Content for this blog post provided by John McBride, Slot3D Business Development Manager.
What factor(s) does Slot3D consider for slotting SKUs versus the commonly used practice of ABC analysis?
ABC analysis was once considered an industry best practice. Certainly, it was preferable to previous practices, which barely took SKU movement into consideration. Velocity based ABC analysis is designed to slot the SKUs with higher velocity ahead of those with lower velocity.
Many have found this method to be a relatively easy one to setup using spreadsheet programs in conjunction with ever changing database information. Although using spreadsheets is a manual exercise requiring readjustment of slotted SKUs due to seasonality, new product mix, or varying demand, the results may render favorable savings, particularly if readjusted on a regular basis.