March 30, 2015

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10 Advantages of Slotting Optimization in Warehouses

The saying “A place for everything, and everything in its place” almost sums up the idea behind warehouse slotting and profiling. A more accurate version might be, “An ideal place for everything, and everything in the most efficient place.” 

Labor standard experts often see the similar issues across all warehouses and distribution centers which impacts benefits of the labor standards. Classic example is when an order is raised and picked from Distribution Centre or warehouse half way through one of the aisle area is highly congested with traffic since order pickers are trying to pick up the parts in same area.

Slotting is often a reactionary response of finding an available location for new products. A full warehouse might install double or triple deep racking for fast moving products.

It is commonly thought that physical constraints of a distribution center are impacting the throughput of operations, and that an accurate labor standard is the only solution to increase efficiency. However, with a systematic approach to slot the warehouse in the most effective way, warehouses can optimize their operations without spending the capital on an expensive expansion or re-racking project.

Some of the warehouse slotting’s objectives are:

  1. Improve storage efficiency
  2. Increase picking efficiency
  3. Optimization of spaces in the warehouse
  4. Reduction of handling cost

We do slotting in our day to day activities also; some of the day to day slotting is keeping fast moving kitchen utensils in the front so that it can be easily accessible. The credit cards which we use regularly are kept in front slot in our wallet.

There are three types of slotting Random, Fixed and Dynamic

Random Slotting:

For random slotting items are not assigned to fixed pick up location in the Warehouse. They are assigned for many pick locations. Fox example if inventory from one pick up zone is depleted then same item will be picked from the new location, and then new location will be assigned as pick zone. The intention is to reduce the replenishment time because inbound stock will be stuck in put away directly. Even though there is a need of inventory reserve, there will be reduction in replenishment time because many putaways will go to direct locations.

Fixed Slotting:

Fixed slot infers items are apportioned to fixed bin location for the packing purpose. For an assigned item in warehouse management system, configured with minimum and maximum quantity which is stable for each fixed pick up slot. When production orders are released for picking, if inventory depletes below specified minimum order quantity in the fixed location then replenishment task will be invoked to refill the stock from replacement inventory pick location. Replacement inventories are managed on arbitrary basis, usually stored near the pick slot.

Dynamic Slotting:
Dynamic slotting is a new term and yet to get standardized. Often means is that the WMS has the competences to set up new or impermanent slots for items allocated for known shipments. So if warehouse team knows they are going to have a high proportion of picks for a specific item, they may choose to create a new temporary slot right by the picking/shipping area rather than sending the picker to the normal slot.  

Objectives of slotting optimization:

  • For non-consumables stored on pallets, put the fast moving items close to the shipping dock and on the lower pallet rack levels. Store slower moving items on higher levels and further away from the dock.
  • Usually in the warehouse pick area, higher shipment and heavier shipment are located nearer to the pick area. Store faster moving shipments on floor/lower level itself.
  • In the horizontal carousels, to balance the activity among carousels in POD. Spread faster moving shipments among the carousels and place shipments on the center shelves.
  • In order to balance the work load among the flow rack units. Slot for fast-moving shipments into carton flow rack, with the very fastest on the center levels can be implemented.
  • Store slower-moving items into shelving, with the faster moving ones placed closer to the take-away conveyor. Locate heavier items on the center levels.

Some of the Advantages of Slotting

  • Estimated savings 8 to 15% on manpower cost
  • Proposed cost saving of ~ 10 to 30% on space  occupied
  • Based on the inventory best place for storage will be determined
  • Occupancy ratio will be increased
  • Improvement in picking productivity
  • Lesser travel lead time for picking
  • Bottle neck in inventory picking will be reduced
  • Replenishment runs will be minimized
  • Depending on the cargo size right type of pick slots can be formed
  • Accommodate as per seasonal shifts in demand for cargo

Conclusion:

As slot optimization has become focus area for contract logistics, technological solutions will drastically remove the challenges faced by the 3PL’s in the warehousing segment.

HCL with its strong customer base in 3PL IS currently developing slot optimization solution that will help the 3PL’s involved in their contract logistics business.

To know more about Warehouse Management System, visit us