Preparing for the Christmas Rush – A guide to warehouse slotting

September is with us, which means that it is only a few weeks before we hit the golden quarter – that period from the end of September to the end of the year, which encompasses the largest sales period for retailers. It is expected this year that online shopping volumes will increase again, as the trend towards click and collect continues unabated.

For warehouses and warehouse managers, this means that preparations need to take place as early as possible.

Warehouse preparations for Christmas

Common ways to increase operational efficiency and profit for the period usually involve employing more staff, tweaking cycle times of goods in the warehouse, simplifying warehouse processes and the flow of goods.  But there is another method that can be used, that many managers traditionally shy away from, warehouse slotting.

The process of warehouse slotting involves examining and fine-tuning existing warehouse processes in a bid to save labour, space and cycle times. It works on the premise that everything should have its own place, and not take up the space for another SKU.

The problem many warehouse managers have is that slotting needs to be carried out regularly more than once a year, as this allows out of date practices to be re-evaluated and optimised, and many warehouse managers simply don’t have the time to undergo such major project work.

However, properly slotting a facility has huge benefits. It reduces expensive labour costs and dramatically improves throughput through increasing pick and replenishment efficiencies, increasing order accuracy and reducing ergonomic risks associated with improper picking and replenishment operations.

A successful slotting plan can also  improve the capability to meet inventory rotation requirements, such as First In First Out and LIFO Last In First Out.

What does a slotting plan entail?

To engage in a slotting plan, you first need to map a strategy, as a slotting plan will involve a level of organisational change.

It begins with assessing the existing, inefficient warehouse layout and having a vision of what you want the ideal shop floor to be. Questions to consider should be:

1. Will you need to expand your buildings?
2. Will a rack reconfiguration be required?
3. What is the estimated timeline of the project?
4. What slot type will be used?

Out of all of these, choosing the ideal slot type is one of the most important considerations.

The slot size entails the type and size of racking storage that you will need to use.

Additionally, using the wrong slotting configuration can lead to wasted labour, time and space. It affects the picking rate, the time spent moving goods between sections of the warehouse and the optimum use of space. It is important to determine the ideal slot type by studying your existing warehouse configuration, quantity, size and condition of goods one will handle over the coming months.

5 Criteria to follow for implementing a slotting plan

There are 5 simple criteria warehouse managers should use to implement a new slotting plan

1. Vendor slotting or Source slotting – where items from the same vendor are slotted together.
2. Order commonality – where goods likely to ship together are slotted together.
3. Customer slotting – Where items that are common to a customer are grouped together.
4. Slotting by product type – placing similar products together.
5. Special storage requirements – used for goods that have special handling requirements

These 5 criteria help determine which sections of the warehouse operation need to be adjusted. For example, the choice of racking, direction and flow of picking etc.

Successfully implementing the chosen slotting configuration will lead to space maximisation, picking efficiency, reduced labour costs, better ROI all round.

pallet racking and Slotting

When discussing effective slotting, and the racking solutions you require, the focus should be on determining the level at which the product will be picked. For example, full pallet, case pick or piece pick. And then the storage medium from which product will be picked eg. pallet rack, shelving, carton flow, etc

Following this the tools that will be utilised to facilitate the order picking process such as paper pick sheets, voice-directed picking, pick to light, etc) need to be assessed, and the method of picking to be executed.

The primary consideration when conducting a slotting analysis and making these determinations is your SKU or product data.

SKU information such as product dimension, weight and on-hand quantity are all key factors when determining the proper storage medium, such as pallet racking, and your handling methodology.

Why not slot?

Many warehouse managers regard the whole process of creating a slotting plan as tedious, especially when they have to do it more than once per year.

But creating an effective slotting plan is one of the best ways to achieve a competitive advantage, as it can seriously reduce costs and boost efficiency.

Companies that handle seasonal products should  slot as the seasons change. Companies that handle mixed freight need to slot for an optimal facility.

Regardless of how they feel, slotting works. It saved a company £500,000 in increased labour costs. What could you do with an extra half million pounds?

Talk to the experts

Monarch Shelving is a leading supplier of new and used pallet racking and shelving in the North West.

We offer consulting, competitive prices and speedy delivery service. Call us today.