Think of your kitchen cabinets. If you keep putting groceries in it without any thought, will you be able to find what you need quickly? Without a few things falling off the shelves?
Now imagine this chaos at a bigger scale in a warehouse. Managing a warehouse becomes increasingly complex as the scale of a business grows. That’s why a business cannot run its warehouse smoothly without warehouse slotting.
In this blog we’ll understand what warehouse slotting is, what are its benefits, how to implement it and its best practices.
Let’s get started!
What is Warehouse Slotting?
Warehouse slotting simply means organizing inventory in the warehouse in such a manner that it improves operational efficiency, maximizes space, and saves costs.
The slotting process involves strategic planning considering the specifications of the various items to be held in the inventory. Though it helps in increasing the speed of the workflow, safety considerations cannot be compromised. Hence, warehouse slotting involves balancing various priorities.
Benefits of Warehouse Slotting
Efficient space utilization
The biggest benefit of warehouse slotting is that it optimizes warehouse space. It helps you get more out of the finite space available. It enhances the storage capacity of the warehouse just by efficiently organizing the inventory.
Improved productivity & faster order fulfillment
When items are organized in a planned manner, the warehouse employees are able to locate the items easily. They are able to pick and pack an order quickly as they spend less time running back and forth. It helps in shipping out the orders at a faster rate and delivering them to the customers.
Another way to improve order fulfillment speed is to use route optimization. Because once the order is out of the warehouse, you still need to ensure that it reaches the destination on time so that the efforts of warehouse staff are not wasted.
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Reduced inventory cost
Warehouse slotting provides you with improved visibility of the inventory levels. So you carry the optimum amount of inventory and avoid overstocking. By making the most of your present warehouse, you save the money you would have spent on renting a larger warehouse. Also, you save on the labor costs as the staff becomes more efficient. All these savings lead to reduced inventory carrying costs.
Read more: All You Need to Know About Inventory Turnover Ratio
Lesser errors & damages
When the inventory is organized in a logical manner, it reduces the manual errors in picking the items and improves accuracy. It also reduces damage to the items as thoughtful consideration is given to the weight and size of the item as well as the slot. For example – heavier items will be placed at the bottom of the pallets and lighter items will be placed on top.
Steps for Warehouse Slotting
- Step 1: Analyze the warehouse layout
The first step in the warehouse slotting process is to understand the warehouse layout and the storage capacity. Have a look at the shelves and map out which areas will be used for storage and which will be used as aisles and packing areas. Discard any waste packaging material lying around the warehouse. - Step 2: Prioritize warehouse slots
Once you have an understanding of the slot locations, you need to allocate priorities to them. Priority can be based on any criteria. For example if the priority is item velocity then fast selling items will be placed closer to the packing area. Another priority could be item size, as per which larger size items will be closer to packing and loading area for minimum movement. - Step 3: Characterize items & slots
You need to consider characteristics like weight, size, strength, material and shape of both the items as well as the slots. For example, organizing fragile items on top shelves may prove risky. Similarly, slotting heavy items on slots that are not strong enough to bear their weight may lead to damages. - Step 4: Document the slotting strategyOnce you’ve created a slotting strategy, it’s best to document it so that everyone is aligned and understands it. It will help the staff in their day to day operations and will also come in handy when the stock is to be replenished.
Warehouse Slotting Best Practices
- Slot by SKU velocityVelocity means the amount of time an item spends in the warehouse. Some items will be fast-moving and some will be slow-moving. It will make sense to keep fast-moving items at more accessible locations compared to slow-moving items.
- Slot by demand correlationUsing the historical order data, you can analyze and understand correlations between different products. Items that are usually ordered together can be placed close to each other.
- Consider storage mediumSome items may be stored as single pieces or in cases or by the pallet. Pallets will have to be picked by forklifts. Allocate slot areas as per storage mediums so that forklifts can be limited to a specific area.
- Seasonal fluctuationsItems can be moved around as per seasonal demand. For example, christmas decorations can be moved to the front closer to the holiday season.
- Special storage requirementsCertain items may require special storage. For example high value items may be stored in a unit that has locks on it. Certain items may need to be stored at specific temperatures for which separate zones can be created.
- Get feedback from pickersTake feedback from the pickers regularly as they are the ones following the slotting strategy on ground. Their feedback will help you identify the areas that require improvement.
Conclusion
Warehouse slotting may seem complex but you have to carry it out keeping improvement in efficiency as the ultimate goal! It’s not a one-time activity. You have to keep it dynamic. Consider re-slotting depending on business requirements and feedback. Remember, there’s always a scope for improvement!
