Slotting – Cubic Velocity Calculation

Cubic velocity calculation is used for storage equipment selection.  The formula consisting of the average quantity ordered, the product’s dimensions, the desired pick location, the number of days on hand, and the pick unit of measure (full case or piece).

Multiply the average quantity ordered by the product’s cubic dimension to calculate the cubic velocity per day.

Then, to define the equipment location size required, multiply the days-on-hand inventory target by the cubic velocity per day.

Based on the resulting cubic velocity needed to support the days on hand in the picking area, you can identify the equipment required. Equipment types include modular drawers, bin shelving, standard shelving, carton flow racks, decked racks, pallet racks, and pallet flow racks, floor stack, etc. Once you match the cubic velocity with the equipment type, you can organize the equipment within the layout in zones for efficient picking.

 

 

 

 

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Slotting Defined

 

In warehouses, distribution centers, or even stores the placement of each item can be a science, sometimes it’s an art, often it just is what it is.  Stuff goes wherever it will fit, entropy kicks in and randomness takes over.  Then before you know it there’s little rhyme or reason as to which items go where.

Product Slotting is defined as finding the optimal location of product in a warehouse or distribution center for the purpose of improving material handling efficiency. Sometimes called inventory slotting, profiling, or warehouse optimization slotting identifies the most efficient placement for each item. Product slotting depends on a variety of factors such as picking volume and frequency, receiving and put-away volume and frequency, package dimensions and weight, picked package size, storage package size, material handling equipment used, layout of the facility, labor rates, etc.

 

 

 

 

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Inventory Reduction, Now Selling 20 Ideas

  1. Cut the package size, customers may want less right now.
  2. Increase the package size, customers will take what they can get.
  3. Have a 2 for 1 sale.
  4. Bundle a slow mover with something else.
  5. Change the safety stock service level from 98% (or where ever you have it) to 95%.
  6. Reduce the number of A items.
  7. 2%10 net 60.
  8. Double up your cycle counting.
  9. Start and Inventory Reduction process if you don’t already have one, retool the one you do have.
  10. Encourage more vendor consignment stock.
  11. Add some technology and reduce transaction delays.
  12. Find closer suppliers.
  13. In-source some of your suppliers.
  14. Switch from make-to-stock to make-to-order, or finish-to-order.
  15. Move inventory and material control to your production people.
  16. Blow up the warehouse and move parts to point-of-use.
  17. Switch to 3rd party logistics.  Have a 3PL but don’t see the benefit, the fire them and get a new one.
  18. Create a logistics function; consolidate and leverage.
  19. Forward Cycle Count – count items needed in the near future, find the stock outs before they bite you.
  20. Pull a few Kanban out of circulation, wait and see what happens, pull out some more, if it gets ugly put one back.

 

 

 

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