Whether you run an eCommerce store or a shipping company, effective planning and organization of goods are the foundation of any warehouse.
The global warehousing and storage market is projected to reach $654,920 million by 2028, with a CAGR of 3.1% from 2022 to 2028.
This makes warehouse slotting not just a choice, but a necessity for improving efficiency.
Slotting enhances picking performance and optimizes warehouse operations, thereby reducing inventory management costs.
In this blog, we will delve into the details of warehouse slotting, its mechanisms, and the benefits it offers.
Let’s get started.
Warehouse Slotting: What Is It?
Before getting into some of the most workable warehouse slotting rules let’s first understand what warehouse slotting is.
To make it simple for you, warehouse slotting involves systematically organizing inventory within a warehouse.
The aim is to expedite the process of picking goods, locating and retrieving them from shelves, and restocking them.
Imagine you have a closet full of clothes.
You decide to just throw everything in there—shirts, pants, dresses, jackets, and shoes—all mixed together in one big heap.
When you need a specific shirt, you have to dig through the entire pile to find it.
But then you get a closet organizer, with hangers for shirts, shelves for shoes, and compartments for pants and jackets.
Now, when you need to find a specific shirt, it’s much quicker, easier, and less frustrating.
Warehouse slotting is similar to using a closet organizer.
Effective warehouse slotting strategies assign each item to a designated location, simplifying the process of finding and restocking.
What are the Advantages of Warehouse Slotting?
Implementing warehouse slotting can greatly benefit your business. Here are some of the advantages.
Quicker Deliveries
Effective product slotting in warehouse enhances pickup accuracy.
Employees tasked with picking goods might also be responsible for packing and preparing them for shipment.
Following best practices for selecting the right packaging is essential, but if the inventory isn’t well-organized, finding items becomes challenging, increasing the risk of errors and delivery delays.
Enhanced Space Utilization
Maintaining and managing a large warehouse is expensive, with costs ranging from $750,000 to $1 million.
Therefore, it’s crucial to use the space efficiently. Warehouse slotting helps you optimize the arrangement of goods, thereby increasing storage capacity.
Reduced Error Rates
Assigning unique slots for each product provides a visual reference that aids warehouse workers in quickly identifying and picking the correct items.
This minimizes the risk of confusing similar-looking products and ensures that customers receive the correct items on time.
Lower Labor Costs
Optimized slotting allows warehouse personnel to navigate more efficiently, reducing unnecessary travel time and effort.
This results in cost savings and increased productivity, as employees can fulfill more orders within the same timeframe.
Enhanced Employee Productivity
Companies can boost employee productivity with warehouse time slot management. An effective slotting strategy is essential for successful warehouse operations as it minimizes the time and effort required for repetitive tasks.
Placing SKUs in the most frequently used locations, creates the most efficient route for the picking process, reducing travel time and increasing overall efficiency.
Warehouse Slotting Strategies: Ways to Implement Slotting in Your Business
Now that you’re aware of the benefits of warehouse slotting, you might be asking:
How do I get started?
We’ll tell you how.
Here are some steps you can follow to implement warehouse slotting in your business:
1.Identify Unused or Empty Warehouse Space
Slotting can be categorized into two types:
- Macro slotting
- Micro slotting.
Macro slotting involves organizing the entire warehouse based on available space, while Micro slotting focuses on item-level organization within the warehouse.
- Invest in large or taller shelving units to maximize storage capacity and free up more floor space.
- Additionally, consider adjusting the height between shelves to create narrower aisles.
2. Identify and Organize Demand
A common approach in slotting is to keep fast-moving products easily accessible.
- Focus on items that sell quickly based on how often they are picked, so that pickers can grab them easily.
Consider using the “ABC slotting” method:
- Choose a time frame, like 30 days.
- List all SKUs that were filled during this period.
- Sort the list by the number of orders. Label the top 50% of products (with the highest number of orders) as “A,” the next 25% as “B,” and the remaining 25% as “C.”
For example, Halloween decorations might be more popular in late September and early October.
3. Let Your Pickers Give You Feedback
Pickers are the ones who know the warehouse layout and storage capacity inside out since they’re constantly on the move. Their insights are invaluable for improving warehouse management.
- Make sure to gather their feedback on how to enhance the layout and travel paths, considering item sizes and how they impact navigation.
- Look for opportunities to streamline the organization and create a smoother picking process.
4. Organize Inventory by SKU Velocity and Zone
Now it’s time to create a warehouse slotting strategy using your inventory data.
- Start by sorting each SKU based on how quickly it moves.
- Place fast-moving and medium-moving items in the most accessible locations, while slow and very slow movers should be placed in less convenient or remote areas.
- Next, determine the best location for each SKU within your storage system. This step can be tricky and may need to accommodate certain constraints. This is where knowing the size and weight of each SKU becomes crucial.
5. Adapt to Seasonal Changes
SKU velocity often changes with the seasons.
For example, some products sell fast in the summer but slow down in the winter.
- By understanding these seasonal shifts and their impact on sales, businesses can optimize warehouse productivity year-round.
- If companies can accurately predict seasonal demand changes, they can plan ahead and place those items closer to the picking areas.
6. Fast-Moving vs. Slow-Moving Items
- Fast-moving goods, as the name suggests, quickly enter and leave the warehouse. It’s often best to keep these items near the front for easy access.
- Slow-moving products, however, take longer to turn over—weeks or months instead of days. Unless they are particularly heavy and need to be picked first as the base of a pallet rack, these items should be placed towards the back of the warehouse.
Tips to Boost Warehouse Slotting Efficiency
You can enhance your business operations further with these key tips:
- Regularly Update Slotting Strategy: Adjust your slotting tactics seasonally or when sales demand changes.
- Use 3PL Fulfillment Centers: Outsource to third-party logistics providers to manage warehouse operations efficiently.
- Prioritize Safety: Ensure staff are trained and keep pathways clear to prevent accidents.
- Keep the Warehouse Organized and Clean: Label containers, arrange products neatly, and remove obstacles.
- Plan a Picking Sequence: Create a picking plan based on product type to improve efficiency and accuracy.
- Review Facility Flow Regularly: Assess and adapt to changes in inventory and warehouse layout to maintain smooth operations.
By implementing these practices, you can significantly boost your warehouse efficiency.
FAQs: Warehouse Slotting Explained: Top Strategies for Success
Can warehouse slotting be used in different industries?
Absolutely! Warehouse slotting can be applied across various sectors like retail, e-commerce, manufacturing, food warehousing, and logistics. The principles and best practices can be customized to meet the unique requirements of each industry.
How frequently should slotting strategies be reviewed and adjusted?
Slotting strategies should be routinely reviewed and adjusted to keep pace with shifting demand patterns, product characteristics, and business needs. It’s advisable to conduct evaluations periodically, ideally quarterly or annually, to identify areas for improvement and adapt to market changes.
How does warehouse slotting affect order accuracy?
Warehouse slotting greatly enhances order accuracy. Strategically organizing products and assigning them to specific locations based on demand and picking patterns, simplifies the process for personnel to locate and pick the correct items.
Conclusion
Warehouse slotting is vital for logistics and service-oriented delivery businesses.
It streamlines item organization for logistics managers and dispatchers, minimizing damage. Remember, there’s no one-size-fits-all approach to warehouse slotting optimization; you can tailor it to your needs. Ultimately, effective warehouse slotting enhances capacity planning and will help you in the long run.
If you are looking for the best solutions in this regard, Qodenext can help you optimize your warehouse slotting process. Contact us today!
