Proper slotting is essential to improving efficiency, reducing costs and increasing profitability in warehouses and distribution centers. While many different models suggest one form of slotting optimization over another, there are many ways to optimize slots. However, the key to achieving the right slotting optimization lies in understanding specific trends and patterns in product flow. In addition, several slotting optimization technologies exist to make the process easier, and you need to understand their benefits and key differences.

Slotting Optimization Technologies Must Be Based on Speed and Replenishment.

Slotting can be based on ease and speed of replenishment. Slots are organized by their ease of access in replenishment. In a sense, this will ensure fast-moving SKUs are accessible and slow movers do not impede overall operations, reports Josh Bond of Modern Materials Handling. Furthermore, any slotting optimization system should start with the fastest moving products being most accessible.

Dynamic Systems Promote Product Variability.

There are times when a company’s existing slots need rearranging to make way for new, innovative products. Unfortunately, fixed and dynamic slotting programs can result in issues.

For example, dynamic systems allow for new slotting locations as pick speed changes. However, dynamic slotting may lead to the misplacement of items in areas that are not easily accessible. Meanwhile, fixed slotting results in disorganization from progressively increasing the number of unique products in a warehouse. Moreover, dynamic slotting may result in an inefficient number of total slots compared to a fixed slotting system.

Move Forward Reserve Inventory to Support Slotting Optimization.

Although forward inventory is supposed to refill pick bins at once, it does not necessary happen that way. As a result, dynamic or fixed systems must take forward reserve inventory into account when organizing or optimizing existing slotting practices. Paired with increased need for available slots in dynamic systems, the impact of unmoved forward reserve inventory can be dramatic. So, warehouse managers must ensure systems consider forward reserve inventory when making any change to slotting organization.

Slotting Designed Around a Warehouse’s Primary Functions.

While a warehouse’s primary duty is to store products, it is important to remember the other activities that take place. Where are orders processed and packed? How are they moved to the loading dock, and what other facilities may be on the same premises?

These questions reflect key aspects of design that may influence slotting optimization. In addition to considering both the advantages and disadvantages of the previously mentioned slotting optimization techniques, warehouse managers should arrange slots around existing building designs, asserts Paul Hansen and Kelvin Gibson of Supply & Demand Chain Executive. This means putting fast-moving products closer to packaging stations or putting larger, more expensive items closer to loading decks.

The Big Picture.

Slotting optimization technologies should not be something you review with an annual report. Slotting optimization is an ongoing process that requires careful analysis of existing trends and patterns in your warehouse, and by understanding the best slotting optimization technologies, you can position your operation to grow and stay competitive. In fact, new supply chain technologies have been designed to manage slotting optimization automatically, so you can focus on shipping more products and meeting consumers’ expectations.