TL;DR:
Warehouse slotting essentials
Warehouse slotting is an inventory management strategy that organizes products for optimal picking efficiency.
Common strategies include slotting by sales volume, product weight/type, and seasonal considerations.
Effective slotting reduces fulfillment time, minimizes picking errors, and improves overall warehouse efficiency.
The right slotting strategy translates to happier customers through faster, more accurate order fulfillment.
Warehouse slotting is an inventory management tool that can increase the efficiency of your operations. Before you dive into slotting, it’s important to collect data on your past sales. You should also understand the storage and handling needs of fragile and heavy items. This will allow you to optimize storage and better organize your inventory.
What is slotting in a warehouse?
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Slotting is the process of organizing your warehouse for optimal product picking. It is a form of inventory management.
Warehouse slotting often involves analyzing the available storage and the items to be slotted. The next consideration for your slotting strategy is the optimal placement of different products. There are various methods for warehouse slotting.
NOTE: Slotting can also refer to the placement of products in brick-and-mortar retail. Retailers sometimes charge manufacturers slotting fees for prime shelf placement in stores. Third-party logistics companies don’t charge slotting fees for shelf placements in a warehouse or distribution center.
How to develop a winning slotting strategy for your warehouse or distribution center
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There are many approaches to organizing your warehouse space. The best slotting strategy for your eCommerce business depends on the number of products you sell, the types of items in your product line, and whether you sell mostly individual items or larger quantities.
Here are some of the most common approaches to warehouse slotting. You may combine multiple strategies to optimize your space and speed up your order picking.
Slotting by sales volume
One of the most common warehouse management optimization strategies is to place the products with the highest turnover in the slots closest to the packing station. This reduces travel time for workers as they pick the most popular items. Products with slower turnover get slots in less accessible warehouse zones.
PRO TIP: In a busy warehouse, concentrating too many workers in the same area can lead to bottlenecks. Consider using a hybrid approach or zone or wave picking to improve picking efficiency.
Full pallet, case, and item picking
The quantities in a typical order will affect your warehouse slotting strategy. You typically wouldn’t store items that sell by the full pallet in the same warehouse space as individual products that need a small amount of shelf space.
For example, imagine a company that sells cleaning supplies. Janitorial companies might order a case or even a full pallet of cleaning solution. If the company has a retail sales arm as well as janitorial supply, it might sell one or two jugs of cleaning solution to a retail customer. The warehouse slotting strategy for this company would reflect these different types of sales. If most of their sales are by the case, the shelves nearest the packing and shipping area would be designed to hold full cases.
Product weight and type considerations
Heavy items should be placed on or near ground level, allowing workers to easily load boxes onto picking carts built for heavy loads. Fragile items should be stored where they can be handled carefully during picking and are less likely to be damaged as other products are moved around.
Seasonal changes in warehouse organization
Moving items from one warehouse space to another can be time-consuming, but it can be worth it if you have significant differences in seasonal volume of certain items. This applies not only to obvious seasonal products like holiday decorations but also to more subtle shifts in product popularity throughout the year.
For instance, a company that sells utility tools might give their prime warehouse space to the models that are most popular with their loyal customers. These fall in the middle of the company’s price range, designed for practicality rather than flashiness.
During the holiday season, however, the top-of-the-line toolset becomes a best seller. For gift season, the high-end toolsets make exciting gifts for the builders and fixers in people’s lives. If this change in relative sales volume is significant enough, it makes sense to move these items closer to the packing station. The set comes with a custom engraved case, so you need to balance ease of picking with proximity to a kitting station.
PRO TIP: The process of organizing items for warehouse slotting isn’t always intuitive. Unlike organizing your kitchen cabinets or closet where you group similar items together, warehouse slotting often separates similar items to reduce picking errors (like separating different sizes of the same shirt to prevent mix-ups).
Chaotic vs. fixed slotting
- Fixed slotting: Each product is assigned a specific space. During inventory replenishment, you replace each SKU in its designated slot on the shelf.
- Chaotic slotting: Items don’t have set slots. When an item comes in, you assign it to the most appropriate space available. This requires warehouse management software to track inventory locations.
Why warehouse slotting is essential for eCommerce companies
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Optimizing your inventory storage is more central to your company’s profitability than you may realize. It’s essential to understand the value of warehouse slotting for eCommerce. That will help you give slotting the time and attention it deserves.
Here are just a few of the benefits of developing a practical slotting strategy.
Faster fulfillment
Carefully planned warehouse slotting reduces travel time for the workers picking the orders. Slotting can help you place the highest-volume products on shelves that are easiest for employees to reach. This warehouse organization can give a boost to your fulfillment operations.
When you optimize your warehouse space, you increase the number of orders a worker can pick in a day. Warehouse slotting can help you prevent fulfillment backlogs without the need to bring in temporary staff. Savings on staff is just one of the ways that a well-organized warehouse can reduce your fulfillment costs.
Fewer errors
When you slot inventory according to your warehouse management plan, you set your staff up for success. By taking steps such as separating the different sizes of red polo shirts, you make it easy for pickers to identify the correct SKUs for each order quickly.
Also, storing heavy and fragile items in appropriate slots can reduce damage. Appropriate storage saves money by reducing inventory shrinkage.
Better use of warehouse space
Warehouse slotting helps maximize your storage capacity by using your warehouse space to its fullest. With a well-organized warehouse layout, you have the potential to rent a smaller warehouse. This is yet another way that slotting can reduce your overhead.
Improved employee productivity
Organizing your warehouse helps employees have clear paths for efficient order picking. A good slotting strategy and well-organized pick list allows workers to find and pick the correct SKU quickly. They don’t have to waste time returning a product to the shelf. Workers don’t have to maneuver carts around each other during the picking process.
NOTE: Warehouse slotting is only one element of a comprehensive inventory management strategy.
Using warehouse slotting to improve customer happiness
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At the end of the day, the goal of your eCommerce company is more happy customers. Happy (and loyal) customers are like money in the bank for your eCommerce business.
Anything that improves the customer experience will help boost your business. Your customer won’t ever know about your fabulous warehouse slotting system. But they will be delighted when their order arrives quickly and correctly picked and packed. All in a day’s work for your warehouse slotting strategy.
Key takeaway
Effective warehouse slotting is a hidden but critical component of your eCommerce success. While customers never see your warehouse organization, they directly experience its benefits through faster shipping, fewer errors, and better overall service.
Investing time in thoughtful slotting strategies pays dividends in customer satisfaction and operational efficiency.
Frequently asked questions
What data should I collect before implementing a warehouse slotting strategy?
Before implementing warehouse slotting, collect historical sales data to identify your fastest-moving products, analyze product dimensions and weights, understand fragility requirements, track seasonal trends, and evaluate your current warehouse layout and constraints.
How often should warehouse slotting be re-evaluated?
Warehouse slotting should be reviewed quarterly at minimum, with more frequent adjustments during seasonal peaks.
Your inventory strategy should be reassessed whenever there are significant changes in your product line, order patterns, or after introducing new SKUs. Many successful eCommerce businesses conduct minor slotting adjustments monthly and major reorganizations annually.
How can I measure the success of my warehouse slotting strategy?
Track key performance indicators including order picking time, fulfillment accuracy rates, employee productivity metrics, and warehouse space utilization. Compare before-and-after data for these metrics to quantify improvements.
You should also monitor customer satisfaction metrics like shipping times and order accuracy, as these directly reflect the effectiveness of your slotting strategy.
