or e-commerce fulfillment operator, the ability to maximize storage capacity within your current footprint can mean the difference between profitable growth and unsustainable expansion costs.

Industrial land prices in Taiwan’s major industrial zones have increased by 40-60% over the past five years, with prime locations near ports and transportation hubs commanding premiums of NT$1 million or more per ping (approximately 3.3 square meters). For many Taiwan businesses, facility expansion is simply not a viable option—making space optimization not just desirable, but essential.

Assessing Your Current Space Utilization

Before implementing optimization strategies, it’s crucial to understand your current space utilization. Many warehouses operate at 50-60% of their potential capacity without realizing it. Key metrics to evaluate include:

Cubic Utilization

Most warehouses measure efficiency in square meters, but true efficiency is measured in cubic meters. The typical Taiwan warehouse with 6-meter clear height utilizes only 40-50% of available cubic space. The formula is simple:

Cubic Utilization = (Actual Storage Volume / Available Cubic Space) × 100
Available Cubic Space = Floor Area × Usable Height (typically clear height minus 0.5m for sprinklers and lighting)

Floor Space Analysis

Analyze how your floor space is allocated:

Storage Area: What percentage of floor space is actually used for storage vs. aisles, staging, and empty space?

Aisle Efficiency: Are aisle widths appropriate for the equipment used, or are they wider than necessary?

Dead Zones: Are there areas of the warehouse that are underutilized due to layout inefficiencies?

Inventory Velocity Analysis

Understanding which products move quickly (A items) versus slowly (C items) is essential for optimizing both space and picking efficiency:

A Items (Top 20% of SKUs, 80% of volume): Should be in prime, easily accessible locations

B Items (Next 30% of SKUs, 15% of volume): Secondary locations with good accessibility

C Items (Bottom 50% of SKUs, 5% of volume): Can be stored in high-density, less accessible systems

Proven Space Optimization Strategies

Strategy 1: Vertical Storage with AS/RS

Automated Storage and Retrieval Systems represent the ultimate in vertical space utilization, reaching heights of 30-40 meters in purpose-built facilities:

Unit Load AS/RS:

Store palletized goods at heights impossible for conventional forklifts

Typical installations in Taiwan range from 15-25 meters in height

Storage density 3-4 times higher than conventional racking

Particularly effective for slow-moving inventory that doesn't require frequent access

Mini-Load AS/RS:

Automated storage for totes, trays, and small cartons

Perfect for e-commerce and parts distribution applications

Heights typically 10-15 meters with very narrow aisles

Storage densities of 200-400 totes per square meter of floor space

Shuttle Systems:

High-throughput systems with multiple shuttles per level

Ideal for high-velocity items requiring frequent access

Modular design allows phased implementation

Strategy 2: Narrow Aisle (VNA) Operations

Reducing aisle width is one of the most cost-effective ways to increase storage capacity:

Aisle Width Comparison:

Conventional Counterbalance Forklift: 3.5-4.0 meter aisles

Reach Truck: 2.7-3.0 meter aisles (25% space savings)

VNA Turret Truck: 1.6-1.8 meter aisles (50%+ space savings)

Order Picker: 1.4-1.6 meter aisles for man-up applications

Converting from conventional to VNA operations can increase storage capacity by 40-60% in the same footprint. The investment in specialized VNA equipment typically pays back within 2-3 years through avoided facility expansion costs.

Strategy 3: Mobile Racking Systems

Mobile racking eliminates wasted aisle space by mounting racking on powered carriages that move on floor-mounted rails:

Space Increase: 80-100% more pallet positions compared to selective racking

How It Works: Racks move apart to create a working aisle only where and when needed

Best Applications: Cold storage (most common in Taiwan), archives, slow-moving inventory

Considerations: Lower throughput than fixed racking, but excellent for space-constrained facilities with moderate access requirements

For Taiwan’s many cold storage facilities, mobile racking is particularly valuable because it maximizes refrigerated space—the most expensive storage space to build and operate.

Strategy 4: High-Density Pallet Storage

When product velocity and variety allow, high-density pallet storage systems dramatically increase capacity:

Drive-In/Drive-Through Racking:

Forklifts drive directly into the rack structure

Up to 10 pallets deep per lane

85% floor utilization (vs. 45% for selective racking)

Best for large quantities of identical SKUs

Push-Back Racking:

Pallets stored on nested carts that push back on inclined rails

2-6 pallets deep with LIFO flow

No forklift entry into rack structure (safer than drive-in)

Good balance of density and selectivity

Pallet Flow Racking:

Gravity-fed system with pallets on roller conveyors

FIFO flow—essential for date-sensitive products

5-20 pallets deep depending on application

Common in food and beverage, pharmaceutical applications

Strategy 5: Mezzanine and Multi-Level Structures

Adding intermediate levels within existing building height creates new floor area without facility expansion:

Structural Mezzanines: Free-standing platforms for storage or picking operations

Rack-Supported Mezzanines: Integrate mezzanine floors with racking structures

Multi-Tier Pick Modules: 2-4 levels of pick positions with integrated conveyor systems

Typical Addition: 50-100% more usable floor space within existing building envelope

Strategy 6: Optimized Slotting and Layout

Sometimes significant space gains come from better organization rather than new equipment:

ABC Velocity Slotting: Position fast-moving items in prime picking locations

Product Affinity Analysis: Store frequently co-picked items near each other

Seasonal Adjustments: Relocate inventory based on changing velocity patterns

Right-Size Storage: Match storage location size to product cube (avoid storing small items in pallet positions)

Case Study: Taiwan Electronics Manufacturer

DepotFit recently helped a Taiwan electronics manufacturer triple their storage capacity in the same footprint:

The Challenge

8,000 square meter warehouse with 8-meter clear height

Conventional selective racking with counterbalance forklifts

Operating at 95% capacity with no room for growth

Facility expansion not possible due to location constraints

The Solution

Installed 18-meter AS/RS system for slow-moving inventory (C items)

Converted remaining area to VNA operations with narrow-aisle reach trucks

Implemented mobile racking for medium-velocity items in climate-controlled area

Added mezzanine level for small parts storage and picking

The Results

Storage Capacity: Increased from 4,500 to 13,500 pallet positions (300% increase)

Floor Space Efficiency: Improved from 45% to 82% utilization

Cubic Utilization: Increased from 28% to 71%

Labor Productivity: Picking efficiency improved 40% due to optimized slotting

ROI: Full payback achieved in 28 months through avoided facility expansion

Getting Started with Space Optimization

DepotFit offers comprehensive space optimization services for Taiwan businesses:

Free Warehouse Assessment

Our engineers will visit your facility to evaluate current utilization and identify optimization opportunities. The assessment includes:

Floor plan analysis and measurement

Current storage system evaluation

Inventory profile analysis

Material flow and picking pattern review

Preliminary recommendations and ROI estimates

Detailed Optimization Study

For facilities with significant optimization potential, we provide detailed studies including:

3D layout design and visualization

Simulation modeling of proposed solutions

Detailed cost-benefit analysis

Implementation roadmap and phasing options

Equipment specifications and vendor recommendations

Take Action Today

Don’t let space constraints limit your business growth. Contact DepotFit today to schedule your free warehouse assessment and discover the untapped potential in your Taiwan facility.

With industrial real estate costs continuing to rise and facility expansion becoming increasingly difficult, space optimization is no longer optional—it’s essential for competitive success in Taiwan’s dynamic market.

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Keywords

warehouse space optimization Taiwanstorage density TaiwanAS/RS TaiwanVNA operationsmobile racking Taiwan

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