Rules-based slotting

By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 1/17/2006

As the demand for a product changes, so should the storage and replenishment strategies, says Noah Dixon, vice president, product management, Catalyst International (800-236-4600).

Slotting optimization systems can adapt to those changes. But slotting can also be used to optimize the warehouse in ways that go beyond demand, Dixon adds.

For instance, slotting allows some users to enforce union requirements for ergonomics. “One of the big three automakers operates parts distribution centers,” says Dixon. “Because they have lots of different types of parts, slotting allows them to make better use of the facility,” says Dixon. “But the system also takes into consideration the ergonomic requirements in their union contracts when it’s determining the best putaway location for a product.”

Some retailers use slotting optimization tools to determine the best putaway location for seasonal products that have been carried in the past, or the ideal location for new products that may be in the facility for a short period of time.

“With seasonal products that are shipped every year, the system can slot based on an item profile from the year before,” says Dixon. “For new products that will only be in the facility for a few weeks for a promotion, the slotting optimization tool can download a sales forecast to determine the best location for the promotion.”

Other distributors use slotting optimization tools to enforce putaway policies. “They may not be concerned about the specific putaway location,” says Dixon. “But they may want the product in a specific picking area because it’s a high mover. In those instances, they create putaway policies so that whenever that product or SKU is received, it goes into an area.”

Still others do dynamic slotting. These are facilities with a limited number of pick faces that may change with every shift. “In those situations, it’s common for them to change slotting parameters on a dynamic basis as waves of orders are released to the floor,” says Dixon.

Finally, networked slotting tools can be used to slot an entire network of facilities from one central implementation of the software. “We have one customer who slots a number of warehouses with just one person,” says Dixon. “They simply set up separate rules for each warehouse, and then execute against those rules from a central location.”