Warehouse Slotting – A fundamental organizing principal in a DC
By Charles Fallon
July 27, 2017 | 3 min read
Re-engineering a pick line to optimize warehouse slotting has far-reaching effects on labor productivity and quality. While it may be tedious to reset slotting for thousands of products, the benefit is well worth the effort.
The Situation
A grocery wholesaler distributing specialty foods from a 350,000 sq. ft. DC knew their picking productivity was below what it should be. The facility had a long pick line and an ever-growing SKU base. Slotting had not been touched in years. Compared to its peers, the DC performed in the middle of the pack.
Issues & Decisions
Few distributors do a good job of maintaining their slotting and the proliferation of new SKUs puts additional pressure on the pick line. In a typical distribution center, 50% of all items are in the wrong slot type and the labor penalty can be 20% or higher.
Warehouse slotting is the fundamental organizing principle of the distribution center with important impacts on:
- Inbound direct labor functions such as replenishment and putaway
- Outbound direct labor functions such as picking
- Throughput capacity in conventional, mechanized and automated facilities
- Error rates – LIDD’s analyses have shown that improper slotting can measurably increase error rates in the warehouse
- Damage and product stability in outbound transportation
- Customer service and labor at the customer site
The Results
We re-engineered the warehouse pick line strategy, introducing a new handling system for slow-moving SKUs that created sufficient capacity to provide fast-moving SKUs with larger slot types. This eliminated 20% of replenishment tasks in the process. We also re-sequenced the pick line to eliminate the need to “re-stack” outbound pallets due to poor product sequencing. We developed an implementation plan that revised the warehouse’s slotting over a period of six months without affecting on-going operations. Post-implementation, direct labor productivity increased 15%. After spending years scoring in the middle of a benchmark of its peers, this distribution center became the most productive facility in the group.
Want to learn more about warehouse pick lines and slotting? Check A Guide to Distribution Center Slotting to uncover best practices.
Reach out to the LIDD team to learn more about warehouse slotting and optimizing your warehouse operations.