Warehouse Slotting: Definition, Benefits, and Best Practices
Planning and organization are the cornerstones of a successful warehouse. When a company’s inventory products are in their proper locations, pickers can quickly assemble and dispatch orders, increasing productivity and overall efficiency.
This article explains warehouse slotting, its benefits, and best practices.
What Is Slotting?
Slotting refers to organizing warehouse inventory to maximize the efficiency of the warehouse, and it can also lower total warehousing operational costs and enhance inventory management procedures.
Different businesses use various methods when slotting their warehouses. Many companies use inventory product characteristics such as size, weight, type, order history, stockkeeping units (SKUs), and seasonal forecasts.
Micro vs. Macro Slotting
There are two categories of slotting: macro and micro.
Macro slotting involves optimizing the layout of the entire warehouse.
Micro-slotting is focused on the precise positioning of individual items, from the allocated SKU area to its unique storage medium. The main objective of micro-slotting is to ensure the proper positioning of SKUs along the pick path. The pick path is the path followed by pickers to undertake warehouse operations.
The primary goal of both macro and micro slotting is to enhance warehouse efficiency and maximize space utilization while minimizing the time it takes to complete a task and avoiding mistakes when identifying items.
Benefits of Slotting
When done properly, warehouse slotting can offer several benefits. Here are a few.
When a company efficiently slots items in a warehouse, they will occupy less space, creating additional space for other products.
With slotting, even a small warehouse space can accommodate many items, eliminating the need to contract a big warehouse to store its inventory products, and reducing the overall operational costs of the business.
Reducing operational costs is one way that companies can become more profitable.
Additionally, optimized storage allows businesses to create more space for their popular inventory goods to meet their clients’ demands. This improvement can boost sales and expand product lines because there is space to store them.
For easy identification, warehouse workers often group similar items together based on their size, volume, and weight. When pickers arrive at the warehouse, it is easy to find inventory for their tasks, allowing them to be more effective.
Efficient warehouse slotting can also protect items from damage. During this process, the warehouse staff places lightweight items at the back and heavy items at the front of the line. This way, when pickers come for the goods, they will start by placing heavier items at the bottom and lighter ones at the top, reducing the likelihood of damage during transit.
Another significant benefit of warehouse slotting is reducing the chances of making mistakes because the warehouse staff usually put items with similar characteristics together.
Warehouse slotting allows warehouse management to map the full cycle of product flow and easily identify low, medium, and fast-moving items. This allows warehouse managers to distribute work and enhance employee job satisfaction.
Improved Employee Productivity
Companies can improve their employees’ productivity using warehouse management planning. A good slotting strategy reduces the time and effort spent carrying out repetitive tasks. It creates the quickest pick path to complete tasks by placing SKUs in the pickers’ most common spots, minimizing guesswork and travel time while boosting efficiency.
Efficient Use of Equipment
Different items in a warehouse require different moving equipment. However, the use of machines in a warehouse can cause chaos and delays when one machine has to wait for the other machine to complete its task or to move and create.
Slotting allows companies to place items that need the same moving equipment together, eliminating delays.
Storing high-volume goods close to the picking station minimizes the time pickers spend going back and forth to the appropriate shelves to pick items with a similar SKU.
Improved Customer Satisfaction
The main goal of any business is to make its customers happy. Proper slotting makes your business more efficient and reliable, ensuring consumers receive products on time and damage-free. This enhances customer loyalty and can lead to new customers and increased sales.
Slotting Best Practices
There are several factors that you should consider during warehouse slotting to make the process easier and more effective.
One of the best slotting practices is arranging items according to SKU velocity. SKU velocity refers to how fast items move (or are sold).
Generally, companies should place slow-moving items at the back and fast-moving items at the front where staff can easily access them. This reduces the travel path, enhancing the efficiency and productivity of employees.
The best way to determine the velocity of warehouse items is by using the ABC slotting method. With this process, companies list all the SKUs they have fulfilled throughout a specific time frame, preferably 30 days. Companies can also choose a shorter period, based on their preference.
After that, use the order line numbers to sort the list. Designate “A” to the items in the top 50%, the next 25% as “B,” and the final 25% as “C.” When slotting a warehouse, place the items designated as “A” at the front, followed by “B” in the middle and “C” at the back.
Another factor that should be considered when slotting warehouse items is the storage systems in place. If a warehouse contains high-security items, companies should store them together in a secure zone. They should also group items that require specific temperature requirements in a temperature-controlled zone. Potentially harmful items should be kept in separate storage.
Adjust to Seasonal Changes
SKU velocity regularly changes according to seasons. For instance, some items move quickly during summer, while others sell slowly during winter. Understanding seasonal changes and how they affect sales can help companies to slot their warehouse properly, supporting efficiency throughout the year.
Companies can prepare ahead of time and place those items closer to picking locations if they can accurately predict seasonal demand changes.
Some products are often purchased together. Slot these items close to each other to boost productivity by making it easy to access these items.
Tips for Increased Efficiency
Warehouse slotting can improve a company’s operations. To gain even greater efficiency in a warehouse, consider these best practices.
Get Feedback From Pickers
No one understands how effective a company’s warehouse slotting strategies are more than pickers. Ask the pickers for feedback about their experience in the warehouse and identify the areas of improvement. It is a good idea to ask pickers about the improvements they think would enhance efficiency.
Regularly Review Your Slotting Strategy
Slotting strategies require updating as seasonal trends change. Companies can do it monthly, quarterly, semi-annually, or annually, depending on their preference or business needs. Re-slotting may be necessary for a specific zone or the entire warehouse if there is a major change in sales demand or a decline in efficiency.
Consider a Warehouse Management System (WMS)
Using a WMS is another way to enhance warehouse efficiency. Using WMS technology, pickers can utilize wearable or handheld devices to quickly find where an SKU is kept instead of relying on a list of SKU numbers on a spreadsheet.
Store Your Inventory in a 3PL Fulfillment Center
Slotting can be difficult if a warehouse does not have the proper personnel and technological resources. To avoid these problems, e-commerce companies outsource warehouse management to third-party logistics providers, known as 3PL companies. They handle everything from inventory to order management. Companies can focus on other value-added work knowing their products are being handled efficiently by a 3PL partner.
Warehouse managers should make safety the top priority during warehouse slotting. It is important to ensure staff members receive training to handle heavy or dangerous objects. Also, use slotting materials that can withstand frequent heavy use and keep them out of the way of forklifts.
Keep the Warehouse Clean and Organized
Effective warehouse slotting involves organizing items at a slot level, but there are other factors to consider. Remember to label all bins, pack all items properly and remove all packaging material blocking up pathways.
Strategize a Picking Sequence
Another effective way to create a warehouse slotting strategy is by establishing a picking sequence. It helps determine which items to pick first or last, enhancing the speed and accuracy of workers in completing their tasks.
Regularly Review Your Facility Flow
At some point, a business may grow and have more items flowing into its warehouse. Companies should review the flow of items into their facility to determine the best action to take given recent changes.
Here are the frequently asked questions about warehouse slotting.
What is a slotting process?
Slotting refers to the process of arranging warehouse inventory to enhance its efficiency. It involves analysis of a company’s inventory, or SKUs, including item size, weight, and seasonal projections.
What is ongoing slotting?
Ongoing slotting arranges a warehouse to maximize available space depending on product type or SKU units, which will make order picking fast and efficient.
What is slotting optimization?
Slotting optimization allocates each SKU to its most beneficial location within a warehouse facility.
Slotting is a perfect opportunity to enhance your warehouse’s efficiency. It can help you streamline your workflow, improve productivity and maximize the available storage space. The best thing about it is that you don’t have to spend much money and it won’t take much time.