Warehouse & Distribution Centre Process Improvement
Logistics Bureau works across many industries in the area of process improvement, particularly in Distribution Centres (DCs). Our consultants are able through process, equipment or layout changes, to deliver significant benefits in the areas of:
- Space utilisation
- Order fulfillment accuracy
- Headcount reduction
- Product throughput velocity
- Cost reduction
- Service improvement
Many of our customers request that we assist them in modeling the capacity, or 'useful life' of warehouses and distribution centres. This can be a critical step in understanding the future needs of a growing business, and assessing the alternative methods of handling that growth.
Capacity models can be built to meet the specific needs of your business, and typically take account of the following:
Product master data
Key Capacity Drivers
Order picking needs
Key Process Capacity Estimation
Assessment of Capacity Extension Options
Improved DC processes
Changed shift patterns
Better use of the storage 'cube'
Altered supply processes
Extensions to existing buildings
For a more detailed discussion on these services, feel free to make direct contact with the following Logistics Bureau staff:
Sydney - Mal Walker
Tel: +61 412 271 503
Melbourne - John Cole
Tel + 61 411 706 726
SE Asia - Colin Airdrie
Tel: +66 819 464 490
What is Slotting and why is it an important productivity tool?
Slotting is the shorthand term for the process of allocating product, (SKU’s), to locations in the
Warehouse according to business rules and product characteristics. It is normally restricted to the
picking face or on-line locations only however it can impose some general rules for stock location in the bulk areas in order to increase replenishment efficiency.
High level Slotting is a minimum requirement for the implementation of a new facility. Detailed
Slotting is relatively rare in either new or existing operations. In the infrequent times that Slotting
is mentioned in trade articles claims of significant productivity gains are made. (See “Modern
Materials Handling January 16 2006”).
Why should you be considering slotting in your business?
- You are rearranging your current warehouse layout
- You are building a new facility
- You are attempting to reduce your warehouse operational costs
- You operate in a seasonal industry which drive different product demand cycles during the year
- You want to decrease the movement of warehouse staff around the warehouse
- You want to reduce product damage within the warehouse
Business returns on regular detailed slotting programs can include:
- Improved order picking efficiency
- Reduce product damage
- Increase replenishment and put-away efficiency
- “Health Check” of the design of the pick face
Improving order picking efficiency
Picking productivity can be improved by Slotting product according to movement characteristics.
Fast movers can be located closer to conveyors and aisles to reduce travel, and in easy to
access locations, (sweet spots). Items that are regularly picked together can be located in adjacent locations. In larger pick to conveyor systems picking activity can be balanced by zone ensuring there is even product concentration and reduced congestion in pick zone.
Reduced product damage
Product damage can be reduced by allocating locations according to SKU characteristics, (e.g. keeping fragile items away from carton live storage, ensuring that heavy items are located in a sweet zone etc). Heavy items can be placed at the beginning of pick runs ensuring that they are placed on a pallet or in a tote/carton first to eliminate crushing of other product.
Increase in replenishment and put-away efficiency
Rules on the quantity to be held at each SKU’s location can be set, (e.g.” There must be a
minimum of one week’s stock and the location capacity and replenishment point must allow the minimum replenishment quantity to be a carton lot”,) This will reduce the replenishment frequency and ensure that stock does not need to be held in an interim location because of lack of location capacity.
Operations with a large number of SKU’s usually have product or family groups that are supplied by a single or few suppliers. Slotting can allow the grouping of these products within areas of the pick-face reducing the travel required to replenish directly from receipt. Although the bulk stock maybe kept in random locations these can also be split into areas and particular supplier’s SKU’s located randomly but in areas close to their pick-face locations.
“Health Check” of the design of the pick face
Continual Slotting will highlight any mismatch between the pick-face configuration and the
requirements of the SKU range, throughputs and Slotting rules. Change is inevitable and what was required when the pick-face was designed and installed is more than likely unsuitable for the business profile years ahead. Slotting can allow companies to recognise the mismatch and balance the costs of the resulting inefficiencies and the capital required to re-configure.
With all the advantages it offers why is Slotting missing from the operation’s
Slotting is not a panacea, and to be effective needs the support and input from areas other than the warehouse operation.
Slotting requires the analysis of accurate SKU and transaction data. The SKU data, usually the
Product Master File, (PMF), must be maintained and changes in packaging, dimensions and units of sale etc. captured before the product hits the floor.
This in turn requires the implementation and enforcement of supplier standards and protocols for the introduction of new products. Buyers/marketing should supply estimates of likely demand for all new products. S&OP must be on the ball so there are no surprise promotions etc.
Accurate data on the configuration of the pick-face with location dimensions, types and
numbering systems is essential.
Slotting is a valuable tool; however with the exception of facilities that support campaign sales, it is not a constant requirement. Normally slotting can be done at seasonal changes or every quarter. This irregularity of requirement generally makes it easy to put Slotting on the back burner until there are no fires to fight, and not surprisingly this never happens.
The re-slotting of an entire pick-face is an expensive time consuming business. The approach should be that only those SKU’s that are the most badly located are identified and re-slotted in each slotting exercise. Seasonal changes, (out with the sun tan products in with the cold and flu SKU’s), should be planned in advance and the requirements factored into the initial pick-face configuration.
What tools are available for me?
There are Slotting software tools available. The major WMS suppliers normally have a slotting module in their software suite. There are stand alone programs, of varying capability, available.
What can I do for my business?
Slotting applications can be expensive to purchase and require highly technical skills to operate. But the rewards are available for those that persevere. At LB we can provide a fully outsourced service which can provide you with slotting recommendations depending on they type of operation you are running. If you would like us to audit a new warehouse design, come and undertake a one off slotting review of your current setup or assist in a seasonal manner to cope with your business changes we can assist you.
Order Picking is the productive operation in a warehouse operation. Any warehouse design exercise that doesn't include a rigorous approach to designing the processes and equipment layout for Order Picking, is suspect.
When we Order Pick we are essentially “manufacturing” what the client is going to pay us for. It’s obvious, but probably worthwhile stating that, if it takes too long the costs increase and profitability fall, if we get it wrong the client does not get what we want him to pay for.
If we discount full pallet Order Picking, we mainly see two types of Order Picking operations or a combination of:
- Split Case where cartons are opened and some of the contents picked and packed for despatch to the client.
- Full Case where full cartons are picked and assembled into orders
Split Case Order Picking is the operation where items are taken from a carton or case, in order to fulfil a client’s order. In some operations the items are unpacked and placed into tubs or bins before presentation at the pick-face to facilitate the Order Picking process, (most common in “Goods to the Man” operations).
Given that in Full Case Order Picking we can take a full carton from a a pallet and place it on another, or a conveyor, to pick that portion of the clients order, and charge them for the units contained in that carton, whereas in Split Case Order Picking we must open the carton, count out the required units and repack them, charging the client for only that part of the contents of the carton, we can see that Split Case Order Picking Operations attract more costs than Full Case.
Split Case Order Picking process design should concentrate on the three main ways of increasing productivity, reducing or eliminating operator travel, increasing accuracy of the picking and increasing the speed of picking.
Reducing the operator travel is achieved by pick-face design, using specialised equipment, (e.g. Carton Live Storage), creating picking zones and process design. The location of SKU’s in the pick-face or slotting is important here as well, (See the “Slotting” article above).
Accuracy is enhanced by pick-face design, slotting, systems such as Radio Frequency Data Terminals, Pick to Light and Pick to Voice. A properly designed order picking document can also increase the accuracy of the Order Picking operation.
The speed of the picking can be enhanced by all of the above and efforts to eliminate the time wasted in finding a SKU, confirming the pick and waiting for stock need to be made.
Split Case Order Picking is a complex process and the level of customer service a company delivers is dependant on it being error free and timely. The profitability of the warehousing operation can be enhanced by ensuring that the Order Picking operation is well designed and supported by the other processes.