Product Slotting is defined as the intelligent location of product in a warehouse or distribution center for the purpose of optimizing material handling efficiency.  Sometimes called inventory slotting, or inventory profiling, it identifies the most efficient placement for each item in a distribution center or warehouse.  Since each instance is unique, product slotting depends on a variety of factors. Benefits from good product slotting include:

• Picking Productivity – Travel time can often account for up to 60% of a picker’s daily activity. A good product slotting strategy can reduce travel time thereby reducing picking labor.
• Efficient Replenishment – By sizing the pick face locations based upon a standard unit of measure (case, pallet) for the product in question you can significantly reduce the labor required to replenish the location.
• Work Balancing – By balancing activity across multiple pick zones you reduce congestion in the zones, improve material flow and reduce the total response time for a given order or batch of orders.
• Load Building – To minimize product damage, heavy products are located at the beginning of the pick path ahead of crushable product. Product may also be located based on case size to facilitate pallet building.
• Accuracy – Similar products are separated to minimize the opportunity for picking errors.
• Ergonomics – High velocity products are placed in a “golden zone” to reduce bending and reaching activity. Heavy or oversized items are placed on lower levels in the pick zone or placed in a separate zone where material handling equipment can be utilized.
• Pre-Consolidation – By storing and picking product by family group you may be able reduce downstream sorting and consolidation activity. This is particularly important in a retail environment to facilitate efficient restocking at the stores.
• Space Utilization – With the right product in the right sized locations substantial cube can be freed up allowing for additional product placement or avoiding facility expansion or overflow.

On-going Product Slotting Maintenance is important.  Operations managers typically do a good job of slotting their warehouse initially.  Over time, however, customer demand changes, products come and go, and before too long labor costs are way up, order fulfillment rates are way down and response times are negatively impacting customer service and profitability.  It is important to continually re-slot the warehouse to keep it operating at maximum efficiency.  Some reslot their highest movers (typically also their most profitable products) on a daily or weekly basis.