slotting - tools and views on smart replenishment › mwpvl_international_-_slotting...optimizing...

Slotting - Tools and Views on Smart Replenishment

Track 5 Session 8

2 0 1 2 M A T E R I A L H A N D L I N G & L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M A T I C • W W W . M H L C . C O M

2

Jim Fenzel

- Roundy’s

- VP Distribution

Rod Gallaway

- Staples

- VP NA Delivery Distribution

Tony Phillips

- Celebrating Home

- EVP Operations

Bill Stark

- United Stationers

- VP Engineering

Dan Basmajian

- Optricity

- President

Marc Wulfraat

- MWPVL International

- President


Abstract

Optimizing the selection, replenishment, and

putaway locations of your stored inventory based

on demand and history sounds great on paper.

Why wouldn't you do it? This point-counterpoint

panel discussion debates the utility of

contemporary slotting/reslotting software vs. the

subjective wisdom of manual management.

Included will be a short overview of a typical

modern tool, a friendly discussion of the 2

approaches and some time for audience Q & A

and participation. It may not be conclusive but

will be fun to watch!

3


Slotting Optimization Defined

“Warehouse Slotting Optimization” is

arranging the items in the warehouse in the

optimal manner to meet an operation’s

slotting objectives subject to a specified set

of goals and constraints .

4


Slotting Tools

• “That’s the way we’ve always done it”

• Spreadsheet/Database

• Profiling Software

• Advanced Slotting Software

Advanced Slotting

Software

Profiling Software

Spreadsheet/Database

“That’s the way we’ve always done it.”

5


Slotting Tools

Advanced Slotting Software

Profiling Software

Spreadsheet/Database

“That’s the way we’ve

always done it.”

6


Slotting Optimization: Historical

7

Picking, putaway and replenishment

inefficiencies

Inadequate customer service picking accuracy

Inefficient warehouse space utilization

Picking and shipping volume throughput

constraints

Lack of pick locations

High variability of seasonal and promotional

item volumes


Slotting Optimization: Today

8

Proactive vs. reactive slotting for exceptions

- Seasonal items

- Periodic promotional items

- SKU proliferation

- Obsolete product

Capitalize on today’s technology

- Make use of forecast data

- Perfection only exists for a minute

Employee buy-in


Traditional Slotting Optimization Benefits

9

Slotting Optimization yields significant

potential benefits

- Minimizes travel, picking and replenishment costs

- Increases productivity

- Enhances service readiness

- Reduces operating and capital expenditure costs

- Improves pick line efficiency

- Reduces inventory damage

- Improves overall order quality

- Optimizes storage and retrieval


Advanced Slotting Optimization Benefits

10

Increase SKU capacity

Improve warehouse throughput capacity (lines

per hour)

Reduce employee picking injuries

Reduce employee safety, inventory storage and

facility risks

Reduce customer/retail receiving and stocking

labor costs


Warehouse Heat Map Approach

11

Many distribution centers are small to mid-tier facilities that stock a limited number of SKUs (e.g. <5,000)

These operations can benefit from slotting optimization but may lack the financial resources to purchase packaged slotting optimization software

These companies seek a more simple spreadsheet approach that can be applied every 3 – 6 months as a means to maintaining the ‘health’ of the operation

For this profile of operation, there is a technique available called “warehouse heat mapping”


Warehouse Heat Map Case Study

12

Full & Split Case Distribution Center (majority is full case)

3,300 SKUs

12 months of sales orders gathered

Item Master file with accurate cube data required

Microsoft Excel used as the tool to perform all analytics, reslotting, and simulation of travel & picking time for each order released to the floor

Reslot is run every 6 months as new product lines are released to maintain slotting optimization

Simple, easy to use, low cost approach allows less complex operations to maximize ergonomics and efficiency


90 0 85 0

41 0 39 1 - 100

26 0 79 100 - 200

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48 0 29 360 0 221 53 0 169 143 0 107 92 0 122 241 0 48 258 0 0 237 0 7 39 0 283 0 0 452 2 0 148 45 0 286 600 - 800

1051 0 55 147 0 237 31 0 143 116 0 54 189 0 70 326 0 152 255 0 2 350 0 225 33 0 48 0 0 56 1 0 29 75 0 201 Over 800

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37 0 16 39 0 172 190 0 466 253 0 272 242 0 17 131 0 178 215 0 0 69 0 4 152 0 122 34 0 65 4 0 47 97 0 399

73 0 96 180 0 77 46 0 451 212 0 116 162 0 81 633 0 24 441 0 3 854 0 4 126 0 38 139 0 111 15 0 52 249 0 123

31 0 43 154 0 301 15 0 126 265 0 41 114 0 163 252 0 240 5 0 35 860 0 177 188 0 215 124 0 152 4 0 30 87 0 4

72 0 0 1

621 0 0 130

487 0 0 88

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36 0 88 27 0 365 12 0 298 170 0 153 139 0 1728 406 0 92 336 0 417 187 0 671 49 0 0 16 0 337 52 0 305 182 0 130

123 0 8 9 0 161 31 0 28 111 0 387 303 0 75 185 0 254 647 0 705 666 0 523 296 0 110 207 0 986 83 0 136 240 0 49

182 0 163 831 0 107 80 0 35 384 0 576 344 0 6 150 0 213 291 0 317 437 0 478 256 0 165 11 0 178 769 0 348 181 0 232

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0 0 117 64 0 158 29 0 155 246 0 211 369 0 882 449 0 56 258 0 990 604 0 141 153 0 45 150 0 78 280 0 168 52 0 194

38 0 71 87 0 92 183 0 69 524 0 183 310 0 182 188 0 426 223 0 827 121 0 34 59 0 207 68 0 69 97 0 28 75 0 207

87 0 14 170 0 110 164 0 68 224 0 240 151 0 189 128 0 367 12 0 660 5 0 287 46 0 1251 254 0 434 268 0 372 210 0 38

0 0 19 78 0 82 70 0 275 346 0 171 178 0 219 305 0 193 156 0 181 213 0 163 74 0 50 448 0 74 488 0 289 290 0 156

0 0 51 105 0 213 177 0 92 192 0 126 223 0 54 37 0 194 1422 0 290 13 0 269 160 0 34 338 0 179 388 0 121 185 0 67

128 0 0 45 0 231 179 0 839 335 0 261 153 0 279 106 0 163 383 0 36 116 0 105 495 0 52 108 0 261 122 0 189 518 0 26

215 0 0 0 0 1 0 0 139 286 0 0 2 0 82 456 0 248 324 0 504 221 0 133 76 0 149 399 0 100 337 0 839 320 0 8

304 0 0 1 0 0 22 0 58 201 0 0 5 0 38 144 0 229 181 0 240 116 0 213 64 0 129 45 0 457 261 0 156 280 0 505

4487 0 0 0 0 0 0 0 202 165 0 8 1 0 0 0 0 0 0 0 402 8 0 127 21 0 765 534 0 71 55 0 122 144 0 6

0 0 0 0 0 0 21 0 266 134 0 1172 0 0 0 0 0 0 3 0 697 89 0 207 115 0 349 60 0 334 515 0 177 12 0 95

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

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0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

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0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

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A B D E F G HC J K L M

Offices

Warehouse Heat Map Example

13

• Warehouse map is easily

made in Excel

• Map shows 12 months of

order lines by pick slot for

3000 SKUs

• Darker shade means more

activity

• Combined with order history,

the heat map allows you to

focus on the SKUS that

cause the most travel time

Center Cross Aisle

Rear Cross Aisle

Receiving / Shipping Dock

Before Slotting Optimization


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1 0 74 0 0 0 139 0 97 84 0 53 144 0 70 299 0 152 258 0 19 52 0 161 32 0 48 0 0 56 115 0 28 69 0 123 Over 800

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0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

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0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

A B D E F G HC J K L M

Offices

Warehouse Heat Map Example

14

• Goal is to ensure all darker

shaded cells move towards the

front of the facility to minimize

travel into the back half of the

warehouse

• Heat map shows the heat after

re-slotting is performed

• Order simulation performed

proves a 11% picking

productivity gain as a direct

result of this reslot.

• For this company the direct

savings in labor cost amounted

to $120,000 per annum

Center Cross Aisle

Rear Cross Aisle

Receiving / Shipping Dock

After Slotting Optimization


15

Key Takeaways

Yes, your business is unique – but there is a

slotting/reslotting strategy for you

A manual (spreadsheet) approach may work

fine for you

As you grow – order quantity, order size, # of

SKU’s – you can invest in an advanced tool and

reap the benefits

Like any other new technology, requires buy-in

from DC staff to ensure success

15


16

Additional Resources

MWPVL International

- “The Art and Science of Warehouse Slotting

Optimization”

Optricity

- “Rethinking Your Reslotting Strategy”

- “Increase Performance in Your Slotting Universe”


Questions?

17


18

Additional Materials

18


Actual Slotting Software Results

• Pick labor hours reduced by 11%

• Replenishment labor hours reduced by 23%

• Replenishment labor dollars reduced by 13%

• Retail product grouping improved by 51%

• Reduced total pick path travel by 10%

• Separated caustics from edibles with separate pick

paths

• Picking labor dollars reduced by 3%

• Annual retail labor savings equivalent to 16 times

investment

19


Actual Slotting Software Results

• Reduced pick labor by 11% in each-pick area based on

full reslot using velocity sequencing and golden zoning

• Completed “what-if” scenario analysis to reveal partial

reslot (20% of moves) reduced labor by 9%

• Replenishment frequency improved by 300%

• All items slotted with pallet EOQ quantities

• 68% of SKU representing 98% of hit velocity slotted in

43% of travel path (without congestion)

• 23% improvement in travel distance by order - reduced

from 3500 feet to 2700 feet

20


Warehouse Heat Map Close-up

26

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 56 219 0 80 62 0 37 324 0 161 21 0 84 456 0 47 55 0

0 217 104 0 105 202 0 200 331 0 411 479 0 72 8 0 0 346 0

0 126 164 0 547 112 0 90 250 0 105 22 0 441 60 0 59 13 0

0 190 98 0 154 101 0 1733 210 0 91 338 0 385 91 0 340 47 0

0 26 78 0 396 250 0 77 130 0 254 648 0 1023 1 0 413 284 0

0 26 331 0 582 345 0 388 118 0 210 86 0 18 585 0 235 255 0

0 192 116 0 399 255 0 78 163 0 294 2 0 1421 276 0 0 48 0

0 77 182 0 392 180 0 87 146 0 384 65 0 91 586 0 79 182 0

0 138 384 0 93 27 0 535 62 0 223 545 0 0 1030 0 0 96 0

0 285 184 0 493 318 0 706 127 0 376 450 0 31 165 0 255 301 0

0 265 396 0 15 188 0 568 86 0 274 554 0 291 242 0 57 105 0

0 13 378 0 6 139 0 555 211 0 136 94 0 0 607 0 213 181 0

0 200 285 0 213 93 0 199 134 0 438 158 0 805 924 0 43 33 0

0 136 187 0 54 150 0 852 424 0 471 529 0 31 217 0 0 99 0

0 203 234 0 2323 364 0 958 252 0 269 16 0 223 86 0 59 245 0

0 150 224 0 180 36 0 458 34 0 286 457 0 1649 89 0 34 157 0

D E F G HC J

• Notice how each full case pick location has a number inside the cell.

• This is the number of order lines that were picked from each pick slot

over the past 12 months

• The higher the number of lines the darker the shade of the cell

• Similar maps for movement history in cases, cube, pallets can easily

be made

slotting - tools and views on smart replenishment › mwpvl_international_-_slotting...optimizing...

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