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How Slotting Optimization Software Increases Labor Efficiency & Lowers Operating Costs

In 2016, finding qualified workers, like pickers, was among the top concerns of 41 percent of warehouse managers, reports Roberto Michel of Modern Materials Handling magazine. Unfortunately, this concern appears to be growing stronger with each year as e-commerce and the demand for omnichannel fulfillment grows. However, slotting optimization software is poised to meet these demands by increasing labor efficiency and lowering operating costs in several key ways.

  1. Slotting Optimization Software Enables Cross-Training of Employees for Better Throughput.

Employee roles in warehouses tend to be static. For example, a typical warehouse may have fast movers and slow movers to address different types of orders. While this may seem ideal, it leads to higher labor costs when both types of employees are not fully utilized. As explained by Chris Arnold of Supply & Demand Chain Executive, slotting optimization software can lead to better cross-training of employees, ensuring maximize employee utilization throughout peaks and lulls in specific order types.

Consider a warehouse execution system (WES). The WES enables automated processing of dynamic workflow adjustment. In other words, the system can assign duties to employees that would not have otherwise been working. As a result, labor costs that are not generating profit are eliminated. This can be especially crucial with rapidly changing buying trends too.

  1. Automation in Slotting Optimization Decreases Operating Costs.

Aside from labor costs, operating costs may include wear and tear on equipment, utility consumption and payments to vendors, carriers, customers or other business-to-business (B2B) partners. Among carriers, having a higher volume of shipments naturally leads to better shipping rates. In other words, it is more cost-effective for carriers to ship as many products as possible on each shipment. For warehouse managers, this means getting more products fulfilled per shipment with a carrier can lead to decreased operating costs.

  1. Strategic Slotting Promotes Faster Setting and Re-Setting of Warehouses.

Strategic slotting systems also help warehouses meet sudden or expected changes in product demand. For example, demand changes in seasonal products may require the re-setting or warehouse slots. Unfortunately, not handling this process efficiently and with an eye on optimization will eat away at profit margins. Thus, slotting optimization software is ideal for seasonal changes, reports Manhattan Associates. Additional ways slotting software increases warehouse efficiency include the following:

  • Strategic grouping of items orders together for faster shipment.
  • Better understanding of product cycles.
  • Creation of rules to determine optimal warehouse slotting configurations to meet changing demands among customers and B2B partners.

Put Your Team on the Path to Success by Utilizing Slotting Optimization Software.

As new technology evolves, slotting optimization software in warehouses will grow easier to use and more efficient. You owe it to yourself, your team, your B2B partners and your customers to make sure your warehouse utilizes an advanced slotting optimization software. If you are still unsure about it, just think about how these direct benefits could boost your profit margins.