SI Systems spots slotting trends in warehousing and distribution

As the number of SKUs increases, SI Systems says managing slotting locations is more important than ever.

By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 7/16/2007

A game plan is only good until the first kick-off. Once the pads collide, things change. The team that adjusts most efficiently is usually the winner. 

The same holds true when it comes to slotting products in the distribution center, according to Drew Green, information technology director for SI Systems. 

Before a new materials handling system is installed, Green says, companies develop a game plan – a planograph –for slotting product in storage and picking areas that optimizes the equipment in a facility based on the demand for product. 

Generally speaking:

• slow moving items go in manual picking areas, and
• fast moving items are stored in automated picking areas.

Then the system goes live, and the real world of product collides with the plan. “As time goes on, new products are introduced, other products are no longer sold, and the demand for what remains changes,” says Green. 

Too many companies, however, never adjust their slotting strategy. 

“I met with a potential customer the other day that felt their facility was no longer efficient,” says Green. “They’ve been in their building for 10 years and never reslotted their inventory.” 

The result, says Green, is that “customers that don’t reslot either spend more money on labor than they need to or feel they need another automated pick area to improve throughput, when in fact all they need to do is reslot their products.” 

There are several approaches to reslotting. 

• Some manage slotting with spreadsheets and then manually direct the reslotting. While that works, it’s time consuming and uses a lot of resources.
• Others develop software in house to manage slotting.
• Some Tier 1 WMS packages include slotting optimization tools that manage the location of products based on demand and velocity. Those systems incorporate reslotting into the workflow of the facility.
• SI Systems has developed an on-demand slotting software tool that is offered as a service. 

“Customers can enter their data into the system, which analyzes the picking velocity and physical characteristics of products against a prioritized list of picking areas,” says Green. “We can then generate a recommended slotting strategy based on the type of picking done in an area.” 

The system also gives customers the ability to select the products to be moved based on the cost savings that will be generated by reslotting. 

“We have one customer that moves 100 products once a month because that gives them the benefit they need,” says Green. “We have another customer that runs a new slotting plan every night. They see that if they make 20 moves a day, they can increase their efficiency enough to make it worth their while.”