Many changes within the warehouse can have a negative impact on productivity making the original slotting setup less than optimal. SKU stock or velocity, new products, discontinued products, new trends in the industry and new technology are examples. The changes can happen slowly and may not be apparent.
It's been proven that a properly slotted warehouse drives down operation costs and improves distribution productivity by 8% to 15%, and can yield space savings up to 30%. It is possible to understand the issues and opportunities with a hits and movement analysis, by mapping it out, or by following pickers. Even so, it's very easy to overlook the true opportunity of slotting and underestimate the impact it can have on productivity.
What is slotting?
Slotting (profiling) is the strategic grouping and location assignment of items in order to optimize the total distribution operation, balancing:
- Customer service commitment
Slotting assigns each item to a discrete location based on balancing these conflicting goals
Why Does It Matter?
Poor slotting is the “silent killer” of an operation and impacts your entire operation.
- Customer Service
Optimized warehouse slotting can improve:
- Picking productivity 10% to 15%
- Replenishment 5% to 15%
- Space utilization 5% to 30%
Optimized warehouse slotting can reduce:
- Order cycle time by up to 50%
- Damages 8% to 15%
… all of which impacts customer service.
Here are questions to help you identify trends and determine if your warehouse is in need of a re-slot:
- Plans to build a new warehouse?
- Are there plans to expand the warehouse?
- Are there plans to retrofit your current warehouse?
- Is warehouse space over capacity and unable to store products properly?
- Has your inventory profile changed since your facility was designed?
- Do you now have underutilized capacity or experiencing a space crunch?
- Are storage systems insufficient to meet inventory needs?
- Do you see an excessive amount of travel time or observe backtracking in your warehouse?
- Do you notice that pickers are frequently traveling into and out of other zones or aisles?
- Do “bottlenecks” exist in your pick paths?
- Are pickers choosing their own routes to pick items and believe they “know better”?
- Have you experienced a spike in missed shipping times?
- Have you observed an increase in order cycle times?
- Do your pick rates fall below industry standards?
- Does your warehouse have racks that collapse and damage products?
- Have you seen a spike in produce damage?
- Have you seen a pattern of certain types of items being damaged?
- Are you interested in optimizing your picking and putaway strategies?
If you are answering the questions with a “yes”, then you are already beginning to consider reslotting your warehouse.
That being the case, here are additional tips to
keep in mind as you make your plan:
- Don’t expect to hit the ground running using slotting software as an easy fix.
- Putting too much faith in the existing SKU data will lead to disappointment.
- Keep an open mind to exploring new rack concepts.
- This is not a good time make rules too restrictive.
- Limit the number of slotting iterations that are run with the software.
- Software is not perfect and will not slot every item. Be ready to have manual intervention. Typically, you can expect to manually slot 2% of SKUs.
As you consider your particular operation,
here are a few additional thoughts:
- Slotting software can be more beneficial when working in a complex environment.
- It's a good idea to spend time up-front to audit and “scrub” SKU data.
- Minimize the number of storage configurations – keep it simple.
- Be sure to understand data needs and constraints.
It’s Time to Reslot If You See:
- Increased replenishments
- Increased pick travel
- Deviations from routes
- Increased order cycle times
- Increased damages
- Increased late shipments
- Changing sales patterns
- Changing sales channels
- Changing inventory patterns
- Seasonal patterns
We have a solution
Most ERP software systems were not designed to deal with the complexities of the warehouse and supply chain.
Our WMS software system provides the functionality to support warehouse management within your existing ERP framework. COLLECT® WMS software will meet the challenges of your simple to complex warehouse management needs while preserving your existing financial investment in business software.