How you choose to position and arrange your products can significantly impact the performance of your fulfillment operations. There are two broad categories of slotting, known as Static Slotting and Dynamic Slotting.
It is the optimal choice for warehouses with fixed product bin locations, ideal for a business that focuses on fewer SKUs with high turnover. ShipHero static slotting does not require SKU counts in designated bin locations.
Managing SKU Bin Locations
Each SKU can be given a primary bin location, as well as any number of overstock locations (you can define multiple overstock locations as a comma-separated list of locations, i.e., "location B, location C"). When pickers are fetching SKUs, they will be directed to the primary bin location. If this location is depleted, the picker will reference the overstock location(s) to locate the remaining SKUs.
ShipHero recommends businesses start with Static Slotting, especially when starting with a fulfillment operation. It is the most straightforward approach to organizing product locations, with the following advantages over Dynamic Slotting:
- SKU inventory is not tracked in its bin locations, requiring fewer steps when replenishing inventory or picking orders.
- SKU bin locations can be updated when needed without needing to track SKU counts in each location.
- Bin locations are references so that the overstock location can accommodate an instruction, i.e. "See Janet." It is typical in smaller operations that need that flexibility.
Dynamic slotting is often used for businesses that want to track SKU inventory counts in each bin location or add new bin locations as required. Typically, this business needs to accommodate variability in product turnover rates or add new bin locations with a known SKU count in each bin location. Some advantages of Dynamic Slotting over Static Slotting include:
- The ability to use lots and expirations
- The ability to designate bins as non-pickable so you can track faulty or broken items
- ShipHero will guide the picker to the location with enough stock instead of needing to check the main bin before being routed to the overstock bin.
- Users will have access to the Replenishment Report (app.shiphero.com > Reports > Replenishment), so they can restock bins.
Typical Dynamic Slotting Use Case
A primary bin near the packing area of a warehouse is designated with a chosen SKU with the highest turnover for a given period.
When this period ends, or that SKU has been depleted, the primary bin location can be replenished with the highest moving SKU for that given period. Meanwhile, the original SKU with lower turnover can be located in a bin location that's further away from the packing area.
Because SKU counts are tracked in each location, pickers will be routed to the primary, or alternately, the overflow locations depending required SKU count that needs to be picked and what SKU counts exist in the SKU bin locations.
How to Choose Slotting Type
Dynamic Slotting optimization is crucial for warehouses that are handling many SKUs with changing turnover rates. Typically, this is used to keep the highest-selling SKUs near the packing area to reduce the effort required to fetch and ship, with the flexibility to accommodate changing the SKUs as sales trends change. Most crucially, knowing the SKU inventory counts in each location. The advantages of Dynamic Slotting are:
- SKU bin locations can be added at any time, with a known SKU count.
- SKU inventory counts are tracked (put back and pick) for each bin location.
- While requiring additional effort to maintain inventory counts in given bin locations, this is often required for large numbers of SKUs that require more accurate tracking of availability in each designated bin location.