Slotting: the most neglected process in the warehouse
The situation
Slotting — assigning pick locations to items — is a blind spot in almost every warehouse. It is rarely well documented, it usually is not in a system, and in many companies it happens once a year at the change of season. Nobody notices the consequence directly, because nothing breaks: people just walk a little further than necessary every day.
At this retailer, one distribution centre turned out to perform remarkably well. There, the process manager and the inventory team lead did the slotting every Tuesday afternoon, with a target of more than 90% of items within their own family group — achieved in practice at 97%. The operations manager attributed a productivity gain of 5 cartons per hour, or 2.5% to it.
The bottleneck
That good practice could not be transferred. The process consisted of several reports merged in Excel, the results went by email to an employee who entered them into the system by hand, and on Friday the warehouse was checked to see whether things were really where they should be.
It worked because two people were good at it and enjoyed it. Precisely for that reason it could not be copied to the twenty other sites — and precisely for that reason there was no view of what each intervention actually delivered. What you do not measure, you do not do more often.
What we did
Measurement note
This is a model calculation on client data, not a realised result. The calculation was made by the client’s controller, on their own staffing budget per distribution centre and per period, for the next budget year. We supplied the assumptions and the substantiation; the calculation and the source data belong to the client.
The productivity gain used is 2.5%, exactly half of the 5% we considered realistic based on our observations. That halving is a deliberate safety margin set by the client.
The 2.5% is not plucked from thin air: the operations manager of the best-performing distribution centre attributes the same percentage to the manual slotting practice already in place there — measured as 5 cartons per hour. Our estimate of the upper end rests on the ratio that walking takes up 25 to 40% of an order picker’s time and that around 10% of that can be gained.
The amount is net: the extra hours needed to actually move pick locations have been deducted in the calculation. The potential stated applies to full roll-out across all sites; the lead time for that is an estimate.
Why we show this case
Because it is the most honest example of what happens in the first weeks of a programme. Nothing has been built yet and nothing has been saved yet. What exists is a factual picture that the finance side of the organisation itself stands behind — and that is exactly the point at which a board can decide whether something is worthwhile.
It also shows where we come from. The same methodology was built earlier for an international food retailer, where it was rolled out from one country to the distribution centres in three other countries, with picking productivity at standard from day one. And in the mechanisation of a European textile retail chain, the same calculation engine sat beneath the loading of the roll cages.
What a neglected process has in common in all these cases: it costs nothing to ignore, until someone calculates what it is worth.
Does this sound familiar?
