ABC slotting: fast movers closer

In many warehouses goods are put "wherever there is free space". As a result the fastest-selling item sits in the far corner while something that ships once a year takes up room by the exit. ABC slotting fixes this: goods are divided into zones by speed of movement, and the faster a product turns, the closer it sits to the picker.

What ABC analysis is

The analysis is based on the Pareto principle: a small number of items account for most of the movement. Typically group A makes up 10 to 20 percent of items but gives 70 to 80 percent of outbound volume. Group B is the middle, and group C is more than half of the items but only 5 to 10 percent of the volume. The exact ratio differs in every warehouse, so calculate it from your own data.

An important nuance: for slotting, rank goods not by sales value but by picking frequency, that is, the number of lines picked. A cheap but frequently picked item (say, tape or nails) lengthens a picker's route more than an expensive one that rarely sells.

How to run the analysis

You do not need special software; 1C or Excel is enough:

1. Take outbound data for the last 3 to 6 months: the item code and the number of order lines on which it was picked.
2. Sort the items by the number of lines, in descending order.
3. Calculate the cumulative share for each item.
4. Items up to 80 percent cumulative share are A, those between 80 and 95 percent are B, and the rest are C.
5. Compare the result with the actual layout: which A items are standing in a far corner.

For seasonal goods, fit the period to the season: you cannot judge winter heaters by summer data. On promotion days (marketplace discounts, for example) outbound volume jumps, so look at them separately or normalise them to an average day; otherwise a one-off spike distorts group A.

Assigning zones

• Group A — the zone nearest the exit, at a height comfortable for the hand (roughly between waist and shoulder) or on the two lowest levels.
• Group B — medium distance and medium height.
• Group C — the farthest corner and the upper levels.

There are extra rules. Heavy goods stay low even if they are in group A, which is a matter of safety. Items that are often sold together should sit side by side. Keep a large reserve of group A goods on an upper level and the picking spot low, so that the picker does not walk and replenishment is done separately.

A worked example

Imagine a warehouse with 1,000 items that has picked 120,000 lines in six months. The analysis gives this result: 150 items (15 percent) account for 96,000 lines (80 percent), that is A. 250 items (25 percent) account for 18,000 lines (15 percent), that is B. The remaining 600 items (60 percent) account for just 6,000 lines (5 percent), that is C.

If you move the 150 A items from 60 metres from the exit to 20, you save about 40 metres on every line. Over 96,000 lines that is nearly 3,800 kilometres of walking, even counting one way only. The figures are for illustration, but the logic is the same for any warehouse: a few items are picked often, and shortening their path speeds up everything.

Review and common mistakes

ABC is not a one-off job. Recalculate the analysis every quarter: the season, promotions and new products change the picture. Discuss the result of the analysis with warehouse staff: they know reasons the numbers do not show, such as awkward packaging or fragile goods. Move goods not in a single night but in stages, 20 to 30 items a week. The most common mistakes are:

• ranking by sales value;
• moving goods without entering the new location in the system;
• putting the picking spot for group A on an upper level;
• taking too short an analysis period, such as a week.

Conclusion

ABC slotting is cheap and gives a quick result: moving a few items changes the speed of the whole shift. During a warehouse audit, SkladKontrol reviews the layout and picking routes and helps find which goods are standing in the wrong places.