Why your material handling system may not be performing as expected

Integrated order fulfillment systems are the result of careful planning and countless hours of analysis and design. A major step in this process is understanding your universe of SKUs in terms of the frequency of hits and the associated cubic velocity. How often an item is picked and replenished is a key factor influencing the performance of your overall system.

During the design of a system, significant effort is put into capturing the data required to conduct a full analysis and develop the best possible solution. Information is gathered in a variety of areas, including order and item activity profiles, forecasted expectations, material flow volumes by operation, personnel by work area, and labor statistics.

Once a thorough analysis has been completed, a system layout is developed within the constraints of the available real estate. SKU assignment (slotting) is a natural part of this all-encompassing process, but the major challenge is the regular application of its principles in day-to-day operations. I like to refer to this as product life cycle slotting.

Many variables determine where a given SKU should be slotted within a system. From the pickers’ point of view, the goal is to move as little as possible while making the greatest number of picks. From a systems and replenishment point of view, you want to assign each SKU to the technology that best suits its activity and cubic velocity.

Too often, though, systems do not receive the proper attention on a scheduled basis for SKU or item slotting maintenance. If a motor were not running properly, would you check it out and do the proper maintenance? Of course you would. If a bearing were squealing, would you replace it or regrease it? Absolutely. But if a SKU has increased its frequency of hits and its cubic velocity but is still being picked from the top shelf in a flow rack or a carousel, would you know to reslot it to a more appropriate location, where it could be picked more efficiently? Not necessarily. A lack of slotting maintenance could be killing your system.

A typical product life cycle slotting history may cover a broad range of picking technologies and placements. There may be the product launch, with full cases being picked from pallets or flow rack. It may eventually evolve to open-case picking from flow rack, carousels, or shelving. It may also involve seasonal characteristics that require the reslotting of a SKU on a periodic basis.

In all cases, a slotting exercise should include an A/B/C mover analysis within the bounds of the given technology or subsystem that the SKU is currently assigned. In other words, if a product is slotted in a flow rack pick-to-light area, the A movers will be assigned to the most ergonomically pleasant shelf levels or the “golden zone” for picking. The B movers will be more likely accommodated in the shelves below. And the C movers will be in the higher shelves.

What will happen if you neglect your slotting maintenance? Some of the most frequent pitfalls:

  • Greater replenishment to the forward pick location due to a mismatch of the velocity requirements of the SKU and the technology.
  • Slower picking and ergonomic discomfort because SKUs are not placed in the proper A, B, and C locations within a technology.
  • Low probability of multiple hits within a zone because SKUs are not placed within family groups.
  • Bottlenecks and inefficiencies due to unbalanced workloads across zones. By applying proper slotting techniques on a regular basis, you will reap the benefits, including higher picking productivity, more-efficient replenishment procedures, increased worker enjoyment and safety, and a greater continuing return on investment.

Greg Chaffee is vice president of systems sales for Lewiston, ME-based material handling solutions consultancy Diamond Phoenix.

Partner Content

Hincapie Sportswear Finds Omnichannel Success in the Cloud - Netsuite
For more and more companies, a cloud-based unified data solution is the way to make this happen. Custom cycling apparel maker Hincapie Sportswear has leveraged this capability to gain greater visibility into revenue streams, turning opportunities into sales more quickly while gaining overall operating efficiency. Download this ecommerce special report from Multichannel Merchant to more.
The Gift of Wow: Preparing your store for the holiday season - Netsuite
Being prepared for the holiday rush used to mean stocking shelves and making sure your associates were ready for the long hours. But the digital revolution has changed everything, most importantly, customer expectations. Retailers with a physical store presence should be asking themselves—what am I doing to wow the customer?
3 Critical Components to Achieving the Perfect Order - NetSuite
Explore the 3 critical components to delivering the perfect order.
Streamlining Unified Commerce Complexity - NetSuite
Explore how consolidating multiple systems through a cloud-based commerce platform provides a seamless experience for both you, and your customer.