– Supply Chain Insight –

The key to managing velocity-based slotting

One of the more effective slotting concepts could easily turn into one of your biggest productivity bottlenecks if not managed properly.

Borrowing a line from the Beach Boys, wouldn’t it be nice to be able to just slot all of your fast-moving items close to your dock?  That may be a viable solution to cutting selection travel for some but it’s the exception in case-pick environments.  If you’re in grocery, you’re probably even having a chuckle at the thought.

In case-pick environments – especially within those where the items are different shapes, sizes, weights and have varying storage requirements – proper sequencing is critical to not only maintaining product integrity but keeping those pallets fully utilized and sturdy.  If your pallet is falling over, or fragile items are being stacked under heavier boxes, it won’t matter how productive your order selectors are.

Other considerations include retail store planograms, temperature control, food safety compliance, and the proper storage of hazardous goods i.e., oils and aerosols.  You get the point; sequencing is important.

Instead of your layout looking like this….

It’ll look a lot more like this…

Furthermore, not only do items typically go through peaks and lulls – depending on the season – the average operation will cycle through up to 50% of it’s active SKU variety in one year.  Not only do your storage requirements change throughout the year, but you’re also constantly adding and subtracting new items as you progress through the year.

Your job as a warehousing and distribution professional is to maximize throughput and minimize costs within your constraints.  Fortunately, although you can’t control which items move fast and which items move slow, there are a few velocity-based concepts that you can use to maximize your picking productivity.

Although there are a number of great automated solutions that can be used to maximize throughput for fast- and slow-moving items, I’m only going to be discussing conventional options today.  The reality is, while adding automation can certainly boost your operation in ways conventional solutions could never reach, it’s not always a viable solution, nor should it be the first solution before getting the most out of your existing equipment. Most automated modules still require logic to govern how they’re utilized – no different than conventional racking.  If you want to maximize your investment, you need to ensure your foundational logic is in place.   I’ll explain that in a little more detail more towards the end of the article.

So, in a conventional layout, here are some practical and simple (with the right tools) concepts that will help you maximize throughput for your exceptionally fast and annoyingly slow items.

Let’s start with your fast movers

Proper material handling systems

This isn’t so much a concept as it is just a reminder that there’s hardy a bigger drain on productivity and overall throughput than a fast-moving item being stored in a sub-optimal material handling system, otherwise known as a profile that is too small.  When this happens, you will notice an increase not only in inbound pallets putaway, but also in replenishments and pick shorts.  Regardless of many items fit into your “fast-moving” bucket, these items should be leveraged for maximum productivity and throughput.

Opportunistic cross-docking

We’ve seen this work very effectively within operations where certain items are shipped in full pallet quantities.  Although, traditionally, these items would be picked from reserve locations, an opportunistic cross-docking strategy would keep the fastest moving items within this category in pre-determined staging lanes closest to the shipping dock.  This not only removes outbound forklift travel to pick the item from reserve (which, as discussed earlier, could be anywhere in the facility) but it eliminates the putaway activity as well.  There are two caveats here, of course.  The first – and most important – is that you have the physical room to carry out this strategy.  Creating extra congestion on a dock will have the opposite effect you’re looking for.  The second is that you have items that fit this profile in the first place.

High-velocity zones

The addition of high-velocity zones can be effective but only if they’re managed properly and your operation is shipping the right profile of items. The idea behind this concept is that you have enough fast-moving items to fill up the pallets on your pallet jack (whether you’re using singles or doubles) within a condensed and dedicated footprint.  For larger facilities, this can be a very effective way to minimize selection travel for a subset of larger orders that would typically require multiple pallets and multiple trips through the pick path.

And now those pesky slow movers…

Addition of hand-stack or case-flow racking

I can hear the groans from operators while I write this.  While they’re not a fit for every operation, especially if they’re not used properly.  Operators usually don’t like using this type of racking because they can prove to be a bottleneck if you’re not on top of what items are slotted in them.  Replenishments are done by hand and, in operations where products look very similar, it can cause confusion among order selectors.  The fact is, used properly, hand stack and/or case flow racking are very effective material handling options for reducing the footprint for your slow-moving items.

Very Narrow Aisle (VNA)

The very narrow aisle concept (6’ aisles instead of the typically 12’-13’) is a larger scale version of just adding hand-stack or case-flow racking here and there where required.  For operations handling a high number of slow-moving items, or within operations where space is at a premium, a VNA concept can prove to be a very effective method of condensing your footprint for a large subset of your items.

In fact, a warehouse productivity study that we did recently with the Food Industry Association, revealed that while VNA provided 21% less productivity, the average operator using it was able to ship 57% more volume in 2/3 of the space.

 2017 – 2018 FMI/ROFDA Warehouse Productivity Benchmarking Study

For these operators, cap-ex avoidance more than offsets productivity losses. 

Although that was not an exhaustive list by any stretch of the imagination, those are some concepts that we’ve seen work very effectively when it comes to leveraging velocity-based slotting.

In closing, if there’s one thing you remember and apply from this article, please remember this.  Without a system or process in place to help you manage these concepts year-round, whether it’s keeping tabs on your fast-moving items, or identifying your slow-moving candidates, you run the risk of these concepts having an opposite effect than initially intended.

Find out how a fulfillment optimization system can help you build, maintain, and get the most out of your velocity-based slotting concept year-round. 

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