All About Slotting
Organizing Your Warehouse
How you choose to position and arrange your products can have a big impact on the performance of your fulfillment operations. There are two broad categories of slotting, known as Static Slotting and Dynamic Slotting.
This is the optimal choice for warehouses with fixed product bin locations, ideal for a business that focuses on fewer SKUs with high turnover. ShipHero static slotting does not require SKU counts in designated bin locations.
Managing SKU Bin Locations
Each SKU can be given a primary bin location, as well as any number of overstock locations (you can define multiple overstock locations as a comma separated list of locations, i.e. "locationB, locationC"). When pickers are fetching SKUs, they will be directed to the primary bin location. If this location is depleted, the picker will then reference the overstock location(s) to locate the remaining SKUs.
ShipHero recommends businesses start off with Static Slotting especially when starting out with a fulfillment operation. This is the easiest approach to organizing product locations, with the following advantages over Dynamic Slotting:
- SKU inventory is not tracked in its bin locations, requiring fewer steps when replenishing inventory or picking orders.
- SKU bin locations can be updated when needed without needing to track SKU counts in each location.
- Cycle Counting is currently only available for Static Slotting.
- Bin locations are references, so the overstock location can accommodate an instruction .i.e. "See Janet". This is typical in smaller operations that need that flexibility.
For businesses that want to track SKU inventory counts in each bin location or add new bin locations as required, dynamic slotting is often used. Typically, this is a business that needs to accommodate variability in product turnover rates or add new bin locations with a known SKU count in each bin location.
Typical Dynamic Slotting Use Case
A primary bin location near the packing area of a warehouse is designated with a chosen SKU that have the highest turnover for a given time period.
When this time period ends, or that SKU has been depleted, the primary bin location can be replenished with the highest moving SKU for that given time period. Meanwhile, the original SKU that has lower turnover, can be located in bin location that's further away from the packing area.
Because SKU counts are tracking in each location, pickers will be routed to the primary, or alternately, the overflow locations depending required SKU count that needs to be picked and what SKU counts exist in the SKU bin locations.
Choosing Dynamic Slotting over Static Slotting
This optimization is crucial for warehouses that are handling many SKUs with changing turnover rates. Typically, this is used to keep the highest selling SKUs near the packing area to reduce the effort required to fetch and ship, with the flexibility to accommodate changing the SKUs as sales trends change, and most crucially, knowing the SKU inventory counts in each location. The advantages of Dynamic Slotting are:
- SKU bin locations can be added at any time, with a known SKU count.
- SKU inventory counts are tracked (put back and pick) for each bin location.
- While requiring additional effort to maintain inventory counts in given bin locations, this is often required for large numbers of SKUs that require more accurate tracking of availability in each designated bin location.