What Is Warehouse Slotting and How Does It Work? Benefits & Best Practices

Are you tired of organizing your warehouse or distribution center to avoid delays in shipment or missed deliveries?

Then, warehouse slotting is the best solution. 

Slotting improves the picking performance and optimizes the warehouse to reduce inventory management costs. As wholesalers and retailers continue to expand their business, this trend of warehouse management is set to continue.

Let’s go into greater detail about warehouse slotting, how it works, and the benefits of slotting.

What is Warehouse Slotting?

The simple definition of warehouse slotting is the process of organizing or managing the inventory in a warehouse.

Imagine you have a full drawer of cutleries – soup spoons, folks, and knives in the drawer. When you need any one of them, you need to search through your jumbled pile of cutlery to find it. 

But today, you get those organizers that give you separate slots for each silverware. Now it is easy and quick to search for anything you want, isn’t it? 

But today, you get those organizers that give you separate slots for each silverware. Now it is easy and quick to search for anything you want, isn’t it?

In a similar way, to organize goods, warehouse slotting is the solution. With a warehouse slotting strategy, every item is kept on its particular shelf space and is easy to find to restock. Apart from this definition, there are multiple other benefits that you can avail.

Let’s read the possible benefits of performing warehouse slotting efficiently. 

What are the Benefits of Warehouse Slotting?

Warehouse slotting can help your business in many ways. Here are some of the key benefits. 

1. Faster deliveries

Efficient slotting can improve pickup accuracy. People who are assigned to pick up the goods may also be asked to pack and keep them ready for shipment. You can follow some of the best practices to choose the right package. However, if the inventory is not well organized, it becomes difficult to find the items, leading to the risk of errors and delivery delays. 

2. Improved space utilization

Keeping and managing a huge warehouse space is costly. It can cost around $750,000 to $1 million. So, it is important to use the warehouse space wisely. Warehouse slotting can help you optimize the goods efficiently to increase the storage capacity. When considering storage requirements, it’s essential to factor in the cube size of your products to make the most of your available floor space.

3. Minimized error rates

The well-organized warehouse slotting process minimizes the chances of product picking errors, leading to improved order accuracy. By assigning unique slots for each product, you create a visual reference that helps warehouse workers quickly identify and pick the correct items. This reduces the risk of mixing up similar-looking products and ensures that customers receive the right items in time.

4. Streamlined inventory management

To maintain inventory management efficiency, it’s crucial to consider the item velocity and storage costs associated with each product. Slotting warehouse operations facilitates better inventory control and tracking. With designated slots for each product, you can easily identify when items need restocking, reducing the chances of stockouts or overstocking.

By monitoring product velocity and adjusting slotting accordingly, you can ensure that high-demand items are readily available and avoid excess inventory storage holding costs.

5. Reduced labor costs 

With optimized slotting, warehouse personnel can navigate the warehouse more efficiently, reducing unnecessary travel time and labor efforts. This leads to cost savings and increased productivity as employees can fulfill more orders within the same timeframe.

6. Improved employee productivity

Companies can improve their employees’ productivity using warehouse management software. A well-planned slotting strategy is a rule of thumb for successful warehouse operations as it reduces the time and effort in carrying out repetitive tasks. It creates the quickest path to complete the picking-up process by placing SKUs in the most common spot, reducing travel time while increasing efficiency.

7. Effective management of product expiration 

By implementing slotting strategies, perishable goods that require certain temperature requirements can be stored in locations that enable proper rotation and minimize waste by carrying out repetitive tasks. Similarly, obsolete or slow-moving items should be separated into particular sections for easier management and clearance.

Now that you know what to expect from warehouse slotting, you would probably wonder, how it works. 

Let’s discuss this. 

How Does Warehouse Slotting Work?

Here are the simple steps you should try for using warehouse slotting to efficient picking process and warehouse inventory management. 

Step 1: Identify unused or empty warehouse space 

Identify unused items or storage space. For example, invest in huge shelves or higher shelves that maximize the storage space leaving more floor space. Consider the height between the shelves to create a narrow aisle. To help you further, there are two categories of slotting. Macro slotting and Micro slotting- Macro slotting refers to how the entire warehouse is organized as per the given space. Whereas micro-slotting is an approach to item-level slotting within the warehouse.

Step 2: Figure out which items to keep together

Micro-slotting focuses on placing the items in the warehouse. Organizing inventory should be your next step, where you want to place all the stock-keeping units (SKUs) for pickers to easily find. The micro-slotting process is all about how the items are placed and which containers hold the SKUs.

Step 3: Sketch out your warehouse slotting strategy 

Slot inventory based on the characteristics of each product, including its size, weight, and storage medium to ensure an efficient layout. Once you have decided on the strategy as per the warehouse layout, get it on paper. Having a guideline to follow makes it easy for warehouse management. Getting a slotting system in place will also give the best solution for unused warehouse space. When considering slotting, don’t forget about the importance of a well-organized loading dock to streamline the flow of goods.

Step 4: Continuous monitoring and optimization

The process of warehouse slotting must be continuously monitored and modified. Slotting plans may need to be revised when demand patterns, product offerings, and business requirements change. In order to further optimize the slotting pattern, regular order history analysis, inventory audits, and feedback from warehouse workers can assist in identifying areas for improvement. Periodic re-slotting can help keep your warehouse operations optimized as demand patterns change.

To efficiently follow the above steps,  you need to keep some of the basic practices in mind. 

What are the Warehouse Slotting Best Practices to Follow?

Slotting is essential for logistics management, it is the backbone of supply chain operations. But, do you know how to get started? Here are some of the warehouse slotting strategies and best practices you need to keep in mind to make the order picking process efficient.

1. Identify and organize demand

Maintaining easy access to quickly moving product lines is a common tactic used to direct slotting procedures. 

Prioritize items that are frequently purchased based on SKU velocity in that pickers may quickly get to them.

Think about using the “ABC slotting” strategy:

• Choose a certain time frame, such as 30 days.
• List every SKU that was filled at that time.
• Using the number of line orders, sort the list. The top 50% of products (those with the most orders) should be labeled “A,” the next 25% should be “B,” and the final 25% should be “C.”

Halloween decorations, for instance, may sell better in late September and early October.

2. Get feedback from pickers

Pickers understand the warehouse layout and the storage capacity better than anyone because they are always moving around the warehouse. So, the pickers will have the most useful feedback and information on how to improve warehouse management. Try to create an efficient travel path within the warehouse, considering the item size and how it affects navigation. Identify opportunities and get the warehouse organized for a seamless picking process

3. Organize inventory by SKUs velocity and by zone

It’s time to develop a warehouse slotting strategy armed with inventory data. First, arrange each SKU according to its velocity in the appropriate equipment to optimize space utilization. Fast and medium movers should be kept in the most convenient locations, while slow and very slow movers should be kept in less convenient or remote locations, taking into account SKU velocity.

Next, decide where each SKU should be located within the storage system. This is more challenging. The slotting strategy may take certain restrictions into account. This is where the SKU size and weight information is most useful.

4. Invest in a warehouse management system (WMS)

Warehouse automation is becoming increasingly popular in the logistics industry, and slotting plays a crucial role in its implementation. A warehouse management system (WMS) has various capabilities that can help your warehouse run more efficiently and simplify the slotting process. Instead of relying on a list of SKU numbers on a spreadsheet, pickers can utilize wearables or handhelds with technology in your warehouse to quickly find where an SKU is kept.

The slotting optimization process is made simpler by investing in warehouse management software since it eliminates guesswork and completes the task more quickly and precisely. Warehouse managers need to follow certain tips to organize and manage the warehouse environment during peak times.

5. Adjust to seasonal change

SKU velocity is subject to seasonal variations on a regular basis. For instance, certain products sell quickly in the summer and slowly in the winter. Businesses can optimize productivity year-round by correctly sizing their warehouse by understanding seasonal fluctuations and how they affect sales. If companies can effectively forecast seasonal demand fluctuations, they can plan ahead and position those commodities closer to picking areas.

6. Fast-moving vs. slow-moving items

Fast-moving goods are exactly what their names imply; they enter the warehouse swiftly and leave just as quickly. Keeping these things near the front of the warehouse is frequently a good idea. Slow-moving products, on the other hand, require longer to turn around — weeks or months rather than days. Unless they are particularly heavy, in which case they can be picked first and serve as the foundation of the pallet rack, it makes sense to place them at the back of the warehouse.

While following the above practices for efficient warehouse management, we have some tips that would help you to increase efficiency. 

What are the Tips to Increase Slotting Efficiency?

The operations of a business can be enhanced by warehouse slotting. Take into account these best tips to increase warehouse efficiency even more.

1. Review your slotting strategy on a regular basis

As seasonal trends change, slotting tactics need to be updated regularly considering factors like item level and traffic jams in the warehouse. Depending on their preferences or operational requirements, businesses might do it regularly, quarterly, semi-annually, or annually. If there is a significant change in sales demand or a reduction in efficiency, re-slotting may be required for a particular zone or the entire warehouse.

2. Retain your supplies in the 3PL fulfillment centers

If an eCommerce business lacks the necessary manpower and technology resources, slotting may be challenging. The operations of warehouses of fulfillment centers are outsourced by eCommerce businesses to third-party logistics providers, or 3PL firms, in order to avoid these issues. They oversee every aspect, including order management and inventories. With the assurance that a 3PL partner is handling their items expertly, businesses can concentrate on other value-added tasks.

3. Prioritize safety 

During warehouse slotting, warehouse managers should prioritize safety. Making sure that staff employees receive training on handling big or dangerous goods is crucial. Additionally, keep slotted materials out of forklifts’ paths by using any type of material handling that can resist repeated heavy use.

4. Keep the storehouse organized and clean

There are other aspects to take into account in addition to organizing things at the slot level for effective warehouse slotting. Always identify your containers, arrange your products neatly, and clear any packing that might be impeding your route. It will optimize your overall order fulfillment process with enhanced customer satisfaction.

5. Make a picking sequence plan

By constructing a picking sequence, you can create a warehouse slotting plan in an efficient manner. Make a picking sequence plan that considers product type and business type. It aids in choosing which objects to pick first or last, improving the efficiency and accuracy of personnel as they carry out their duties.

6. Review your facility flow regularly

A company can eventually expand and start receiving additional things in its warehouse. Businesses should assess how goods enter their facility to decide what to do next in light of recent changes.

Implementing these best practices can significantly enhance warehouse slotting and overall storage requirements.

Conclusion

Warehouse slotting is one of the most crucial processes in logistics and service-oriented delivery businesses. The slotting process has made it easy for the logistics managers or dispatchers to organize the items efficiently without any item damage. Overall, warehouse slotting will help you with better capacity planning.

In this process of optimally slotting your warehouse, you can benefit from last-mile delivery, which helps you with a significant increase in distribution efficiency. After all, it’s route optimization that ensures the delivery of the packages to your customers on time. Sign up with Upper today and try a 7 days FREE trial to experience hassle-free route planning.