Benefits Of Slotting

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• Do you have plans to build a new warehouse or expand your current warehouse?
• Are you running out of warehouse space to properly store products?
• Do you have insufficient storage systems to meet inventory needs?
• Would you like to optimize your picking and putaway strategies?
• Is travel time accounting for more time from your pick replenishment labor hours?
• Are pick rates not in line with industry standards?

If you have answered YES to any of these questions then you could benefit from slotting. There are several potential cost savings that can be attributed to the implementation of a slotting application. These cost savings include:

• Increased productivity – Travel time can often account for up to 60% of a picker’s daily activity. A good product slotting strategy can reduce travel time thereby reducing picking labor. A faster pick rate leads to lower labor costs.

• Maximized space utilization – It is important to make sure that product is stored in the right size location to maximize cube utilization. Periodic re-warehousing as inventory levels change is one way to continually re-optimize the available space. An assessment of current storage media may reveal an opportunity to increase storage density. A move to smaller locations can dramatically increase cube utilization. The management of the cube can maximize the utilization of space within the warehouse, thereby reducing operational costs. By ensuring that items are placed in properly sized locations, more products can be more easily stored in a cube.

• Reduced operational costs – Product slotting is often the biggest hidden opportunity to reduce labor costs. Slotting refers to placing products in the optimal equipment and location to maximize the use of space and labor. The issue of slotting affects the two largest labor pools: picking and replenishment. By sizing the pick face location based upon a standard unit of measure (case, pallet) for the product in question you can significantly reduce the labor required to replenish the location. Ongoing slotting is efficient when done with a slotting program, and the return on this investment is typically less than a year.

• Improved worker safety (Ergonomics) – High velocity products are placed in a “golden zone” to reduce bending and reaching activity. Heavy or oversized items are placed on lower levels in the pick zone or placed in a separate zone where material handling equipment can be utilized. Typically, just 20% of the total active products account for 80% of all picking activity. These top-moving products should be located in the most ergonomic locations and in storage equipment sized appropriately to reduce stock-outs and minimize replenishment labor. These products should then be balanced across picking zones to decrease congestion and further boost picker productivity.

Product placement must be regularly reviewed and maintained. The amount of change in SKUs and their movement is the primary factor in determining the optimal frequency for updating placement, but this must be balanced against the material handling effort required to relocate the items.

Sample Slotting Strategies

1. Catalog Company – with very dynamic inventory: May chose to review all products just before the release of a new catalogue. Initial placement would be based on projected sales volumes. Between catalog drops they could review the slotting on a weekly basis and move any items that are very badly placed because the actual sales did not match the projections.

2. Hard Goods Distributor – with relatively static inventory: Might opt to re-profile all items on a quarterly basis. New items would be slotted based either on projections or sales of similar items. Proper slotting does take time to establish, and regular maintenance is required to keep items positioned properly. But slotting software can ease the burden of keeping items in proper locations.