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Retire the Woes of Spreadsheet Slotting

by Chuck Grissom

Recent surveys performed by Adelante SCM show that between 67-78% of companies use spreadsheets to manage aspects of their supply chain.

As e-Commerce, SKU proliferation and demand volatility persist across the supply chain, distribution operations are experiencing a steady increase in complexity, quickly outgrowing inventory tracked by spreadsheets. While spreadsheets can be a practical tool, as operations become more dynamic and nuanced, functions requiring multifaceted solutions may require highly optimized technology to be effective.

 

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When Do Spreadsheets Work?

Slotting with a spreadsheet can serve as a starting point for companies beginning to explore a slotting strategy or for warehouse operations that handle a relatively small number of SKUs (e.g., SKU counts < 500) without a high product turnover rate. In these more simplistic environments, a spreadsheet can drive some improvement for one or two targeted objectives.

When is Spreadsheet Slotting Not Enough?

An increase in SKU count increases operational complexity. For example, consider a warehouse with 5,000 SKUs and approximately 7,000 available locations. The first item to slot pairing has 5,000 possibilities, then the second item to slot pairing has 4,999 choices; the full potential item to slot assignments reach an incredible 4.2285779266 × 1016325. Eliminating unworkable pairings can be complex, and then designating the best location for each item becomes exceedingly challenging because each choice affects other potential choices. Add competing goals, rules, constraints and storage media varieties into the mix and using a spreadsheet becomes nearly intractable.

Challenges with Using Spreadsheets

  • Limited ability for handling multiple objectives (spreadsheets are typically restricted to one or two)
  • Difficulty in managing trade-offs (e.g., profiling items to best locations for proper space allocation versus placing an item into the pick area to support sequencing goals for stable pallet building)
  • No platform to test alternative scenarios
  • Manual updates result in no real-time data
  • No workplan or optimal moves list to progress to the targeted optimized state

Real World Comparison

Metcash, a leading wholesale distributor in the grocery, liquor and hardware industries, delivers thousands of products to over 10,000 retail customers and 90,000 wholesale customers. The National Logistics Process Lead for Metcash shared their experience of using both spreadsheets and slotting optimization software, FORTNA OptiSlot DC™.

“After 27 years working in the warehouse and supply chain industry, I have executed many warehouse slotting relays where the only tool at my disposal was an Excel spreadsheet. Using the OptiSlot software has changed my world. I am able to incorporate my experience of what works and what I want to achieve by setting the rules and constraints around the product and location data. After that is done, what would take many days of painstaking work in Excel, happens in a matter of seconds!”

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Building the Case to Invest in a Slotting Optimization Solution

For slotting optimization software to be most effective, one or more of the following should exist: the warehouse stores more than 1,000 SKUs, product turns rapidly, operational goals conflict with necessary constraints requiring strategic trade-offs, or unique circumstances and intricacies are at play. Examples include:

  • Items requiring different temperature zones
  • Secure placement of hazardous materials
  • Fragile or heavy items requiring special placement
  • Items that cannot be within a certain distance of others
  • Retail-friendly pallet building
  • Balancing picking labor against replenishment labor
  • Grouping of items along the pick path (e.g., by vendor or family)
  • Keeping items that are often on same orders near each other
  • Balancing workload among zones

Companies embarking on their digital transformation need a solution that can create an immediate and measurable benefit. Slotting optimization software, a tested and mature solution, delivers benefits within months, ROI within a year, and serves as an effective and relatively low cost of entry into automation. The evolving distribution ecosystem will continue to increase in complexity, now is the time to retire the spreadsheets and adopt technology to remain competitive. Save time, improve productivity, reduce costs, maximize space utilization and boost customer satisfaction with a holistic slotting strategy powered by slotting optimization software.

FORTNA Can Help

As warehousing operations increase in complexity, it is important to consider the impact and continued benefit of deploying a sustainable slotting strategy. FORTNA OptiSlot DC™ offers the ability to balance goals and objectives to improve your operations and secure results with rapid ROI.

Contact an expert today and learn if you are ready to implement slotting optimization software.

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About the Author

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Chuck Grissom

Chief Technology Officer, FORTNA Optricity

Chuck Grissom is the software architect of intelligent FORTNA OptiSlot DC™ software. His PhD in advanced mathematics, decades of warehousing domain experience and innovative approach to software engineering help guide the FORTNA software development team to further advance the science of warehousing analysis, design and optimization solutions.