Warehouse Management System Activity Exception (Slotting) Optimization

Posted by Gerry Poe

Warehouse Management Systems Slotting

Why do you see inventory items in a store on the end-caps or strategic locations on shelves? Why does it cost suppliers more discount allowances to the store for those items to be located on an end-cap instead of the middle of the shopping aisle? They are visible, quickly picked up, and are more likely the buyer will purchase them. So give your customers what they want, faster and more efficiently.


Reasons to adopt Slotting for your warehouse

Ease of use, ease of picking, ease of packing, ease of sorting, ease of labeling, time-savings, all of these are cost saving, ROI building, and TCO reducers. i.e., justification for rearranging your inventory, regularly, based on what is moving and what is not. A high percentage can reduce Cost-per-package if you are willing to accept the “SYSTEM’s” control.

Inventory Slotting Scenario

In most warehouse or distribution centers, warehouse management personnel spend significant amounts of time each day traveling back and forth across the floor unloading, stocking, and picking. Reducing this travel time can result in increased pick productivity, faster shipping times, and significant labor cost savings for the company.

Inventory-slotting is a crucial strategy for reducing travel time on the warehouse floor. Slotting, within warehouse management processes, analyzes inventory movements and purposefully reassigns the bin-position of inventory for greater movement efficiencies. Most ERP systems allow for a discovery report (Inventory Exception) revealing what moves and what does not. Most ERP does not take it to the next level of suggesting “rearrangements” enabling faster shipment and picking times which lower the cost-per-box.

Using inventory slotting processes enables warehouse managers to view inventory movement and sales history to see what’s hot and what’s not in warehouses, bins, and subsequently lots, and serial numbers. Inventory slotting is based on a variety of criterion placing inventory in the best location to enhance customer delivery performance and reduce costs.

Inventory Slotting mechanisms should be developed against warehouse managers, and employees need to know more about inventory to get the tempo of product movements for better forecasting, planning, and improved customer service.

Inventory Slotting helps identify what’s happening in the warehouse with the suggested assignment of inventory, so warehouse workers travel the least possible distance to pick orders.

What is the bottom-line goal? - Paying for warehouse crews to pick more orders in less time.

How It Works

The first step when slotting a warehouse or distribution center is to take a look at the physical space and determine what area should hold the hottest inventory – those items that are the fast movers. Bins and shelves in this area could be identified and labeled as the “Hot-Zone.”

The next step is to determine which items and quantities (capacity or min/max) held in the new Red-Zone (BIN) based on the size of the zone and dimensions of the item. For example, the materials manager may determine that the Hot-Zone is capable of holding the top 50-100 fastest moving parts. By using product movement analysis, materials managers identify items in the Hot-Zone. A study using historical sales data presents suggestions for bin/warehouse reassignments. The same steps are then repeated to identify zones outside of the red zone, including the items they ought to contain.

Ranking your items by movement volumes between fast and slow movers allows optimization based on correct current and historical data. These product-specific rating opportunities enable managing stock locations for optimal picking and delivery of orders. Allowing cost savings while improving customer delivery demands.

The analysis results should allow for the development of slotting movement tasks to take advantage of these re-positioning benefits. For example: Suggesting warehouse transfers from current-bin/location to target-bin/location for all stock codes within the selection criterion range.

Inventory Warehouse Allocation based on Activity Exception (Slotting), while complicated, the process of executing slotting is a simple series of relocation movements. Which results in productivity increases, allowing faster ship times and enhanced customer service, having a positive impact on your bottom line?

Warehouse Slotting is Critical in Improving Efficiency and Reducing Costs. 

We recommend COLLECT WMS which contains a powerful warehouse slotting software tool that optimizes product placement in warehouses and distribution centers in such a way that operational productivity and safety as well space utilization are significantly improved.


Tags: Warehouse Management, WMS, Food & Beverage, WMS Slotting, warehouse slotting

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