Good warehouse slotting is a vital yet understated part of many businesses. With carefully planned organization, you can cut down on the time workers spend finding items and getting them to distribution centers. This reduces mistakes and fulfills orders faster.
One step to accomplishing this is establishing strong slotting operations. Keep reading to learn how.
The Slotting Process in Warehouse Management
The slotting optimization process is a form of inventory management that organizes your warehouse to optimize product picking. It generally involves analyzing your available storage capacity and the items to slot. Then, you can work out the optimal placement of different stock-keeping units (SKUs) for speed of picking and ease of finding.
You can divide slotting into two components:
- Macro slotting, which focuses on optimizing a warehouse’s layout.
- Micro slotting, which looks at how you place individual items or pallets in specific locations in the warehouse, from the zone to the exact shelf.
Every company should establish a proper slotting process to achieve:
- Faster order fulfillment operations
- Fewer errors
- Better use of warehouse storage space
- Higher productivity
- Better visibility in each zone
- Safer work environment
Top 6 Warehouse Slotting Strategies and Best Practices
There are many ways to improve your inventory slotting strategies to best optimize your space utilization. Here are the best methods we believe will help you.
1. Organize Items Based on Demand Correlation
A common warehouse management optimization strategy is to place products according to their turnover rates, with the highest turnover in the closest slot to the packing station. You place the slowest-moving products in the least accessible warehouse zones.
Order picking can cost up to 55% of the total warehouse operating expenses. This is because the travel time to pick the SKU makes up a significant amount of a facility’s direct labor activities.
By prioritizing fast-selling items, you reduce the travel time for workers pulling the most popular items during the picking process. Conversely, you minimize the number of times workers need to visit the least accessible zones by placing the slow-selling items in these areas.
It is important to be aware, however, that slotting based on demand correlation can concentrate too many workers in the same area during busy times. This can cause bottlenecks.
2. Leverage a Warehouse Management System
With the growth of the software-as-a-service industry, you can access advanced slotting tools, algorithms, and real-time reports easily with a warehouse management system (WMS). This information helps you automate the process and finds trends you may not have been able to spot previously to improve product placement.
Pickers can also use wearable or handheld devices that run the WMS program to optimize their pick paths, helping them quickly find an SKU instead of constantly referring to a spreadsheet that lists all SKU numbers in the warehouse. This also reduces the time they may need to spend reslotting items.
You can also assign each product a unique scannable barcode or RFID tag that you scan into the WMS when it arrives. Then, workers can scan it as it moves along the supply chain process, from picking to packing and shipment. With this information, the software can easily track inventory in real-time, improving picking efficiency and reducing shipping errors.
3. Consider a 3PL Fulfillment Center
Ecommerce businesses often use a third-party logistics (3PL) fulfillment center to handle their warehousing requirements to avoid the costs of owning and managing a warehouse. However, even brick-and-mortar businesses that don’t have access to the proper personnel and technological resources for warehouse management should consider partnering with a 3PL company.
These companies handle everything in the warehousing process, from inventory to order management. With a 3PL partner efficiently handling your products, you will have more time to dedicate to other value-added work like scaling up your sales and production.
4. Define SKUs’ Cube Size and Weight
Pallets, cases, and individual items fit into a warehouse according to each SKU’s cube size and weight. To make optimal slotting decisions, you will need exact measurements of each SKU. If you use a WMS, it helps to look at the cubic velocity, which considers both size and location, to measure the average quantity ordered over time, product dimensions, and item level.
In general, big and heavy items need space on or near the ground level so workers can easily load boxes onto picking carts to safely carry them. It’s also better to keep these items close to the shipping dock, because moving them can be time-consuming.
Conversely, smaller or lighter items that may be fragile should be on a level that helps workers pick them carefully. They also may need to be set in slots where placing and picking other products on the shelves is less likely to break or damage them.
5. Evaluate Item Velocity
In slotting, you generally want to make fast-moving SKUs accessible and get slow-movers out of the way. You can do this by maintaining a down-forward picking area, keeping popular items close to packing and shipping so pickers have less travel time. This prevents items that sell slowly from creating a bottleneck for fast-moving items.
To do this, you need to evaluate SKU velocity. At the highest level, you can run a slotting analysis by classifying inventory based on picking size and frequency of picking (fast, medium, slow or very slow). Then, by cross-referencing the time it takes to pick each part against the order frequency, you can make a cost-to-pick graph.
Most warehouse managers use “ABC slotting” to get more insight. This process looks at the number of each SKU ordered over a set period of time — usually 30 days. They group the top 50% into “A,” the next 25% into “B,” and the last 25% into “C.” Items that were ordered so rarely that they didn’t make the list go to another bucket, “D.”
Then, you can arrange the “A” items into the easiest slots to reach. “B” items go in the next easiest-slots, and so on, keeping “D” items furthest away. You should regularly re-evaluate your classifications for velocity slotting, because velocities may change over time.
6. Consider the Item’s Level and Cases or Pallets
Item level and storage dictate the kind of equipment workers will need for picking, such as forklifts, carts, or pallet jacks. With a good system, pickers will know the equipment they’ll need to retrieve an SKU simply by knowing where it is.
The storage container should also guide the item placement. For example, SKUs that workers pick by the full pallet will need a forklift, whereas single pieces won’t. So pallets should be separate from cases and individual units.
It’s also good to keep in mind that there is a sweet spot which makes individual items easiest for pickers to see and reach. Generally, these items should be between an average person’s chest and knee height.
High-velocity SKUs should be on shelves at these levels for easiest access. Slower-moving SKUs should be out of the way, with the heaviest SKUs as close to the floor as possible.
Boost Your Entire Warehouse Efficiency With Surgere
Making your warehouse more efficient is a way to improve your bottom line that many businesses miss. Enforcing effective warehouse slotting strategies is one way to do this. But Surgere can help you optimize your warehouses even more, with real-time location information, alerts for exceptions, and raw material tracking throughout the warehouse handling process.
Contact us to learn how we can enhance your supply chain.
