Ask any consumer goods warehouse or distribution operations manager how they feel about inventory slotting, and chances are you’ll get a groan, grimace, or heavy sigh in response. That’s because — while the labor efficiency and picking productivity benefits of slotting are widely understood — the amount of work it requires, particularly in a conventional facility, can be overwhelming.
The slotting process includes continuously assessing and classifying each stock keeping unit (SKU) in existing inventory based on how frequently it is ordered and picked. Depending on its velocity, each SKU is deemed a fast, medium, or slow (A, B, or C, respectively) mover and assigned to a specific location within the facility depending on how often it is picked.
- Fast (A) movers are placed in forward pick zones, closest to packing and outbound shipping. This minimizes the amount of walking associates must do in order to retrieve them and fill orders. Replenishment stock is typically held nearby in reserve storage for easy access as needed.
- Medium (B) movers, which are ordered less often than fast movers are kept in an accessible area that does require some travel to access, but not an extensive amount.
- Slow (C) movers, or those that are rarely required to fill orders, are stored in the least accessible area of the facility.
In addition to helping place inventory by the rate at which it moves through an operation, slotting can also direct the placement of an item to improve picking ergonomics by putting the fastest moving or the heaviest items at the most ergonomically accessible level (typically waist high to minimize frequent bending or reaching). It can also ensure that items commonly ordered together (toothbrushes and toothpaste, for example) are stocked together. Additionally, slotting can disperse the most popular products across multiple picking zones to minimize congestion as pickers work to fill orders.
And yet, despite the advantages, slotting still requires effort both in the process of determining how to redistribute product and in the actual act of moving them around. For many operations managers — particularly those that have struggled to keep up with increasing supply chain disruptions, volatile consumer demands, rapidly shifting SKU velocities, labor shortages, rising wages, and more over the past 24 months — the thought of adding what feels like an internal housekeeping task to the herculean effort it takes just to move stuff out the door can be incredibly daunting.
However, those market challenges are further complicated by the current lack of available warehouse space as the backlog of shipping carriers remains and transportation bottlenecks and capacity shortages continues. With square footage at a premium and a limited workforce, it’s become more important than ever to maximize and optimize every inch of space. Slotting provides a reliable means to that end.
Ready. Set. Slot.
Depending on the level of automation within an operation, slotting can be a challenging process. Here are a few ways to take out some of that pain:
- Invest in software. While it is possible to assess SKU velocity on paper or with a spreadsheet for smaller facilities handling fewer items, larger operations with higher SKU counts will benefit from software. There are specific software programs — either standalone or integrated as a module to a warehouse management system (WMS) — available to help streamline the process. The software will not only analyze how often each item is ordered but also will assess the current floorplan to determine and assign a specific location for it. Further, the slotting analysis can be performed automatically and continuously by the software in real-time, allowing managers to focus on other priorities.
- Work slotting into picking and putaway moves. One of the benefits of allowing slotting software to analyze and determine the optimal location for inventory is that it can also be programmed to interleave the moves into other assigned tasks. Whether associates are outfitted with a paper pick list, a radio-frequency scanner or tablet, or a voice-directed picking system, the movement of a SKU from one location to another simply becomes part of their sequence of travel as they perform picks and putaways through the facility.
- Collect accurate SKU data. Having accurate inventory data is critical to this process. Operations that are picking eaches and cases will need to populate their inventory database with dimensional data about every item individually. Details include how many eaches fit into a case, the case dimensions, how many cases fit in a given storage position or on a pallet, and so on. This can be accomplished at the point of receiving with a tape measure but is more efficient and accurate with an automated dimensioning system. Based on the information, the slotting software can more accurately pinpoint the optimal location for each SKU based on its unit size.
- Let the automated system slot for you. If your operation has invested in an automated storage and retrieval system (AS/RS), either crane- or shuttle-based, the integrated control software will interface with the WMS to determine the optimal storage location of a given SKU within the system and make moves accordingly. In most operations with an AS/RS, the fastest moving items are often located outside of the automated system in a forward pick zone to maximize pick speed. But medium movers (and sometimes slow movers) within the automation will be placed closer to or further away from the retrieval mechanism’s dispensing point depending on their velocity — no human intervention required.
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John Knudsen, Project Director, email@example.com
With A 25-year veteran of the material handling industry, John has worn many hats in business modeling, process and system concepting, system design, project management and implementation, operational improvement, and is now Project Director within our Consulting Department. Outside of the office, John loves to fish and hunt, and is into traveling and spending time with his family.