Distribution operations today face greater performance pressure than ever before, driven by customer demands for better, faster service and lower prices. Operators must keep up with new business models, new channels, and new products, while offering more value-added services. All of this in an environment where capital for investment in improvements is difficult to get. You try to adapt and improve but it’s difficult to stay current with the thought-leading, global best practices needed to compete. Throughput and storage capacity often become critical issues, and performance starts to deteriorate.
Faced with these challenges, companies recognize the need to change and improve but are often unsure of how or where to begin. Improvement initiatives like slotting offer great promise, but companies often lack the time and resources to implement slotting programs because ongoing firefighting takes priority. Additionally, the lack of slotting tools availability and expertise can hinder progress. Finally, sustaining improvements even while demand profiles and operational capabilities are changing can compromise the ongoing effectiveness of slotting performance improvements.
What is the Solution?
Slotting is putting the right SKUs in the right location at the right time in order to maximize space, utilization, throughput and productivity. However, solving this challenge means quickly assessing the facility’s true utilization and determining the right solution based on the business needs and trends. Specialized analytic and modeling software can accelerate the process, but there’s no substitute for experts who can interpret the data, understand the impact and minimize risks. Deep operations management expertise and sustainability is key – someone who understands that solutions must be pragmatic, implementable, and sustainable.
Success requires a deep dive into the data to understand the business profile, facility capacity and its overall impact on productivity. A detailed plan to assign SKUs to physical locations and media types within the facility is also required. Execution of the relocation plan must safeguard against causing inventory accuracy issues or operational disruptions. Lastly, but most importantly, is monitoring utilization and product lifecycles to ensure sustainability. The proposed solution may also require system changes or bolt-on software to maintain the slotting program.
Fortna Can Help
Fortna brings our deep and extensive operations and analytic expertise to lead slotting projects that can help you improve and sustain productivity, throughput and utilization performance in your operation.
Analyze data and review current state to understand gaps in the current slotting methodology so you can maximize facility utilization with minimal capital investment
Identify operational requirements like assessing cube utilization vs. location utilization; capturing case sizes for media requirements; compiling racking and media type requirements based on current availability and product dimensions
Develop optimal slotting configuration based on data analysis, product velocities, and product dimensions to correctly allocate SKUs to available media, and ultimately increase picker and replenishment productivities
Execute the plan in order to physically move the product to new locations without impacting inventory accuracy and ongoing operations
Develop sustainability plan based on product lifecycles, seasonality, promotions, obsolete SKUs, etc.
Not enough time or expertise for structured slotting methodology
Insufficient resources to maintain an ongoing slotting program
Overall “good” storage density masks poor location cube utilization
Slotting tools are unavailable or unfamiliar
Transitioning to a new facility requires re-slotting for newly installed media