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Warehouse Automation Projects: Don't cut corners with slotting!

By Ian Hobkirk | 11/12/2019 | 6:05 AM

Most companies that have attempted to implement automated materials handling equipment have discovered that these projects can be particularly vulnerable to Murphy’s Law, the principal that, “anything that can go wrong, will go wrong.” This blog is twelfth in an ongoing series on “Beating Murphy’s Law in Warehouse Automation Projects.”

Blog 12 DCA key design area that can cause problems with material handling system implementations is that of bin slotting: determining the optimal location for each SKU in the system. There are two basic approaches which can be taken to bin slotting: (a) using spreadsheet-based tools, and (b) using commercially developed, specialized slotting software. Each approach can be effective in certain situations.

Spreadsheet tools can often be used to perform very accurate bin sizing. This step is crucial as the final storage mediums are designed, and shelf spacing is set during implementation. Improper bin sizing can result in bins which are too large (creating wasted space and excessive travel), or too small (creating product overflows and excessive replenishment labor). Incorrect bin sizing is usually caused by either (a) faulty master data, or (b) shortcomings in the calculation methodology. Errors in master data can often be caught by having individuals who are knowledgeable of the business review the data, investigate outlying data points with a critical eye, and look for results which do not intuitively seem right. Conversely, errors in calculation methodology can often be remedied by having individuals experienced in slotting processes create the slotting tool using proven methods.

Many companies have found it beneficial to utilize a commercial slotting software system. Commercial slotting tools surpass the capabilities of spreadsheets in a number of ways:

  • Pre-coded calculations and rules that have been battle-tested in numerous applications
  • Ability to perform more complex slotting using multiple criteria, including:
    • Sales velocity
    • SKU affinity
    • Family groupings
    • Segregation rules
    • Ability to interface directly with a WMS system to trigger product moves and manage directed put-away

While commercial slotting tools are not inexpensive, they can often prove to be a wise investment. In the chaos of a system implementation, it can be difficult to rapidly correct slotting mistakes on the fly; far better to avoid making them to begin with by investing in a rigorous slotting program from day one.
To read Commonwealth’s complete white-paper titled, Beating Murphy’s Law in Warehouse Automation Projectsclick here.




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About Ian Hobkirk

Ian Hobkirk

Ian Hobkirk is the founder and Managing Director of Commonwealth Supply Chain Advisors. Over his 20-year career, he has helped hundreds of companies reduce their distribution labor costs, improve space utilization, and meet their customer service objectives. He has formed supply chain consulting organizations for two different systems integration firms, and managed the supply chain execution practice at The AberdeenGroup, a leading technology analyst firm.


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