Slotting is the optimization of product placement. It is an essential strategy in warehouse management, aimed at maximizing the efficiency of order-picking operations. This article summarizes key concepts and best practices in slotting. 

What is slotting? 

Slotting allows you to organize your warehouse in such a way as to improve workflow, reduce picker travel times and optimize storage space. To do this, you first need to determine the best locations for each SKU (Stock Keeping Unit), based on criteria such as order frequency, handling characteristics (transport, storage), product size, etc. There are several slotting techniques available. These techniques can be deployed using various tools such as Excel or Slot3D. 

Slotting Objectives 

• Reduce picking times:

Putting items that are ordered often in easy-to-reach places saves time when picking them. This makes order picking faster. 

• Optimize storage space:

Using space well increases how much you can store. This lets you keep more items without needing more space. 

•  Increase productivity:

Reducing unnecessary travel by making items easier to access. Workers can pick orders faster and make fewer mistakes. 

•  Improve safety and ergonomics:

Placing heavy items at easy-to-reach levels and keeping hazardous products out of the way reduces risks for workers. This makes the workplace safer. 

Benefits of Slotting 

• Reduce picking cycle time up to 50%: faster picking, Improve ergonomics, cut travel time, and optimize replenishment. 
• Improve Order fulfillment up to 25%: fewer errors, minimize item damages, and increase visibility. 
• Reduce direct labor cost up to 20%: faster picking, improve ergonomics, cut travel time, optimize replenishment. 
• Reduce equipment usage cost up to 25%: cut travel time, improve ergonomics.  
• Optimize warehouse space utilization: increase storage capacity, free up space, and reduce carrying cost. 

Data Required 

Historical Data 

• Sales history/forecast (seasonality, demand fluctuation, etc)​. 

• Yearly or monthly hits. ​ 

• Number of lines picked per year or per month.​ 

• Product life cycle. 

Benchmark Data 

• In greenfield, historical data might not be readily available. Benchmark historical data from other similar DCs can be used to provide a reference point.​ 

• Sales history/forecast.​

• Yearly or monthly hits​.

• Number of lines picked per year or per month.

SKU Data 

• This data reveals what kind of product an item represents and its dimensions. It can help managers understand any special considerations for storing or handling an item.​ 

• Dimensions of all products and their subsequent packaging types. 

Location Data or Available Space in Warehouse 

• This data reveals the volume and equipment requirements of each location. It can help identify which items should be slotted in each location. In case of greenfield, it can help identifying locations to set up and equipment required (shelves, racks, lifts, automations, etc). 

Warehouse Profiling 

By Customer 

• Use pareto principle to classify the customers based on gross profit.​

• Determine how many A class customers there is.​ 

• If there is only a handful of A class customers, zone the warehouse based on customers first​. 

• Create a common zone for remaining classes of customers. 

By Order Completion Zone 

• Determine how many items can complete an order fully.​ 

• If a small number of items can complete a large portion of orders fully, then create an order completion zone designed for these specific items​. 

• The remaining items can be slotted with other methodologies. 

By Cube Utilization 

• This method is applied if the items consist of a wide range of crushability. ​ 

• Heaviest items at the beginning of the pick path​. 

• Lighter items at the end of the pick path​. 

• Zone the warehouse based on the pick paths. 

By UOM 

• For each item, determine the different levels of UOMs.​ 

• Based on historical data, determine how much of each UOM is sold​. 

• Create a UOM mix to zone the warehouse by pallet picking, case picking and each picking sections. ​ 

• Sequence the zones (i.e. should case picking zone be located right beside each picking zone?)​. 

• Determine the size of each zone. 

By Product Group 

• Group items by selected characteristics (i.e. wires, conduits, breakers, etc)​ 

• By following the UOM mix, determine the number of hits of each item characteristic for every pick zone​ 

• Determine the portion of each pick zones required for every product characteristic​ 

• Sequencing the product characteristics within each picking zone 

Determine Storage Equipment and Modules 

• Based on the warehouse profiling, determine the storage equipment to purchase. 

• Determine the dimensions of modules in each storage equipment type. 

• Determine the fill percentage​. 

• Calculate the effective volume of each module. 

Design Warehouse Layout 

• Determine how many zones to have in the warehouse.​ 

• Assign ABC class to each zone based on: Warehouse profiling​, Putaway​, Picking,​Travel distance​, Traffic at critical areas. 

• Assign modules within each zone by matching the ABC classes of the modules with the ABC classes of the zones.​ 

• Determine the layout within each zone.​ 

• Determine the layout of the entire warehouse.​ 

The Optimal Solution 

The optimal solution is based on:  

• Number of days in stock (replenishment frequency).  

• Travel time. 

• Replenishment locations. 

• Available warehouse space (structural dimensions, racking height, etc.). 

• Number of SKUs. 

• SKU speed (also volumetric considerations). 

• Item class segmentation and order completion zone. 

What Avalon offers 

• We can offer you a turnkey solution based on your data and a recurring re-slotting service to help you optimize your operations over the long term. 

• We can show you visually what your warehouse will look like and propose different scenarios. 

• We can handle the slotting of future or existing warehouses. 

• Thanks to our Idea Volumetrics solution, we have access to volumetric data on over 100,000 electrical product references in our database. 

Slotting Methodology for Reconfiguration 

Slotting Methodology for Greenfield (and Equipment Sizing Optimization)