How Do I Utilize Slotting and Replenishment to Reduce Costs and Control Fulfillment?

Problem:

Just 20% of products produce 80% of your sales, while as much as 70% of a picker’s time is spent “traveling” between pick locations to fill an order.  Maintaining sufficient inventory in the pick slots is a challenging and dynamic process.

Solutions:

• Develop a velocity unit sales report, ranking SKU’s from high to low to determine the key SKU’s that should be properly located to take advantage of their sales volumes.  By setting up “Hot Pick” zones where the high velocity movement products are located (slotted) in the most advantageous position for picking, you minimize walk time required.  Further reduce picking times by positioning faster selling items at waist height to take advantage of ergonomics.

• Provide a variety of pick slot types and sizes to match the cubic velocity metric for each SKU.  Design a slot size and SKU assignment around a guideline that ensures enough space to store a minimum of one week’s average unit sales quantity, and continually review the effectiveness of slotting assignments by monitoring replenishment frequency of days on hand with the pick slot reports.

• Combine both a min–max replenishment concept and one that is demand driven to insure product will be available in the pick slot when needed, with the vast majority driven by the min-max concept.

• Single line orders are the fastest to pick; batch pick singles as much as possible.

Benefits:

• Reduce picking costs by reducing overall walking times per order.

• Minimize the time wasted when a picker finds insufficient inventory (or “ can not find” product) in the pick slot to fill his order.