Know Your ABCs

Paying attention to the fastest selling items to make sure they are located in the most advantageous picking position will generate significant labor cost savings. If available space is a concern, slotting will also help improve storage utilization by focusing on the slowest movers to see if their assigned bin space can be reduced.

Slotting uses ABC profiling, 80/20 analysis, and cube movement data to keep high moving product in the Golden or Strike zones. Next we provide a simple example of how to reduce pick tour travel distance by 29% using a horizontal slotting strategy.

Benefits of a slotting exercise include:

• Improved picker productivity,
• Better pick accuracy,
• More efficient replenishments,
• Ability to better manage the work load across the facility
• and improved Ergonomics and safety

Here is an example of a product velocity slotted warehouse. Slotting attempts to keep fast moving, or “A” items closer to the point of use with slower moving items (“B” and “C”) further away. In this warehouse, A items would be slotted or stored closer to shipping and in easily accessible bins, B items further away and C items the furthest away.

The Ideal Shape of a Warehouse

Q: With the ABC slotting design theory in mind, what is the best shape of a warehouse?

A: To keep all product equally distributed around the shipping dock, the warehouse would be a circle with shipping in the center and product slotted in a bulls eye.

Of course, the under-ground tunnels required to get trucks to the shipping dock might be cost prohibitive.

66% Improvement

A key benefit of ABC slotting reduced average travel distance (and time) per pick. Figure 1 shows a 1,000 feet long warehouse with shipping/receiving on the left side. Without a slotting strategy product is randomly stored throughout the facility and the average pick travel distance is 1,000 ft; 500 feet in and 500 feet out occurring 100% of the time.

With slotting, Figure 2, the A items are 20% of the SKUs, generating 80% of the activity and consuming 20% of the space. Distance factor for A item picks is 160 ft; 100 ft in, 100 ft out, occurring 80% of the time.

B items, the next 30% of the SKUs, will drive 15% of the activity and consume 30% of the space. Distance factor for B item picks is 105 ft; 350 ft in, 350 ft out, occurring 15% of the time.

And C items, or the remaining 50% of the SKUs, will drive 5% of the activity and consume 50% of the space.  Distance factor for C items picks is 75 ft; 750 ft in, 750 ft out, occurring 5% of the time.

In total the average travel distance to pick with a slotting strategy layout is 340 ft, 160 + 105 + 75, for a savings of 660 (1000 – 340) feet per pick, or 66%.

The same principles can should be applied to vertical slotting. You may have heard of the golden or strike zone. This is the area the rack and shelving that is most easily accessible without having to bend or reach. These extra motions take more time and result if a more fatigued workforce.