What Is Warehouse Slotting? Types, Benefits & Best Practices
A recent report found that on average, the eCommerce industry is anticipated to grow by almost 27.15% between 2022 and 2027.
Due to this uptick in demand, warehouse managers are faced with the challenges of handling more inventory and getting shipments out the door faster, without expanding the workforce or increasing the warehouse’s footprint.
One solution to these challenges? Warehouse slotting.
We’ll share everything you need to know about warehouse slotting, including types and best practices, and introduce you to automated warehouse solutions at Modula to help streamline your warehouse operations, from inventory storage to picking and beyond.
What is Warehouse Slotting?
Warehouse slotting, or inventory slotting, is the process of creating an efficient organization strategy in a warehouse or logistics facility.
The process requires you to identify the most efficient location for inventory to maximize space, reduce travel time and improve picking efficiency.
Warehouse slotting is usually organized by product type or stock-keeping unit (SKU) number and is categorized by fixed, random, macro and micro slotting.
Fixed Slotting vs. Random Slotting
Fixed slotting is an inventory slotting method used for products that have a permanent location. On the other hand, instead of having a reserved slot, random slotting is an inventory slotting method used for products that are assigned to an available pick zone.
Typically, fixed slotting is reserved for fast-moving items, such as electronics, while random slotting is utilized for slow-moving items, such as seasonal decorations.
Macro Slotting vs. Micro Slotting
While macro slotting is the process of arranging the overall layout of a warehouse, including the strategic placement of pick zones, aisles and storage areas to optimize the flow of goods, micro slotting is the process of organizing the specific placement of items within these designated areas.
This includes the specific placement of goods on shelves or in bins, the orientation of items for easy access and the grouping of products based on size, dimensions, weight or frequency of use.
Benefits of Warehouse Slotting
From minimizing travel time to increasing safety in the workplace, here are three ways warehouse slotting can improve your bottom line.
Optimize Warehouse Space
With efficient warehouse slotting, you can save valuable floor space in your facility and concentrate operations in a smaller footprint.
Making the most out of your existing space can help you save on the costs associated with a larger footprint — especially since warehouse space in the United States can cost anywhere between $16 and $20 per square foot.
With warehouse slotting, you can also adapt more easily to changes in inventory levels or product lines, maintaining operational efficiency without the need for constant physical adjustments.
Reduce Travel Time
With warehouse slotting, fast-moving inventory can be stored near the shipping area. This reduces the travel time for warehouse employees, resulting in faster picking and stock replenishment — increasing overall productivity.
Increase Safety
Whether it’s tripping over messy inventory or getting hit by falling items, a warehouse can be a breeding ground for workplace injuries if your goods aren’t properly stored.
With a well-planned slotting strategy, you can optimize the flow of employees and machinery to avoid congested areas, reducing the chances of warehousing hazards and accidents.
Warehouse Slotting Optimization Best Practices
From slotting inventory by SKU to educating your employees about slotting procedures, here are eight warehouse slotting best practices.
Organize Your Warehouse
Organizing your warehouse plays a key role in reducing travel time and ensuring that goods are easily accessible, as it streamlines the flow of operations and minimizes the physical effort required for stocking and picking.
Organization goes hand in hand with the principles of warehouse slotting, in which goods are strategically placed to optimize efficiency and accessibility.
To organize your warehouse:
- Utilize vertical space for storage to maximize your warehouse’s storage capacity
- Design your warehouse’s layout to streamline the flow of order fulfillment and improve bottlenecks and overall efficiency. For example, position the receiving area near storage areas to reduce the travel time.
- Periodically review and reorganize your warehouse layout to adapt to new products, seasonal shifts or changes in sales patterns
At Modula, our advanced automated storage solutions and retrieval systems help further optimize your inventory slotting thanks to advanced storage systems, like Modula Vertical Lift Modules (VLMs).
Modula’s VLMs are fully automated vertical storage systems that allow for a large inventory of goods to be quickly accessed while being stored in a safe and secure environment.
Working with limited ceiling height? Modula Horizontal Carousels (HC) are built to safely and efficiently store your warehouse inventory in one location.
Slot Inventory by SKU Velocity
From a sudden demand for beach balls in the summer to can’t-miss discounts during the holidays, seasonality can cause SKU velocity to change.
To compensate for spikes in demand, assess and create a stock distribution strategy to change inventory slotting layouts and achieve warehouse efficiency year-round.
To slot inventory by SKU velocity:
- Determine which products are or will be affected by seasonal demand
- Identify when peaks will occur
- Identify fast-moving items and place them near shipping area for easy access
- Consolidate SKUs that are frequently picked together in the same storage area
Slot Inventory by Zone or Equipment
Properly zoning each SKU, such as storing perishable goods in controlled environments, is key to efficient inventory management and safety.
To slot inventory by zone:
- Outline your warehouse picking zones
- Identify SKUs and their proper storage area — for example, keep perishable items in environmentally controlled areas and store flammable liquids in the flammable zone
In addition to slotting inventory by zone, you can optimize inventory slotting by storing goods close to each other based on the picking equipment used.
For example, items that require similar handling equipment, such as pallet jacks or forklifts, can be grouped together. This approach minimizes the time and effort needed for equipment operators to move between different types of machinery.
To slot inventory by picking equipment:
- Store heavy items in aisles that are close together
- Keep small parts in a different picking zone, away from heavy inventory
- If you use a forklift or scissor lift to pick inventory, make sure the storage aisles are wide enough to accommodate heavy machinery
Slot Inventory by Product Affinity Analysis
Product affinity analysis is the process of looking into consumer behavior to assess and identify which goods are commonly purchased together, then offering these items as a kit or bundle.
Examples of kitted or bundled items that can be sold together are ink cartridges and a printer or dry pasta and canned tomatoes.
To slot inventory by product affinity analysis, store bundled items next to each other
Slot Inventory by Special Storage Requirements
Slotting inventory by special storage requirements can help you optimize warehouse operations, enhance safety and improve inventory management.
To slot inventory by special storage requirements:
- Assess each item for its specific storage needs, such as temperature control or humidity levels.
- Allocate dedicated zones in the warehouse for different storage requirements. For example, create separate areas for refrigerated goods, dry storage and hazardous materials.
- Use specialized storage equipment and materials that cater to the needs of different goods. For example, use insulated containers for temperature-sensitive goods and spill containment pallets for liquids.
Modula clean rooms and temperature-controlled environments can store perishable goods and optimize your refrigerated picking zones.
All of our controlled environment storage systems feature temperature variations that meet industry standards and regulations, and protect goods from contaminants.
Rank Slots by Priority
Assign priority levels to each slot in your warehouse based on factors such as item size, weight and SKU velocity.
High-priority slots should also be easily accessible and located closer to the packing and shipping areas to make sure that the most frequently picked items can be accessed and dispatched with minimal delay.
To rank slots by priority:
- Regularly review sales figures and usage patterns to identify which items are transported more frequently and determine which items are high priority.
- Perform ABC analysis to categorize inventory into three groups: ‘A’ for high-value items with low frequency, ‘B’ for moderate value and frequency and ‘C’ for low-value but high-frequency items. This inventory management technique can help prioritize the placement of goods in your warehouse.
- Allocate slots based on their weight and size. For example, place large items in areas where they can be easily moved without blocking pathways. Allocate smaller inventory to higher shelves or compact storage units in which space can be optimized and items can be retrieved without physical strain.
Invest in a Warehouse Management System
An advanced warehouse management system can significantly enhance your slotting strategy, as it provides real time data on your inventory, tracks item movement and can suggest optimal slotting arrangements based on changing demand patterns and inventory levels.
Modula’s Warehouse Management System (WMS) is expertly engineered to seamlessly integrate with our cutting-edge automated storage and retrieval systems, creating a cohesive and efficient warehouse management experience.
Tailored to optimize and streamline operations, Modula’s WMS provides a user-friendly interface for effortless management and real time inventory monitoring.
Train Your Employees on Slotting Procedures
Educate your employees on slotting procedures to equip them with the skills needed for managing inventory and ensuring accurate placement and tracking.
To train your employees:
- Conduct workshops or training programs that cover the basics of slotting and the importance of accurate inventory placement and tracking.
- Provide on-the-job training to show employees the process of warehouse slotting. This can include demonstrations on how to manage different types of inventory and organize items based on their size, weight and SKU velocity.
- Pair new employees with experienced staff who can offer guidance and share best practices for efficient slotting and inventory management.
A Quick Recap on Warehouse Slotting
To recap, warehouse slotting or inventory slotting is the process of creating an efficient organization strategy in a warehouse.
This process is typically dependent on SKU number, SKU velocity, product type, product groupings and other factors, to determine the ideal warehouse setup.
At Modula, we offer intuitive and state-of-the-art automated solutions to optimize the slotting process. Contact our team to learn how our technology can be tailored to your needs.
Our experts are ready to provide personalized advice and solutions for your warehouse.
