Warehouse Slotting: When is it Time to Reslot

​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, improves distribution productivity by 8% to 15%, and can yield up to 30% space savings.  Understanding the issues and opportunities with a hits and movement analysis is possible by mapping it out or following pickers. Even so, it's easy to overlook the genuine value of slotting and underestimate its impact on productivity.
What is Slotting:
Slotting (profiling) is the strategic grouping and location assignment of items to optimize the total distribution operation balancing:

• Putaway
• Picking
• Replenishment
• Shipping
• Customer service commitment

Slotting assigns each item to a discrete location based on balancing these conflicting goals
Why Does It Matter?
Poor slotting is an operation's “silent killer” and impacts your entire picking operation.

• Productivity
• Quality
• Throughput
• 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 impact customer service.
Here are questions to help you identify trends and determine if your warehouse requires 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 are you experiencing a space crunch?
• Are storage systems insufficient to meet inventory needs?
• Do you see excessive travel time or observe backtracking in your warehouse?
• Do pickers frequently travel into and out of other zones or aisles?
• Do “bottlenecks” exist in your pick paths?
• Are pickers choosing their 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 answer the questions with a “yes”, you are already considering slotting your warehouse. 
That being the case, here are additional tips to keep in mind as you make your plan: 

1. Don’t expect to hit the ground running using slotting software as an easy fix.
2. Putting too much faith in the existing SKU data will lead to disappointment.
3. Keep an open mind to exploring new rack concepts.
4. This is not a good time to make rules too restrictive.
5. Limit the number of slotting iterations run with the software.
6. 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 auditing and “scrub” SKU data.
• Minimize the number of storage configurations – keep it simple.
• Be sure to understand data needs and constraints.

Summary:
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. WMS software will meet the challenges of your simple to complex warehouse management needs while preserving your existing financial investment in business software.