According to a study, picking accounts for 50% of warehousing costs. It takes up most of your time and labor to locate and collect items for order fulfillment.
Warehouse slotting reduces the time needed to locate items by systematically organizing them. It analyzes your inventory data to categorize items by how fast they turn over and assign storage locations based on priorities such as demand.
In this article, we’ll explore practical warehouse slotting strategies, their benefits, and best practices.
What is Warehouse Slotting and How Does it Work?
Warehouse slotting refers to organizing items based on specific factors like product demand, picking methods, or warehouse layout. For example, if a certain product is in demand, slotting techniques bring it closer to picking zones. This allows pickers to easily retrieve items for faster order fulfillment.
Here’s how it works:
When shipments arrive in the warehouse, warehouse slotting uses predictive analysis to assign storage locations. Each item is categorized, labeled, and placed accurately, either closer or far from packing zones to meet stock-keeping unit (SKU) demands.
Warehouse slotting techniques often use advanced warehouse management system (WMS) tools to analyze the order history of specific SKUs. This helps categorize items by a specific priority such as product characteristics or demand.
These systems further help workers locate and pick items quickly using handheld devices that show where each item is placed and the best path to take during retrieval.
Benefits of Warehouse Slotting Your Inventory
Slotting your warehouse inventory offers the following benefits:
1. Saves Storage Space
Warehouse slotting optimizes storage layouts by adjusting shelves, racks, and pallets to meet SKU requirements and reduce wasted space. For example, smaller SKUs, like electronics accessories, are stored in compact bins on lower shelves for quick access. Larger SKUs, such as furniture or bulky equipment, are assigned to pallet racks or higher shelves to maximize floor space.
2. Control Picking Traffic
Warehouse slotting reduces high-traffic picking by designating specific areas based on product demand and size. For example, bulky items like large appliances are stored in large-aisle zones, while smaller items are in smaller zones. This separation allows forklift operators to retrieve items without causing picking delays.
3. Improves Order Picking
Slotting minimizes travel distance by placing items closer to picking zones. This allows workers to pick and sort orders faster.
4. Smart Inventory Management
Good inventory management means faster order picking and fulfillment. Slotting strategies minimize the chances of misplaced inventory, mispicks, and inaccuracies in stock level through proper categorization and placement.
5. Adaptability to Demand
Warehouse slotting organizes inventory to meet changing order volumes, growing stock levels, and multiple client orders quickly without disrupting workflows.
While warehouse slotting offers many benefits, knowing which strategy to choose for your specific needs is important. Let’s take a look at a few of these:
10 Warehouse Slotting Strategies You Should Know
Fixed Slotting vs. Random Slotting
1. Fixed Slotting
Fixed slotting is when you place specific items in designated locations by product characteristics. When orders arrive, warehouse staffers pick items from the designated bins and update inventory levels on advanced software or manual systems like pick-to-light (a system that uses lights to guide pickers to the correct items) or voice commands for smoother workflows.
Fixed slotting is best for: Warehouses with manual systems like pick-to-light, or a consistent inventory.
2. Random Slotting
In random slotting, items are placed at any available space or pick zones based on the item’s physical characteristics, such as type, weight, and size.
Workers collect items from picking zones without traveling long distances but need advanced software like Da Vinci’s WMS to assist with grouping multiple orders, assigning picking methods (batch, zone, or wave), managing item placements, and tracking inventory levels.
Amazon warehouses adopt random slotting to store incoming orders but then can use AI-powered warehouse management systems to accurately locate, pick, and sort items during order fulfillment.
Random slotting is best for: Warehouses with seasonal products or frequent inventory turnover.
In short, fixed slotting works well with predictable workflows, while random slotting adapts to meet frequently changing demands.
Macro Slotting vs. Micro Slotting
3. Macro Slotting
Macro slotting organizesthe warehouse layout and design by arranging storage areas, shelves, and picking zones.
4. Micro Slotting
Micro slotting goes specific by designating item placements to bins or pallets in a picking zone. This method helps pickers collect items often grouped faster while saving time.
Macro slotting focuses on the broader organization of a warehouse, while micro slotting deals with the finer storage details.
For example, a 3PL warehouse might use macro slotting to divide its storage into zones based on product categories or client-specific needs. Micro-slotting optimizes the placement of items within those zones, such as placing high-demand SKUs at eye level or storing products often ordered together closer to each other.
5. Demand-based Slotting
Demand-based slotting places high-demand items in accessible areas, helping your workers quickly locate and pick items during peak order volumes.
Fast-moving items are placed closer to picking zones, while slower-moving items are stored in less accessible areas, like high shelves or the back of the warehouse.
Demand-based slotting is best for: 3PL or e-commerce warehouses with varying demand patterns and multiple clients.
6. ABC Algorithm Slotting
ABC algorithm uses the Pareto Principle (80/20 rule), which suggests that 20% of the items (high demand) drive 80% of your warehouse activity. In simple words, optimizing the storage of your high-demand items can improve your order-picking process.
Warehouse management systems like Da Vinci provide algorithmic optimization by analyzing your warehouse’s data such as demand patterns, order history, and key metrics, to help you group items into three categories:
- Category A: High-demand items (first 50%) are stored closest to the picking zones (location A).
- Category B: Medium-demand items (next 25%) are kept in mid-level zones (location B).
- Category C: Low-demand SKUs (the last 25%) go to farther areas to save space (location C).
ABC Method is best for: 3PL warehouses with frequent inventory turnover that need algorithmic slotting to optimize storage space.
7. Product Affinity Slotting
In product-affinity slotting, you place items that are often grouped closer to each other near picking zones. This technique helps employees pick related items faster without traveling long distances.
Product affinity slotting is best for: E-commerce warehouses with bundled product sales.
Other Popular Slotting Techniques
8. Seasonal Slotting: Items are moved closer to picking zones during peak seasons.
9. Ergonomic Slotting: This technique arranges items to reduce worker’s physical strain or injury. For example, placing frequently picked items within the waist to shoulder height to minimize bending, reaching, or climbing.
10. Special storage slotting: This method organizes items by size, sensitivity, or value. For example, expensive or fragile items are placed in locked, secure areas to protect them from theft or damage.
Best Practices to Implement Slotting in a Warehouse
Whatever slotting strategies you choose, here are some best practices for implementing slotting in your warehouse:
#1: Prioritize by Demand Correlation
Demand correlation refers to products frequently ordered together. By analyzing your order history or using an advanced WMS tool, you can identify these items and group them into the same category. Placing them near picking zones reduces travel time, helping workers complete orders faster.
#2: Calculate Your Storage Capacity
Warehouse slotting won’t work if you don’t know how much space you have. You should know your warehouse’s storage capacity and how it is being used. This allows you to make better decisions when you assign items to a specific storage area, zone, or shelf.
#3: Store SKUs by Item Size or Type
There are two ways to store your items: by item type or level.
Store bulky items on higher shelves and keep equipment like forklifts nearby for easy handling. Place smaller, individually-picked items at eye level and close to packing zones. This setup reduces the need for extra equipment and cuts down on unnecessary walking, making retrieval faster and easier for your workers.
#4: Learn from Picker Feedback
Pickers’ feedback helps you understand how you can better store items, provide safety, and improve workflows at your warehouse. Many warehouses involve pickers during slotting arrangements to identify operational gaps in order picking and packing for better implementation.
#5: Invest in a WMS Software
A warehouse management software (WMS) tracks your inventory and suggests the best storage locations using algorithmic capabilities based on present demand patterns and order history.
Cloud-based WMS like Da Vinci can track items (using scannable bar codes), group similar orders, and assign optimized picking paths to workers in real-time. With mobile devices, pickers can quickly locate and retrieve items, instead of looking at manual spreadsheet lists.
If you’re a 3PL warehouse, investing in WMS software can help optimize your inventory for multiple client profiles. Da Vinci gives you configurable control over your entire fulfillment ecosystem.
This allows you to adapt any slotting strategies to your warehouse operations while ensuring you make well-informed decisions with real-time data.
When to Implement Re-Slotting in Your Warehouse
It’s often suggested to re-slot your inventory on a yearly basis, but this may not apply to every warehouse.
Here’s when you should re-slot your inventory:
- Changes in SKU demand: If your current storage doesn’t align with changing SKU demand, you need to re-evaluate your inventory distribution to meet consumer demands on time.
- Picking Errors: Irregular inventory placements often cause picking errors. Re-slotting helps organize items by size, type, or demand for better visibility during the picking process.
- Increase in order volume: Warehouses with an increase in order volume don’t have the right resources or time to implement re-slotting. Cloud-based WMS offers faster integration into your existing systems to access inventory data and re-slot your items quickly without disrupting your order fulfillment workflows.
How Da Vinci’s WMS Assists with Warehouse Slotting Optimization
Da Vinci’s warehouse management system (WMS) uses smart algorithms to help you manage inventory, reduce picking errors, and fully utilize your storage capacity.
With advanced features like real-time inventory tracking, reporting dashboards, barcode scanning, item grouping, and optimized routing, our software can meet changing demands and growing inventories of your warehouse.
Our AI-powered analytics use historical data to understand your current warehouse performance. It then uses algorithmic optimization to identify and store high-demand items closer to packing and shipping areas.
Da Vinci’s cloud-based software integrates into your existing systems, allowing you to slot your storage frequently without workflow disruptions.
Additional features like grouping items by demand, redirecting shipments to outbound trucks, and optimizing package size help speed up order fulfillment and clear storage space.
Da Vinci empowers businesses of all sizes by quickly integrating into their existing systems to organize inventory and assign storage locations. Request a demo to learn more about how you can implement WMS to optimize your warehouse slotting and reduce operation costs.
FAQs
What is slotting in logistics?
Slotting in logistics is the process of managing how items are stored in a warehouse. The goal is to save maximum storage and place relevant items in easily accessible areas for faster order fulfillment.
What is the purpose of slotting?
Slotting is critical to a warehouse’s bottom line. It organizes items by categorizing them based on factors like warehouse layout, picking methods, size, and demand for better visibility during order picking.
What is the ABC slotting strategy?
ABC slotting strategy uses smart algorithms to store items in a warehouse. The algorithms analyze SKU order history (past 30 days) to group items into three categories: A for high-demand items, B for mid-demand items, and C for low-demand items.
What are the 4 types of warehouse layouts?
The four types of warehouse layouts are:
- U-shaped layout: Receiving and shipping areas are on the same side.
- I-shaped layout: A straight-line flow from receiving to shipping.
- L-shaped layout: Receiving and shipping areas are positioned at a right angle.
- Straight-through layout: A linear flow of goods.