– Supply Chain Insight –
Optimizing Slotting Strategies: Webinar Debrief
Nearly a month has passed since we released what will end up being our most viewed webinar to date – in terms of views over the first month – so I thought I would post a bit of a recap – or debrief if you will – for those who weren’t able to attend or watch the replays.
As we sent out the invites to our LinkedIn followers and those on our usual contact list, we were encouraged not only by the number of registrations but by who was registering.
Being in the fulfillment optimization business, we know how important an optimized slotting strategy is to maintaining efficiency within a distribution operation. However, as we also know that it’s one of many high priorities for supply chain executives, we’re aware that it sometimes falls off the radar during busier times of the year or if other large-scale projects are on-going.
We usually have a large executive presence in our webinars and educational sessions, but this one was especially well attended by supply chain leadership.
This tells us one thing: organizations are prioritizing profitable growth over all else and warehousing and distribution leaders in particular are feeling the pressure to increase productivity and lower unnecessary costs.
We always refer to ourselves as the “nuclear option” when it comes to increasing productivity and lowering unnecessary costs within a distribution operation. It’s because of this that we typically end up working with industry trailblazers and best-in-class operations.
Implementing an optimized slotting strategy, however, is no longer the “secret weapon” for the best-in-class. The cat is out of the bag so to speak, and it’s now apparent that it’s not just for the trailblazers and those looking for that extra-edge anymore. Simply put, if you don’t have an optimized slotting strategy for your operation or network, you are falling behind.
That said, let’s get into the main topics discussed.
The first part of the webinar – and probably the most important for those starting out – discussed 5 fundamental principles of true fulfillment optimization. These 5 principles lay the foundation for any strategy and should be non-negotiable.
Use operational data that captures all relevant functions within your operation. This means everything from receiving and pallet putaway to replenishments and selection travel. True optimization is about refining within constraints and understanding trade-offs. If you don’t have all the data, this is impossible.
Express each function in terms of activity drivers. This means everything from pallets received to miles traveled for order selection. This is the first step in creating a current state baseline that breaks down labor requirements to where they can be easily assessed and quantified.
Translate activity into resources. Activities then need to be translated into resources required e.g., man-hours, dollars, etc. This is where the impact of current productivity and efficiency levels is uncovered and assessed.
Use optimization function to achieve goal while considering constraints. This is where choosing the right optimization tool comes in. With the sheer number of variables at play, this tool must have robust analytics but also be flexible and customizable enough to adapt to the unique requirements and constraints of your operation.
Recalculate activity drivers and resources based on recommendations. Last but certainly not least, the activity drivers previously calculated must be re-calculated based on recommendations. This illustrates the opportunity between current state and ‘optimized within constraints’. It should be comparable, highly transparent and, above all, actionable.
After we established the foundation of true fulfillment optimization, we moved on to discussing the difference between daily slotting and mass slotting, providing advantages and drawbacks of each, and why both are critical to an effective slotting optimizations strategy.
From a high-level, the advantages of mass-re-slotting are obvious. It’s a one-time project, carried out over a certain period of time (days or weeks, depending on the operation and resources available) that is meant to adjust an operation to fit current requirements and increase productivity, capacity and order throughout, among other things.
The benefits are also usually immediate. The biggest downside, however, to this strategy is the disruption it causes to an existing operation, and also the resource and time-commitment required. Additionally, there a potential substantial risk to the strategy not being carried out fully and the ROI eroding over time.
When it comes to the advantage of daily slotting, especially for seasonal and high-volume operations, you essentially get the same benefits of mass slotting without the up-front cost, risk and disruption. The downside is that the benefits accrue over time so it does take a commitment to small marginal gains.
I also talked about my 4 pillars of success when it comes to implementing an optimized slotting strategy or refining an existing one, whether you’re focused on daily optimization or mass-re-slotting. I’ve been through a number of implementations of both strategies, and I can tell you that your project is at risk if even one of these pillars is missing. I go into much more detail in the webinar, but here they are at a high level.
Accurate and detailed operational data must be leveraged whether you’re working on daily slotting optimization or a larger scale mass re-slot initiative
Consistency is crucial to the success of any slotting optimization initiative. It’s evident that it’s very important for daily optimization but when it comes to mass-re-slotting initiatives, if there’s no plan on how to consistently manage the strategy after the mass-re-slot, your ROI is going to be heavily eroded or non-existent by the time you’re ready to evaluate success.
Make sure you’re leveraging the proper tools, not just when it comes to the data itself but analytics and execution as well. Don’t sell your team short when it comes to providing the proper toolbox. Even the most experienced carpenter would not show up to the job site without a hammer and a tape measure.
Leadership, as you may have expected, is the final pillar. Any company initiative that lacks leadership, alignment, and direction is bound to fail. A daily optimization or mass re-slotting initiative may not always be the top priority in an organization that has many, but the right attention and resources must be allocated to its success nonetheless.
We concluded the webinar with some recent case study examples that we’ve never released before. To discuss them here would do an injustice to the depth and impact of the strategies implemented. To get the full explanation, you will have to attend the webinar next time it’s available, but it just so happens that this content will be made available every month for those interested in registering. It is offered at no charge, but you won’t find it on our LinkedIn page or be able to watch it on our YouTube channel without a special link.
As mentioned, we are the nuclear option for those who are driven to improve. The first step, however, starts with you.
If you’re interested in catching the webinar the next time it’s available, be sure to either follow us on LinkedIn to ensure you’re on the invite list or reach out to us directly at email@example.com to request our future webinar schedule.
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