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 management toolbox?
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.