Inventory Slotting, Part 1: The Benefits of Strategic Slotting

In fulfillment centers, "slotting" is the process of assigning the designated storage and picking locations for each SKU in your inventory. For most facilities that decide to reevaluate their approach to slotting, the goal is usually to bolster picking times. However, what many don't realize is that slotting improvements can also yield operational advantages that impact the entire warehouse, such as:

  • Operating costs – Effective slotting can improve intra-warehouse transit times across the board, lowering the net costs of any SKU moving activities.
  • Overall space efficiency – optimized slotting improves warehouse space utilization, which in turn can often delay an expensive facility expansion or move.
  • Picking accuracy – reevaluating your current slotting arrangements is also an opportunity for better delineation of similar products or variants to reduce picking errors.
  • Picking efficiency – optimized slotting is not only about shortening distance; accessibility improvements should also be considered. Slotting fast-moving SKUs into locations that are easier to pick from (i.e. with no bending or reaching) can reduce replenishment trips and speed up put-away and picking times.
  • Equipment demand and personnel routing – better slotting can help reduce traffic congestion in your warehouse's active zones and contention for material handling equipment.

To start making improvements to your warehouse's slotting, there is information about your SKUs you should collect first. Product criteria such as sales velocity, order frequency, size, weight, and other data points will all help inform how products should be slotted in relation to each other and in relation to your warehouse's major activity zones.

By aligning that data with your operational goals, you'll have necessary information to revamp your slotting assignments. In our next blog post, we'll go over some best practices to keep in mind for developing your slotting strategies.

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