Start With the Right Metrics Organizations invest heavily in technology, automation, infrastructure, and transformation initiatives in the pursuit of world-class supply chain performance. But what if one of the most powerful levers for improvement is also one of the simplest? Dr. Ed Frazelle poses an important question: What is the fastest, least expensive, and simplest way to get a supply chain up to world-class standards? His answer: put a world-class set of metrics in plac

How Pallet Storage, Picking, and Slotting Optimization Can Unlock Capacity, Reduce Cost, and Improve Warehouse Performance

Supply chain operations are under unprecedented scrutiny. Between cost pressures, working capital constraints, and relentless market volatility, enterprise leaders are under mandate to drive resilience and efficiency. Yet an inconvenient truth persists across boardrooms: the vast majority of supply chain transformation initiatives still fail to hit their performance targets. The bottleneck rarely lies in capital allocation or software capabilities. It lies in workforce readin

Dr. Frazelle explains what is RightChain and how it helps companies and their supply chains.

The Wisdom for Warehousing course includes Dr. Frazelle's lecture video at Georgia Tech, a fully edited and illustrated course, richly illustrated course slides, an excerpt from his World Class Warehousing book, video tours of the some of the world's best warehouse operations, and an assessment tool to compare your operations with best practices.

There is no universal standard for measuring logistics quality, RightChain introduces the Perfect Order as the most comprehensive metric. A perfect order requires every step, from order entry and inventory availability to delivery, billing, and documentation to be completed without error. It demonstrates how small failures across individual activities compound, significantly impacting customer satisfaction and overall supply chain performance.

Dr. Frazelle explains that the goal of supply chains is not to minimize inventory, but to optimize inventory. In inventory optimization the answer is often to increase inventory levels to improve business and supply chain performance. The inventory strategy need to define when and why is it optimal to increase or reduce inventory levels.

The article explains that the growing gap between supply chain complexity and decision-making capabilities drives higher costs, excess inventory, and inefficiencies. RightChain bridges this gap through AI-powered optimization, expert support, integrated decision-making, and continuous improvement, enabling organizations to make faster, smarter, and more effective supply chain decisions.

The video explains the different solutions proposed by RightChain for the warehouse storage, picking and slotting of +34,000 SKUs.

Warehouse storage capacity should not automatically be designed for peak demand. The optimal size depends on the peak-to-average ratio and how long the peak lasts. Short, extreme peaks can be managed with temporary storage, off-site warehousing, or delayed inbound shipments, while longer, moderate peaks justify building capacity closer to peak requirements.

RightChain’s AI-powered Slotting-as-a-Service builds on 30+ years of proven methodology to optimize warehouse operations. By continuously answering four key slotting questions—storage mode, pick face, slot location, and re-slotting—it minimizes labor, storage, and handling costs while improving productivity and accuracy. The result is a sustained 23–38% reduction in picking and restocking costs.

Just as a doctor should diagnose a patient before prescribing treatment, companies should diagnose their supply chains before investing in new technology, software, or services. RightChain Insights uses AI, pattern recognition, and performance analysis to identify and quantify the greatest improvement opportunities, ensuring solutions address real needs rather than assumed problems.

Honda’s warehouses were operating above 98% capacity, preventing the implementation of a new warehouse management system. By moving excess inventory to an off-site warehouse and reducing utilization to 85%, the company uncovered a large amount of unnecessary safety stock created by poor forecasting. This visibility drove major improvements to its forecasting process, inventory planning, and overall warehouse efficiency.

Supply chain projects create the most value when data and insights guide decisions from the beginning. Early planning offers the greatest improvement potential at the lowest cost of change. RightChain Insights uses AI to uncover critical patterns, relationships, and opportunities, helping teams eliminate high-risk solutions and identify the right processes, designs, and technologies before costly implementation begins.

A retailer rejected a $2 million material-handling investment because its ROI considered only labor savings. Yet reducing dock-to-stock time from 96 to 24 hours could eliminate $6 million in inventory and significantly lower carrying costs. The case shows why supply chain investments must be evaluated holistically, capturing inventory, capital, service, and productivity benefits.

Supply chain philosophies can become counterproductive when conflicting goals, such as higher service and lower cost, are pursued without considering trade-offs. Effective decisions require optimization: clearly defining the objective and the constraints. By framing problems analytically, organizations can replace assumptions, politics, and competing philosophies with solutions that balance cost, service, and operational realities.

Warehousing is more than inventory storage, it enables efficient production and supply chain optimization. By supporting economical production lot sizes and seasonal inventory builds, warehouses help reduce changeover costs, improve factory utilization, and balance supply with demand. Examples of RightChain optimizations in food, beverage, and consumer goods companies show how additional storage can generate significant overall supply chain savings.

Choosing supply chain software should not default to ERP or best-of-breed solutions. The right approach minimizes vendors, applications, and interfaces while meeting functionality, ROI, and implementation requirements. ERP may work for simpler operations, while complex, mission-critical supply chains may require specialized solutions. The best technology is the one that fits the business’s actual needs.

Organizations often reward supply chain firefighting while neglecting the planning needed to prevent recurring problems. By shifting attention from shortages, delays, and errors to their root causes, companies can replace chaos with disciplined planning. A strong supply chain strategy, supported by data, dedicated resources, and continuous planning, reduces costs, inventory swings, shortages, and operational disruption.

Designed using Dr. Frazelle’s World-Class Warehousing principles, the award-winning ACS Logistics Center combines AI-based slotting, packing optimization, ergonomics, automated cubing, ASRS, intelligent packing, and sorting. The design enabled ACS to consolidate its nationwide distribution network, improve warehouse efficiency, and redirect millions of dollars toward cancer research.