Maintain your slotting strategy by re-slotting as the inventory mix changes.
In a column written several years ago I reported a number of thoughts on choosing methods for slotting products in the pick face. They are all still valid. However, getting the slotting strategy right is only half the battle. The other half is keeping up with the changing dynamics of the inventory mix.
A typical first step is to choose the slotting strategy and the initial locations for all of the products from a comprehensive analysis of product activity and order data. With this, we can create the perfect pick face looking back at in time. But, the dynamics of today’s business often make shambles of yesterday’s data. And, no matter how good our original plan was, we will lose its benefit if we DON’T keep up with the changes.
Many factors continuously work at foiling our perfect plan. Product demand overruns forecast, or it fizzles. Marketing runs a promotion and the demand temporarily explodes. Dynamic pricing in online channels. The cube in the database is wrong and the products won’t fit in the pick face.
Many slotting systems automatically assign prime locations for new products based on projected activity—looking for empty spaces in appropriate activity zones. However, most slotting systems require manual intervention to reassign a product from one prime location to another. That is, slow moving products DON’T automatically remove themselves from good locations. If left on their own, they become “squatters” and eventually occupy all of the good space, forcing new fast movers to fit into the space that’s left.
These squatters have a creeping adverse impact on productivity and customer service. When products succeed well beyond expectations, their locations are no longer big enough to support picking activity without frequent emergency replenishment. If emergency replenishments are late, pickers lose time searching for products that are not yet there and then end up marking the item short.
Identifying and moving the squatters is the first step in keeping up with re-slotting. These products force the pickers to walk farther to get to the more active ones. If only we could magically get the fast movers to switch places with the slow movers.
Unfortunately, many warehouse management systems (WMS) need a quiet time with no outstanding activity to make these moves. This becomes especially difficult during peak activity periods—when re-slotting would benefit us the most.
So, the first step is to relocate the slow movers before the peak hits while you have the time. Then, keep some spaces empty in the best activity zones so unexpected fast movers can be re-assigned on the fly. Outstanding picks will be directed to the old location, but incoming orders will be directed to the new and better location. When the system is purged of all of the older orders, any remaining inventory can be consolidated into the new location.
Although specialized slotting management software may be warranted in many applications, it doesn’t take sophisticated analysis to find re-slotting opportunities. Simply rank emergency replenishment moves by frequency per stock keeping unit or check the picking activity in the best locations. Be sure to include both walk distance and the vertical golden zone.
DON’T be overwhelmed by the number of opportunities. Prioritize them by the expected value compared to the re-slotting effort. Start at the top of the list and DO as many as you have time for. The pickers will thank you—and reward you with much higher productivity.
As of September 8, 2020, Crimson & Co (formerly The Progress Group/TPG) has rebranded as Argon & Co following the successful merger with Argon Consulting in April 2018.