Warehouse Slotting for Storage Optimization: How does it work?

What warehouse slotting is and how to use it to improve your inventory strategy. Want faster picking speeds and lower costs? Read on!

Increasing the level of organization in your warehouse or distribution center helps you find things faster and with fewer mistakes. As your e-commerce business grows, you might start to focus on just filling up empty spaces without much concern about how you store materials. If you want to improve your warehouse operations and reduce inventory carrying costs, you can take advantage of warehouse slotting.

warehouse slotting

Table of Contents

Many e-commerce businesses use slotting to make it easier to find things in the warehouse, use space better, and reduce costs related to inventory and warehousing. But what is slotting and how do you implement it? In this article, we examine these questions, some basic slotting strategies, and more reasons why it’s beneficial for your business.

What is warehouse slotting?

Warehouse slotting is the process of placing items into locations based on factors such as size, weight, and frequency of use. This organized method not only makes it easier to locate products when necessary but also maximizes available space for optimal efficiency.

For example, a clothing brand e-commerce store may sell one SKU 100 times more than others in their product line. In this circumstance, it makes sense for that item to live closer to the packing area than others. This may be true even if this SKU ends up in a zone that doesn’t match other types of items in that area. By placing this high-running SKU closer, the total amount of travel is greatly reduced for warehouse workers.

Although it may take some initial time and critical thinking to implement, slotting saves time and money. It also prevents mistakes and improves workplace safety by reducing how often employees need to reach or climb high shelves. If you manage a warehouse, read on to learn more about how slotting can help your business work better.

5 Benefits of Warehouse Slotting

There are lots of benefits to warehouse slotting. In this article, we have listed 5 for you to consider. Of course, many other benefits stem from having improvements in these areas, but this should get you started.

Improved Productivity

Slotting helps optimize the warehouse workflow by placing items in locations based on size, weight, and frequency of use. This makes it easier to find things quickly, which leads to improved worker productivity.

Increased Space Utilization

By organizing items into categories and assigning them specific locations within a warehouse, you can make better use of your available space than if you were storing things with no real methodology.

Reduced Inventory Costs

Thanks to the increased space utilization, slotting helps reduce inventory costs by allowing you to store more products in less space. Additionally, it can reduce the time needed to locate them when necessary.

Greater Accuracy & Safety

The organized arrangement provided by slotting allows workers to find what they need faster with fewer mistakes or accidents. These things occur when workers try to reach high shelves or ladder racks without adequate training or safety precautions.

Enhanced Customer Service Levels

With an optimized warehouse system from slotting, businesses can respond faster and more accurately when fulfilling orders for customers, resulting in higher levels of customer satisfaction overall.

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3 Main Slotting Strategies

There are 3 main strategies for warehouse slotting. These are pretty straightforward, but there are many other ways you can create a warehouse slotting strategy for your business. It all depends on your specific business needs and how you can optimize for those. Here are the 3 main slotting strategies:

Size & Weight

One of the most effective warehouse slotting strategies is to categorize items according to size and weight. This helps optimize storage and retrieval as well as improve efficiency when it comes to locating items. It also reduces the risk of damages or accidents due to improper placement of heavy or large items at heights beyond a worker’s reach.

SKU Velocity

Another slotting strategy is to place frequently accessed items near the packing zone or shipping area. This reduces the amount of time it takes to retrieve an item, as well as limits errors when fulfilling orders quickly. It also helps maximize efficiency by ensuring that workers only have to travel minimal distances when locating items in the warehouse.

Organizing Inventory Logically

Finally, a good slotting strategy is to arrange items logically. A good example of this is the clothing industry. Since most clothing SKUs come in sizes small, medium, and large, you can place these next to each other in order from small to large. Then, apply this methodology throughout the entire warehouse.

This helps workers find the items faster since they can easily scan the racks for items that are placed near each other. It also helps with inventory control by making it easier to identify any discrepancies or issues quickly, such as missing items or incorrect stock levels.

warehouse slotting in a fulfillment center to improve the use of the storage space

How can I implement warehouse slotting? 4 Steps

Warehouse slotting implementation can be difficult because of the complex nature of the warehouse environment, which involves several factors such as reachability and product size. Additionally, determining the best placement for inventory items to maximize efficiency while abiding by safety guidelines can also be challenging. Furthermore, any changes or updates to existing systems must also be carefully monitored and communicated so you don’t actually introduce less efficiency. Here are some steps to help with the implementation:

Step 1: Review Your Current Storage System

Take an inventory and assess your existing storage system, noting the size and weight of items along with how frequently they’re used. This will help you determine where and how you should be slotting items.

Step 2: Analyze Your Space & Create a Layout

Once you have an understanding of the way inventory is accessed in your space, create a layout that accounts for these metrics. You need to ensure that there is a clear flow and logic to how your racks, bins, or other storage areas are positioned.

Step 3: Assign Appropriate Locations to Items

Once you have your layout, start assigning locations to each item and ensure that they are clearly labeled. Place heavier items in areas closer to the ground or waist level and frequently accessed inventory close to the packing zone.

Step 4: Train Employees & Regularly Monitor Your System

Train your employees on the new system and create a process for regularly monitoring it so you can make any necessary adjustments as needed.

How to Improve Your Slotting Process

One of the best ways to improve your warehouse slotting process is to utilize technology and automation. By using automated systems such as RFID tags, barcode scanners, and voice-directed warehousing, you can reduce manual labor costs while improving accuracy and efficiency. Automation also allows you to track item movement more accurately in real-time, which can help you pinpoint any areas that may need improvement.

Listen To Your Team Members

Pickers are important to any plan to improve the warehouse because they know what works and what does not work. While data sets and prediction models are great, nothing beats the on-the-ground experience of the team members doing the work. Listen to them!

Use a Warehouse Management System

We have discussed the benefits of a warehouse management system (WMS) in many of the articles on our website. It’s a vital tool that nearly all warehouses and fulfillment centers need. Because of it’s digital inventory management capabilities, a WMS can greatly improve your slotting strategy by collecting data and analyzing slow moving items, warehouse organization, order fulfillment and item velocity. It takes this data and recommends where to store inventory to best capitalize on storage capacity and improve the picking process.


Additionally, regularly analyze the data from your slotting system to identify any potential problems. This will enable you to make proactive changes if necessary and can help ensure the success of your slotting system over time. But what metrics should you measure? Here are some suggestions:

warehouse slotting in use in a large warehouse picking process

How can I measure the success of my warehouse slotting strategy?

Measuring the success of a warehouse slotting system is key to understanding how effective it has been and whether any changes need to be made. Here are some ways you can measure your slotting system:

Monitor Pick Times

By measuring the time it takes to pick an item from the warehouse, you can determine how effective your slotting system has been.

Track Inventory Costs

Tracking inventory costs can provide insight into how much money is being saved due to the optimized storage arrangements created by your slotting system.

Monitor Order Accuracy Rates

By tracking order accuracy rates, you can get a better understanding of whether items are being picked correctly or not.

Track Capacity Utilization Rates

Measuring capacity utilization rates will give you an idea of how well your warehouse is utilizing the space it has available for storing products.

Free Warehouse Planning Tools

Warehouse Capacity Calculator

Need help figuring out the total volume of usable space in your warehouse? We built a simple tool to help you calculate that.

Pallet Storage Capacity Calculator

The pallet storage capacity calculator quickly determines the total number of pallets your warehouse can store based on rack configuration.

Conclusion About Slotting

Implementing an effective slotting system is helpful for nearly any warehouse operation. It helps maximize efficiency, reduce costs, and optimize the usability of your warehouse space. By taking the time to carefully plan, implement, and analyze, you can create a slotting system that helps you simultaneously scale your operations and save costs.

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