{"id":43097,"date":"2019-10-29T15:13:00","date_gmt":"2019-10-29T15:13:00","guid":{"rendered":"http:\/\/sticky-highjinx.flywheelsites.com\/?p=43097"},"modified":"2024-06-26T20:36:02","modified_gmt":"2024-06-27T00:36:02","slug":"warehouse-slotting","status":"publish","type":"post","link":"https:\/\/envistacorp.techyscouts.dev\/en-au\/2019\/10\/29\/warehouse-slotting\/","title":{"rendered":"What Is Slotting? How to Optimize Your Storage Capacity"},"content":{"rendered":"Reading Time: <\/span> 6<\/span> minutes<\/span><\/span>\n

Warehouses have been using basic slotting strategies for decades to determine optimal location sizes and SKU placement within the warehouse. These warehouse slotting optimization<\/a> strategies have helped drive cost savings for omnichannel fulfilment in many ways. These include reduced replenishments, more efficient travel paths, and optimised space utilization and warehouse layouts.<\/p>\n\n\n\n

Too often, though, warehouses will take the opportunity to slot during a facility design project but then not maintain slotting optimization regularly by re-analyzing shipment data. This results in missed opportunities to re-slot items into more appropriate location sizes or SKU location assignments.<\/p>\n\n\n\n

What is Slotting?: How to Optimize Your Storage Capacity<\/h2>\n\n\n\n

Slotting is the process of organizing warehouse storage capacity<\/a> to maximize efficiency. Warehouse inventory is organized by product characteristics like Stock Keeping Units (SKU), product type, item size, weight, order history, and more. Analyzing this data is important for implementing a warehouse slotting strategy that is tailored to your sales and inventory management.  <\/p>\n\n\n\n

Warehouse Slotting Goals <\/h2>\n\n\n\n

Weeks-On-Hand Inventory<\/h3>\n\n\n\n

The term \u2018weeks-on-hand\u2019 refers to how many weeks of orders could be filled with only the inventory that is in the pick phase. Fairly standard practise is for warehouses to have one to two weeks-on-hand for the majority of items, but some can have lower levels in some instances.<\/p>\n\n\n\n

When implementing a new slotting process, the goal is to understand the specific business needs while working within the constraints of your warehouse design. For some warehouses with space constraints, it might be optimal to carry a higher weeks-on-hand inventory for faster-moving items and a reduced weeks-on-hand inventory for slower-moving items.<\/p>\n\n\n\n

Other warehouses might choose to focus on item level and storage by moving slower-moving items to other areas of the building and carrying the same weeks-on-hand inventory for fast- and slow-moving items. Any strategies involving a larger weeks-on-hand inventory will reduce the number of replenishments, increase directed put-away to the primary location, and increase the availability of items for order fulfilment. This will also affect the amount of travel involved in the process.<\/p>\n\n\n\n

Optimize Location Management with SKU Velocity<\/h3>\n\n\n\n

A primary goal of a slotting strategy is to reduce the travel distance in the pick path while working within the constraints of available space. The goal is to increase the pick density in the higher velocity aisles while reducing the wasted travel past slower-moving items. SKU velocity is a measure of how often a SKU is picked, which indicates <\/strong>how fast inventory moves and can be used to optimise inventory<\/a> location. To optimise location management, first, determine the turnover speed of each SKU using ABC analysis<\/a>.<\/p>\n\n\n\n

Slower-moving items can then be moved to less desirable pick locations in the warehouse while minimizing the amount of travel to these areas. When possible, moving the fast-moving items closer to the receiving and shipping areas will also allow the reach truck drivers to travel a shorter distance when doing put-away tasks and taking orders to the outbound docks. This reduced travel path can play a part in getting items put away in a more streamlined manner and increasing the efficiency of your warehouse. Analyze product turnover at different times of the year to establish the average speed and velocity during peak demand periods.<\/p>\n\n\n\n

Why Use Slotting In Warehouse Operations? <\/h2>\n\n\n\n

The benefits of slotting focus on warehouse operations and fulfilment and can provide peak optimization in this area. Some benefits include:  <\/p>\n\n\n\n