Bin Consolidation & Slotting
Warehouse slotting is the process of organizing the inventory in a warehouse or distribution centre to maximize space and efficiency. It is a form of inventory management. The purpose of a warehouse is to provide storage of products to meet customer demands and inventory allows the decoupling of demand and supply.
The overall goal is to make both picking and replenishment quicker, easier, and more efficient. Slotting considers the item velocities, dimensions (cube size), weights, product groupings etc. to determine the ideal warehouse setup. Slotting goes beyond simply finding empty shelves or floor space for items as new inventory arrives.
Importance of Warehouse Slotting
- Improved Product Handling
- A critical consideration in a warehouse environment is that items do not get damaged during shipment or storage.
- Good inventory slotting means items are stored correctly — perishable food is stored in refrigerated containers, for example.
- This means customers receive their items in good condition.
- Optimized Storage
- It costs money to store items in a warehouse environment.
- SKUs slotted efficiently take up less space, which means more products can be in the same area.
- Seamless Fulfilment
- Warehouse slotting makes it easier for employees to pick and pack items.
- For example, you can reduce “traffic jams” by ensuring workers picking smaller items rarely have to wait while someone picks pallets using a forklift.
- Increased Safety
- With warehouse slotting, facility managers can create an optimized pick order that places heavier items on the bottom of a pallet and lighter items on top.
- That creates a safer pallet — one that’s not unbalanced or top-heavy — while minimizing the risk of product damage in transit.
Different Methods of Slotting
- Random slotting means items are assigned to pick zones instead of permanent pick locations.
- If inventory in one slot depletes, then pickers are assigned to pick those items from another location within that zone.
- Any incoming receipts transfer directly into pick zones, with little to no reserve inventory kept on hand.
- Fixed slotting means every item in the warehouse has a permanent bin location.
- The rating for each bin is for a minimum and a maximum quantity of its assigned item.
- If the bin becomes empty, it triggers a replenishment order from the reserve storage.
- In macro slotting, the warehouse manager considers the arrangement of their pick zones.
- In an environment where customers demand two-day shipping, this layout is critical — warehouses must feature high throughput designs with little congestion at the receiving or loading areas.
- Micro slotting concerns with the arrangement of items and pallets within picking zones.
- Micro slotting can significantly affect the warehouse ecosystem, primarily relating to worker health and safety.
- For example, consistently placing heavier items on lower shelves might force workers to bend to pick them up — exposing them to repetitive stress injuries.
Benefits of Slotting
Reorganizing zones, or even an entire warehouse, can seem like a daunting and time-consuming project because we need to determine how to store inventory in an optimal way and move large amounts of inventory to different locations correctly, so it does not cause any issues during the picking process.
While slotting can be a major project that takes time and continuous improvement, it ultimately can benefit your business and positively affect the bottom line.
Here are a few ways that slotting helps:-
- Faster picking and fewer picking errors
Proper slotting can improve picking accuracy by eliminating any possible confusion for the picker. Storing products that make the most sense for the picker such as by type, size, weight, etc., allows for faster picking. Workers can always know the location of items and how to get there without ever hunting through shelves.
- More Storage Capacity
Slotting can help identify opportunities to increase storage capacity. Taking the time to optimize the warehouse means one can delay expanding and/or spend extra costs on an additional warehouse.
- Reduce carrying costs
By optimizing warehouse space and improving processes, one can keep one’s overall carrying costs down rather than hiring more help or renting out more warehouse space.
- Minimize Damages
Besides avoiding damage during transit or packing, a warehouse slotting strategy can also help avoid damage to stored items during handling and processing.
- Increase Visibility
Good slotting helps improve employee productivity by allowing them to locate items immediately. This process helps managers and employees immediately understand when an item is not in the right place, which reduces the possibility of errors.
- For businesses operating through warehouses, it may be common to store stock of the same item across multiple bins.
- This is because if one bin fills up, the stock will be distributed to the next free bin location, resulting in various quantities of the same stock suddenly being stored across multiple bins in the warehouse.
- Although this might not, necessarily cause problems if small quantities of stock are picked when there are larger quantities or full pallets required to fulfil an order, issues can start to arise.
- This is because pickers end up needing to collect the stock from multiple bins spread throughout the warehouse, rather than just one location ultimately leading to lowered productivity, reduced picking speeds and longer dispatch times, as staff travel longer distances to collect stock.
- Therefore, for businesses regularly fulfilling large quantity orders, this inefficient way to amalgamate a single order for dispatch can drastically affect the number of orders leaving the warehouse, in turn leaving the business unable to meet order SLA requirements and leading to poor customer service.