Warehouse Slotting to Optimize Inventory Space

If it seems like you’re always running around the warehouse looking for different items that are nowhere to be found, you could probably benefit from warehouse slotting. In fact, most businesses could benefit from warehouse slotting! So if you aren’t already doing it, this is the article for you! Read on to learn about how you can use warehouse slotting to optimize your inventory space, improve your order accuracy, and get your orders out faster. 

What Is Warehouse Slotting?

Warehouse slotting involves organizing a warehouse to make the entire shipping and handling process more efficient. Slotting includes placing items in the best possible location, for example, according to item weight, size, popularity, perishability, etc. While this concept may seem rather simple at first glance, there’s more to it than meets the eye! 

For example, there’s macro-slotting and micro-slotting. Macro-slotting deals with the overall layout of the warehouse. Micro-slotting deals with placing individual items or pallets on the shelves. 

Benefits of Warehouse Slotting

While it’s always tempting to go with the “if it ain’t broke don’t fix it” approach, this approach doesn’t necessarily work well within inventory management. And even though it may seem like the work you put in to organize your warehouse won’t actually end up benefiting you in the long run, that’s definitely not the case. Here are just a few benefits of warehouse slotting to convince you:

• Warehouse slotting helps improve the picking process. Slotting that makes sense for the pickers can increase the accuracy and speed of the picking process. Just because something makes sense to you doesn’t mean it makes sense to everything else. As a result, warehouse slotting is a great way to ensure that your items are placed in the best possible location for a quick and seamless picking process. As a result, you can quickly send out orders to your customers that are 100% accurate every time. 
  
  
• Warehouse slotting helps reduce your carrying costs. For example, you may think that you need additional warehouse space to store your products but you really just need to be better organized. You may also think that you need to hire additional warehouse workers to get orders out more quickly but you really just need to create a better system that makes sense to them. These are big costs that can add up really quickly -- and can be avoided by proper warehouse slotting. 
  
  
• Warehouse slotting helps prevent product losses and damages. For example, perishable items need to be stored in a specific way and can result in spoilage if they aren’t stored properly. Heavier products will not be placed on top of small or fragile items that could lead to damage. It will also be harder to lose items now that everything has a place and can easily be located. 

Slotting Best Practices to Optimize Inventory Space

Before you start the slotting process, you’re going to need a lot of data in order to do it properly. Typically this data can come from your warehouse management system. Some of these systems even have built-in or add-on slotting features that you can utilize to make the entire process easier. That being said, if you don’t have existing software, this data can be organized in other ways, possibly through programs like Excel. 

Here are some of the different pieces of data that you’re going to need:

• SKU numbers and descriptions
• SKU sizes and weights
• Number of times every SKU is picked
• Number of SKUs picked per order
• SKUs that are frequently picked together
• Number of pallets, cartons, and cases of each SKU
• Total SKU quantity, reorder point, and reorder quantity

Once you have that data, you need to conduct an audit of your warehouse as it currently operates. You should identify any areas of open or wasted space. You should identify any areas with too many products that are difficult to pick. You should also identify any problem areas that are particularly hard to access. Part of your audit should include talking to and getting feedback from your pickers about any common issues that they come across as they’re gathering orders. 

Different Slotting Strategies to Consider

After you’ve laid the groundwork, it’s now time to actually implement your slotting strategy! It’s always a good idea to start with a clean, safe, and organized warehouse. This involves removing extra supplies that are no longer needed and are just getting in the way. It also involves removing old or damaged products that you can no longer sell. 

From there, you need to rank your SKUs based on velocity using the “ABC” method. For example, those SKUs with the highest velocity should be the most accessible and should be in the “A” category. On the other end of the spectrum, those SKUs with the lowest velocity should be towards the back of the warehouse and not as easily accessible within the “C” category. All the items in the middle with medium velocity should fall in between those groups within the “B” category. 

Even though SKU velocity is key in warehouse slotting, it’s definitely not everything! Once you have a general idea of where you need to place certain items based on velocity, you need to think more about specifics. For example, you need to consider SKU size and weight to ensure that they are placed in the best possible location. You also need to consider how these items are being accessed within the warehouse, either by hand, ladder, forklift, etc. 

When you’re trying to place items in this stage, also consider grouping SKUs that are commonly picked together. Remember when you pulled that data earlier? Now is the time to use it as it can be extremely useful. For example, say a sporting goods company sells baseball equipment. You may want to include baseball bats, baseball gloves, and actual baseballs all together in one area even though you may sell more baseballs than the other items. This is because odds are that if someone is buying baseballs, they’re likely to buy a bat and a glove too. While this is a pretty obvious example, some trends are less obvious which is why analyzing your data beforehand is important. 

Another thing you need to consider when planning out your inventory is worker safety. Your employees are way more valuable than your products and you need to treat them as such. This means not placing really heavy items on high shelves that would be difficult to take down. This also means investing in the proper equipment that your employees need to safely pick orders. At the end of the day, your employees will work harder in a safe and efficient environment -- so make sure that your warehouse fits the bill through warehouse slotting. 

Finally, the last thing you need to consider about warehouse slotting involves adjustments. After all, your business is constantly changing and odds are your orders will too. One layout may make sense now but may not make sense in the future. On the other hand, you don’t want to make constant changes all the time that will only end up confusing your pickers. This is why warehouse slotting involves finding a happy medium between going with the flow and letting things be. 

Other Tips to Optimize Your Inventory Space

While warehouse slotting is a great way to optimize your inventory space, there are other steps that you can take to truly get the best results. For example, consider not just your product inventory but also your packaging products. When not stored properly, you could end up wasting a ton of money on packaging products that either go to waste or cost you a fortune in storage costs. 

This is why we at BoxGenie recommend that you store your packaging products safely and away from water and heat. Corrugated cardboard boxes are a great packaging option as they can be stored flat to cut down on storage costs. That being said, you still need to make sure that your boxes are easy to assemble so your workers aren’t spending unnecessary time putting them together. 

BoxGenie offers a range of durable, easy-to-store, and easy-to-assemble packaging solutions that can be designed specifically for your unique brand. For example, you can choose the size, quantity, and color of your packaging while designing a custom creation that reflects your brand logo, colors, fonts, etc. If you want to really make an impression on your customers, check out their design studio or talk to a packaging expert to create the best packaging solutions that make sense for your warehouse.  

Final Thoughts on Warehouse Slotting

Warehouse slotting can be a time-intensive process but when done right, it’s well worth all the time and effort. Warehouse slotting is key to getting your orders out accurately and efficiently -- and satisfying your customers as a result! 

Sources:

1. https://safetyculture.com/topics/warehouse-safety/
2. https://www.inc.com/joshua-conran/why-your-product-s-packaging-is-as-important-as-the-product-itself.html
3. https://smallbiztrends.com/2020/03/unboxing-experience.html