Effective Slotting – your next step in warehouse management cost reduction

Posted on 2021-07-07

Rina Redelinghuys, CQuential WMS Customer Services Executive reveals the challenges involved in the complex warehouse management environment and how they are met – Part 2

Part Science – Part Art

What is slotting?

  • Warehouse slotting is the process of analysing inventory data for the purpose of organising and categorising throughout the warehouse
  • Slotting ensures that each product in the warehouse is allocated to the correct location – which is one that will drive operational efficiencies
  • It also ensures that the right product is in the right place at the right time during the processing of warehouse procedures.

The benefits of slotting within the warehouse:

  • Improved productivity:
    • Picking
    • Put away
    • Storage
    • Shipping
  • Improved profitability
  • Better picking speed
  • Order processing
  • Save as much as 10% on labour costs
  • Increase floor space
  • Reduced capital investment.

Approach to slotting

The key to slotting is following the right approach and considering all factors before agreeing on how products will be slotted within the warehouse.

There are a few tips below that should be considered:

  • Product evolution and rotation – static, expanding, and contracting inventory
  • Seasonality – predictable adjustments of stock quantities and positioning
  • Demand fluctuation – non-seasonal influences on inventory movement
  • Labour force – staff utilisation and costs
  • Warehouse geography – layout efficiency and the actual utilisation of space.
  • 20-80% approach in which the fastest moving 20% of the SKUs are placed in the most accessible area
  • The remaining 80% must be assigned to a bin, case, or pallet point in descending order of accessibility plus an ascending order of ‘cost per pick’. This logic relates to the cumulative cost of storage, replenishment, movement in and out of the facility, picking time, and travel – essentially the relative share of all the costs involved in the storage and handling
  • SKU velocity
  • Keep warehouse clean and organised
  • Assess your storage capacity carefully
  • Rank slots by Priority for Easy Accessibility
  • Consider Characteristics of the slots before assigning
  • Think of employee safety.

To summarise – slotting impacts deployment of the workforce, the allocation of available space, the service rendered to clients or customers and ultimately, the profitability of the enterprise. In creating or modifying a slotting solution a matrix of factors apply that should be revisited periodically. Sometimes modest adjustments will be needed, but at others, major reconfiguration will be deemed essential.

Optimised Picking Processes

The picking process can consume most of the resource time in the warehouse if not carefully planned.
The following are just some thoughts of what needs to be considered when determining the picking strategy of the warehouse:

  • The types of customer orders
  • The profile of customer orders (full pallets / lose items etc.)
  • The racking configuration
  • The available MHE in the warehouse
  • Placement of your fast / medium and slow movers
  • Material flow within the warehouse
  • The physical layout of the warehouse
  • Prioritise urgent and VIP orders first
  • Don’t mix your SKUs
  • Keep SKUs that are often selected together, close together
  • Arrange items in batches or clusters (to enable more than one collection at a time)
  • Avoid vertical picking wherever possible
  • Keep your fastest stock in the golden zone, horizontally
  • Keep slower stock vertically
  • Ensure all your stock is clearly labelled
  • Store inventory in the most appropriate storage facility – whether that is a bin or a pallet.

Types of order picking strategies

  • Pick and pass
  • Parallel picking
  • Wave picking
  • Batch picking

In closing it’s key to select a picking strategy that meets your current and future requirements – doing so can save a lot of time and resources. It will also make the warehouse a lot more efficient and will enable you to deliver against all the customers’ requirements.

Again, the key to warehouse cost reduction is basing suggestions and solutions on data gathered from the operation. A best of breed warehouse management system will allow for this data collection in real-time so accurate decisions can be made when further optimising warehouse processes.

The Right Technology

Technology is becoming a necessity in the supply chain and specifically in warehousing. Without the right technology the company will not be able to compete effectively. The warehouse can be a complex environment but if the right technology is selected all these processes can be simplified and made to become highly efficient.
The best of breed warehouse management systems will drive the following benefits within the facility:

  • Streamlined processes
  • Improved inventory accuracy
  • Reduced labour costs
  • Accurate demand forecasting.

The key is to bring together processes/people and technology to get the ultimate results from the warehouse.

Considerations when selecting a WMS vendor:

  • Flexibility
  • System proven reliability
  • Availability of real time information
  • Consider ROI
  • Does the vendor have a product roadmap?
  • Availability of support
  • Ease of use being an operational system

Warehouse management systems have evolved and become more sophisticated over time. Have you considered the installation of RFID portals at strategic points throughout your warehouse? This facilitates finding misplaced inventory much faster thereby saving on labour costs. You may also wish to consider the advantages of a voice-directed picking system, which uses speech recognition to communicate with your WMS, further streamlining warehouse processes, ‘put-to-light’ and ‘pick-to-light’ systems, also allow for speedy and paperless picking.

In closing technology will allow you to scale the business and enable you to measure the actual productivity of the warehouse which ultimately drives warehouse efficiencies and sustainability.

Watch out for my next piece when I will deliver important tips on how to prevent warehouse theft.

In case you missed it – also read: Challenges posed by the complex warehouse management environment and how they are met – Part 1

For more information contact us on 011 712 1300; email info@cquential.com or visit our website www.cquential.com

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