Slotting Optimization Reaches Maturity

by Lindsay Olla  |  September 30, 2020
slotting-optimization-mature-technology

The Supply Chain world is continuously evolving as each link of the chain develops and adapts to meet the needs of society. Best practices are often established only to be improved upon and refined over time. Technology is an essential component that is not only driven by new expectations and demand, but also serves as a driving force in the progression of the industry.

How do you keep up with the momentum and ensure you are on track, especially when innovative technologies are emerging at a rapid rate and existing technologies are consistently being improved upon?

One of the most significant tools available to help you navigate the technology landscape is Gartner’s Hype Cycle for Supply Chain Execution Technologies. The hype cycle serves as an in-depth guide to various technologies from their inception, to maturity and widespread adoption.

How do you know which technologies are proven to deliver results?

Noting many companies have different rates at which they accept and adopt new technology (e.g. some organizations are more aggressive and willing to take risk for potential return ahead of the curve, some organizations are willing to adopt once technology is becoming more mainstream accepting moderate risk, while other companies are more conservative and deliberately wait until the technology is generally accepted before adopting), as technologies move along the hype cycle, they are analyzed and tested by actual companies in the industry. The further a technology is along the hype cycle, the closer it is to acceptance and widespread adoption.

Technologies that have traveled across the hype cycle and have reached the point in which they have progressed to no longer being on the hype cycle have reached the point of general acceptance by the industry. Technologies in this phase of the product lifecycle are now referred to as Mature Technologies.

What is a Mature Technology?

A Mature Technology is a technology that has been in use for long enough that most of its initial faults and inherent problems have been removed or reduced by further development. In some contexts, it may also refer to technology that has not seen widespread use, but whose scientific background is well understood. It is a technology that has been proven and accepted by the industry to deliver results based on various use cases.

This is when widespread adoption of the technology occurs.

Of the technologies that have officially moved into the mature stage this year, slotting optimization is one that has immense potential to deliver value to the warehousing link of the Supply Chain.

Gartner states in the Hype Cycle for Supply Chain Execution Technologies report the following regarding slotting optimization:

"Slotting Optimization — This technology remains important and demand remains strong, but it is largely a mature technology and has moved off the Hype Cycle."

- Gartner, Hype Cycle for Supply Chain Execution Technologies, 2020, Dwight Klappich, 7 July 2020.

Noting the acceptance of slotting optimization in the Supply Chain and, specifically, within the warehouse space, if you haven’t adopted warehouse slotting optimization technology yet, now is the prime time to consider adoption.

What is slotting optimization?

Warehouse slotting optimization is arranging the items (SKUs) in the warehouse in the optimal manner to meet an operation’s slotting objectives subject to a specified set of goals and constraints.

warehouse-slotting-moves

What are the benefits of slotting optimization?

Slotting optimization:

  • Minimizes travel, picking and replenishment costs
  • Increases productivity
  • Enhances service readiness
  • Reduces operating and capital expenditure costs
  • Improves pick line efficiency
  • Reduces inventory damage
  • Improves overall order quality
  • Optimizes storage and retrieval
  • Produces optimal moves chains minimizing moves and cost
  • Reduces bend and reach for employees
technology-software-warehouse

What results do companies typically see when implementing a slotting optimization solution?

On average, results from a well-executed slotting optimization initiative delivers impressive results:

  • Increased Picking Productivity:
    • Due to reduced travel times – 10%
    • For break pack operations – 15%
  • Increased Replenishment Productivity:
    • Full case operations –  10%
    • Break pack operations – 12%
  • Reduced Damages – 40%

But, as most know, the majority of warehouse operations are not average, and results will depend on various factors, including whether or not any slotting initiatives have taken place within the warehouse, the team’s dedication to the initiative and what goals and objectives are targeted for the project.

What industries benefit most from slotting optimization?

Almost any industry you can think of has been able to achieve benefits from slotting optimization. Below are some examples of industries, each of which link to a case study example highlighting details around the results achieved:

Interested in learning more about slotting optimization?

Check out Optricity’s blog, Solving the Warehouse Slotting Puzzle, or contact Optricity for an introductory conversation.

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