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Posted by Stephanie on May 8, 2023

Keeping your warehouse organized is essential if you want to maintain productivity and efficiency. Warehouse slotting is a common process that involves organizing all of the inventory that’s stored in your distribution center or warehouse. The purpose of this process is to make the picking and replenishment tasks more efficient, easier, and faster.

To understand what warehouse slotting is, let’s say that all of the ingredients and items you store in your kitchen are placed in random piles. In this scenario, you’ll likely spend an inordinate amount of time searching for the exact items you need. Instead of randomly organizing your items, it’s better to implement a strategy that allows every item to be assigned a specific location. The items that you use most often would be situated in an area that’s easy to access.

Warehouse slotting offers the same advantages. By knowing where every item is located, it will be easier to find and pick the items you need. The following is a comprehensive guide on warehouse slotting and why it should be implemented in your warehouse or distribution center.

distribution center

What is warehouse slotting and why is it important

A warehouse mainly consists of pallets, items, and slots. The items involve any products that the warehouse ships. A slot is a shelving unit where these items remain until they are sent somewhere else. The pallet is a type of frame that’s capable of being picked up and moved by a forklift. The employees in your warehouse are tasked with picking these items out of their slots and moving them onto pallets. These items are then placed on trucks with a forklift.

The warehouse slotting process occurs when planners identify the best slot for every item. For instance, it might be best for a quick-selling item to be positioned in a slot that’s nearby the loading dock, which ensures that the item is loaded quickly.

While a great warehouse slotting strategy offers numerous benefits, there are also a few challenges that warehouses managers and personnel must navigate. Since every item comes with a unique set of characteristics, warehouse slotting is complex.

When slotting items, multiple overlapping priorities must be taken into account. Even though speed is an important consideration, safety is as well. In the event that every quick-selling item is positioned close to the loading dock, it’s possible that the pallets will become unbalanced, which places workers in danger.

In order to make the most out of warehouse slotting, it’s highly recommended that you weigh the various priorities and attributes. A good result can lead to improvements in customer satisfaction, speed, and safety. When used properly, warehouse slotting can bolster your company’s bottom-line and top-line performance. Some additional benefits of warehouse slotting include:

  • Reducing the amount of parts handling that needs to occur
  • Balancing workflow
  • Improving accuracy and inventory
  • Minimizing travel time
  • Improving space utilization

Best Practices for Successful Warehouse Slotting

If you want to be certain that you’re able to perform successful slotting in your warehouse, there are some best practices you should follow. These practices include:

  • Analyze product characteristics and demand patterns
  • Use ABC analysis to prioritize product placement
  • Implement zone picking
  • Utilize slotting software and other tools to optimize placement
  • Continuously review and adjust slotting strategy

Your first goal is to analyze the characteristics and demand patterns of the products that are currently being stored in your warehouse. Items that have relatively low demand shouldn’t be placed near the loading dock. On the other hand, you should attempt to position every high-demand item as close to the loading dock as possible. Understanding the characteristics of each product will also help you avoid making any mistakes when it comes to weight distribution.

You should aim to implement zone picking as well, which means dividing the warehouse into separate zones. For instance, you can have a zone that’s dedicated to hand picking and another that’s focused on forklift picking. The most effective way to store items is to do so based on which ones tend to be purchased together. For instance, razors are typically purchased with shaving cream or replacement blades.

Another option at your disposal is to take advantage of ABC slotting, which involves listing all of your product SKUs that have already been fulfilled over a specific period of time, which is usually 30 days. You’ll then sort this list by the total number of line orders.

For the top 50% of items that have the most line orders, they’ll be labeled with “A”. The 25% of items below this are labeled with “B”, which means that the final 25% come with the “C” label. If there are any items that weren’t ordered in the specified period of time, they should be affixed with a “D” label. You can use the “ABC” designations to arrange items in your warehouse. The “A” items can be close to the main picking area and loading dock.

You should also use slotting software to optimize the slotting process and make sure that your warehouse layout and design is as efficient as it can be. The right software allows you to optimize placement and lower the chances that you’ll make costly errors when choosing where to place specific items. Continuously review your slotting strategy to make the necessary adjustments that will allow you to maintain a strong warehouse slotting strategy.

Pallet Racking with Waterfall Wire Decking

The Role of Slotting Optimization in Warehouse Design and Layout

If you want to take steps to improve the slotting in your warehouse, you should conduct a slotting analysis and optimize your strategy for better efficiency. In order to implement effective warehouse slotting, you’ll need to have a considerable amount of inventory data on hand. For instance, you should have at least one year of inventory data that includes projected and seasonality inventory growth.

If you’re using a warehouse management system, you should be able to purchase inventory slotting software as an add-on. In the event that you don’t use a warehouse management system, standard slotting software can be obtained. The inventory data you gather to perform your slotting analysis should include:

  • The picking methodology for each SKU
  • Number of cartons, broken cases, and pallets for each SKU
  • Number of times a SKU is picked
  • SKU descriptions and numbers
  • Frequently picked together SKUs
  • SKU weights and sizes
  • Pick quantities
  • Total SKU quantity

Once you perform a slotting analysis, you should be able to optimize your slotting strategy. After this strategy has been optimized, you should notice significant improvements to your key performance indicators (KPIs) and metrics.

Collaboration and Technology in Slotting Optimization

The only way for warehouse slotting optimization to be effective is to constantly communicate and collaborate with the inventory management and warehouse teams. Everyone should be on the same page. When the inventory management team decides to optimize how they perform warehouse slotting, the warehouse team and pickers should know what changes are set to take place. If they’re not made aware of these changes, the productivity and efficiency improvements that optimization is meant to provide likely won’t happen until the warehouse team acclimates.

The use of automation and technology has helped with slotting optimization in recent years. For instance, the right software allows you to keep track of all items that have low inventory. These items can also have automated reorder points to ensure that your warehouse never runs out of inventory. The same technology is able to keep track of these metrics in real-time, which means that they can use this data to perform warehouse slotting optimization. Any further improvements to automation should help with slotting optimization.

Keep in mind that slotting optimization is a continuous process that doesn’t end once you believe that your slotting has been perfected. Let’s say that you made the decision to place a high-demand item in an area of the warehouse that’s closest to the loading dock. If demand for this item drops substantially in the near future, it may need to be placed elsewhere. To ensure that the slotting process in your warehouse is always optimized, you should constantly gather data, analyze the information, and make the necessary inventory changes.

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Real-life Examples of Successful Slotting Strategies

Over the years, optimized slotting strategies have been implemented in many warehouses and distribution centers to notable success. For instance, the Kubota distribution center that’s located in Ontario decided to use a zone picking strategy that consists of four vertical lift modules and six horizontal carousel modules. These changes have resulted in double the productivity and the recovery of 83% of floor space.

Conclusion

Warehouse slotting is a highly important process that involves placing the items in a position that’s most accessible for pickers and advantageous for warehouse productivity. If pickers can easily access all of the high-demand items that are regularly shipped to other destinations, they should be able to perform loading tasks without much delay.

Because of the efficiency gains you can make with an optimized warehouse slotting process, it’s essential that you continuously improve your strategy and collaborate with all of the teams in your warehouse. Keep in mind that slotting optimization and technology should continue to improve in the foreseeable future. Advancements in AI and machine learning may lead to better optimization and the ability to measure data at a faster rate.

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