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Slotting Software: Piecing Together Your Warehouse
Order pickers spend 60 to 65 percent of their time traveling back and forth across warehouse floors. Reducing that time means improved picking productivity, faster shipping times and most importantly, labor savings for distributors. Utilizing slotting software can make these goals a reality.
Developed out of a need for warehouse managers and employees to know more about their inventory and get a pulse on the movement of products for better forecasting, planning and improved customer service, slotting software helps distributors identify exactly what's happening in their warehouses and recommends placement of inventory so that the distance warehouse employees travel to pick orders is as short as possible.
"You fill orders much more frequently than you receive material, and slotting software helps you in this activity in that it's basically looking at the velocity that each product is being moved and helps you determine where best to stock it in your warehouse," says Jon Schreibfeder, president of Effective Inventory Management Inc., Coppell, Texas.
The benefits of proper slotting are clear — shorter travel times and better use of space — yet most distributors have yet to truly master the skill. According to Schreibfeder, it's estimated that nearly 80 percent of all distributors still need guidance when it comes to slotting their warehouses.
"Most distributors, especially in the sanitary supply industry, still stock products based on what we call a traditional warehouse layout," he explains. "Similar products are stocked right next to each other, maybe even in a vendor item sequence. This makes it very easy to find products in your warehouse, but every product line that a distributor carries in all probability has fast moving items, moderate moving items and dead stock."
When slotting, distributors want to be absolutely sure that the fast moving items, the items that are picked most often, are in the most accessible locations next to each other in the warehouse. Slotting software will identify those items and if done correctly, distributors will see a marked increase in productivity, says Schreibfeder.
New products, change in product demand, and seasonality of products can impact the picking and replenishment efficiency in a warehouse. And, since each warehouse is different, proper slotting depends on a distributor's product, movement and storage characteristics.
Slotting a warehouse manually isn't easy. There are a lot of factors and constraints distributors must consider — the SKU's current and future velocity, its location, its weight and seasonality. Implementing a slotting tool will be significantly more accurate and productive than relying on old-fashioned intuition.
Benefits Of Slotting
Slotting is the science behind determining where to store individual products in a warehouse to enable the most efficient picking. The general rule is that the fastest movers should be located closest to the shipping area and in the zone that is easiest to pick from within that picking locale. Slow movers, meanwhile, are located further away.
Slotting software, which is applicable in most WMS packages or as a stand-alone application, looks at a map of the warehouse along with the velocity of orders and order mixes entered into a distributor's system and calculates which items are picked most frequently and slots them in the most advantageous position in the warehouse.
"With data on past transactions, the system suggests relocating items to improve pick patterns that would minimize travel path, thus reducing labor," says Jonathan Soon, vice president of operations for Santa Fe Springs, Calif.-based Royal Corp.
Implementing slotting software to complement its enterprise resource planning (ERP) platform in April 2005 has had a significant impact on San Diego-based WAXIE Sanitary Supply's warehouse operations. The decreased travel time for warehouse employees has equated to an increase in pick rate while decreasing labor costs, says Eric Cohen, vice president of logistics for WAXIE. In fact, the company has recognized a 15 percent increase in its pick rate over its prior method.
"Prior to 2005, slotting was accomplished based off the performance of each warehouse manager and or warehouse worker," says Cohen. "Items were slotted not for ease of picking but rather for ease of memory. Products were placed within a location on a permanent basis for ease of finding the item. If an item was put into a new location outside of its previous location, the item was now lost."
Helping to avoid worker fatigue, slotting software makes recommendations such as placing high velocity products in zones that reduce bending and reaching activity. Also, with heavy or oversized items, the software recommends distributors place them on lower levels in the pick zone or suggests they be placed in a separate zone where material handling equipment can be utilized. To decrease congestion and further boost picker productivity, high-velocity products are also balanced across picking zones.
Utilizing space to it's maximum potential in a distributor's warehouse is also achieved through slotting software, says Schreibfeder. The software makes sure that product is stored in the right-sized location to maximize cube utilization, reduce stock-outs and minimize replenishment labor. So, as inventory levels change, the software gives distributors the ability to re-optimize the available space. The software can also point out problem areas stemming from the location of products in a distribution center.
"You see where maybe you should re-slot certain merchandise to make it easier," says Andy Baltzell, general manager of Dade Paper's Miami branch. "If you're doing a constant replenishment to the same item, for instance, you'll get reports that will tell you that. So, if you're replenishing a product several times a day, it may suggest that you need a bigger slot for that particular item."
Periodic re-slotting as inventory levels change allows distributors to continually re-optimize their available space. By managing each cube, distributors are able to better maximize the space within their warehouse, which in turn reduces operational costs. And by ensuring that items are placed in properly sized locations, more products can be easily stored in a cube.
For All Sizes
For most distributors, slotting is still done manually. But as they look to increase productivity in their warehouses, more are beginning to look into slotting software that will help ease the time-consuming process of ranking inventory by fastest to slowest movers and determining the proper placement of items to speed up the picking process.
Investing in slotting software has a quick return on investment for distributors — typically less than a year, according to manufacturers of the software. Plus, manufacturers say distributors of all sizes can benefit from current packages.
In the past, due to cost and complexity, slotting software was traditionally only utilized in large operations. However, slotting software can have a significant impact on the productivity and competitiveness of a small to midsized distribution center, too.
Manual slotting takes some time to establish, and monthly monitoring is required to keep items positioned properly. Staying on top of slotting can be a daunting task, especially with new products being brought in. Slotting software ultimately can ease a distributor's burden of keeping items in proper locations. Thus, slotting items properly increases picking productivity and makes order selection easier, safer and more accurate.