SME Corner: Eliminating the Need for Slotting in Warehouse Management

July 31, 2024

This article is part of our SME Corner, offering insights from our subject matter experts to guide you on your warehouse automation journey.

Slotting, the strategic placement of inventory based on factors like size, weight, and SKU velocity, has long been a cornerstone of efficient warehouse management. Historically, emphasis has been placed on positioning fast-moving SKUs for quick access, while slower movers are placed less optimally. This approach aims to minimize retrieval time and streamline operations. However, in today’s fast-paced market, where customers expect rapid and reliable shipping for all items, not just a select few, this traditional slotting strategy can fall short.

Enter the Exotec Skypod system, a transformative approach to inventory management that eliminates the need for slotting altogether. Unlike other automated storage and retrieval systems (ASRS), the Skypod system does not strategically slot inventory based on SKU velocity. Instead, it stores inventory randomly, with each SKU located in several places throughout the system, whether full cases or pieces in bins. The system leverages goods-to-person robotics to retrieve any item from storage to picking stations within two minutes, regardless of its location and without the need for digging and shuffling bins.

But why randomly store inventory when you can store fast movers closest to picking stations? Let’s dive into it.

Removing Bottlenecks

Slotting inventory based on order velocity can be effective for businesses with low order volumes, a relatively small number of SKUs, or very consistent order profiles that are not subject to change (yeah, right!). However, even for businesses that fall into these categories, warehouse operations can still face bottlenecks when using slotting-based systems. These bottlenecks can arise from high levels of traffic within areas with fast movers or malfunctions that render areas storing these valuable fast movers inaccessible.

The Skypod system’s method of random storage ensures that all items can be accessed quickly and reliably, eliminating the bottlenecks that can occur from slotting items together.

Meeting Modern e-Commerce Demands

In the era of e-Commerce, where customer expectations for speed and efficiency are at an all-time high, businesses need to be agile with their entire inventory. Offering fast shipping for only fast-moving items is no longer sufficient. Customers expect the same level of service for all products, whether they are high-velocity or slow-moving.

Predicting which items will be your fast and slow movers down the line is incredibly challenging. Without a crystal ball, you can’t expect to accurately forecast future demand. Slow movers could become top sellers overnight with just one influencer tweet. Building a system that could fall out of sync with your business’ needs within just a few months is a risk you can’t afford.

The Skypod system’s high level of reactivity enables businesses to adapt effortlessly to changes in inventory velocity. As e-Commerce continues to evolve, this flexibility becomes increasingly important, allowing businesses to remain agile and responsive.

The Need for Agility

Traditional slotting systems often require a multi-system approach to meet modern demands. Fast movers are processed by one system, while slower movers are handled by another. This adds complexity and longer processing times as it necessitates the management of two separate systems with additional equipment consolidating them downstream. As the velocity of inventory changes over time, this approach becomes even more cumbersome and inefficient. How do you know which inventory to store in which system? How do you allocate resources to each system over time? How do you manage multiple areas during peak and non-peak seasons effectively?

The Skypod system solves these challenges by enabling businesses to handle complex order profiles all in one system for simplified operations.

Embracing the Future of Inventory Management

The Exotec Skypod system represents a paradigm shift in how we think about inventory management. By moving away from systems that utilize traditional slotting techniques, businesses can achieve greater efficiency, reduce complexity, and meet the demands of today’s fast-paced market.

Take a virtual tour of the Skypod system and discover firsthand how it can transform your operations.

Take a virtual tour of the Skypod system and see for yourself how it can transform your operations.

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