Warehouse Slotting – A fundamental organizing principal in a DC

July 27, 2017 BY Charles Fallon

20170705 - pick line.jpg

Re-engineering a pick line to optimize warehouse slotting has far-reaching effects on labor productivity and quality. While it may be tedious to reset slotting for thousands of products, the benefit is well worth the effort.

The Situation - A grocery wholesaler distributing specialty foods from a 350,000 sq. ft. DC knew their picking productivity was below what it should be. The facility had a long pick line and an ever-growing SKU base. Slotting had not been touched in years. Compared to its peers, the DC performed in the middle of the pack.

Issues & Decisions - Few distributors do a good job of maintaining their slotting and the proliferation of new SKUs puts additional pressure on the pick line. In a typical distribution center, 50% of all items are in the wrong slot type and the labor penalty can be 20% or higher.

Warehouse slotting is the fundamental organizing principle of the distribution center with important impacts on:

  • Inbound direct labor functions such as replenishment and putaway
  • Outbound direct labor functions such as picking
  • Throughput capacity in conventional, mechanized and automated facilities
  • Error rates – LIDD’s analyses have shown that improper slotting can measurably increase error rates in the warehouse
  • Damage and product stability in outbound transportation
  • Customer service and labor at the customer site

The Results - We re-engineered the warehouse pick line strategy, introducing a new handling system for slow-moving SKUs that created sufficient capacity to provide fast-moving SKUs with larger slot types. This eliminated 20% of replenishment tasks in the process. We also re-sequenced the pick line to eliminate the need to “re-stack” outbound pallets due to poor product sequencing. We developed an implementation plan that revised the warehouse’s slotting over a period of six months without affecting on-going operations. Post-implementation, direct labor productivity increased 15%. After spending years scoring in the middle of a benchmark of its peers, this distribution center became the most productive facility in the group.

Want to learn more about warehouse pick lines and slotting? Download LIDD’s eBook A Guide to Distribution Center Slotting to uncover best practices.