Order Picking in the Warehouse: Choosing the Right Strategy

Order picking is one of the most important processes in a warehouse or distribution center, making up the majority of operating costs and directly impacting service levels. Selecting and implementing the right picking strategy will ensure accurate on-time deliveries and cost-effective labor. In this article, we will review some different order picking strategies and how they can improve an operation.

Single Order Picking

One of the most common picking methods is single order picking. Just as it sounds, this method requires one order to be picked at a time, from start to finish, by a single operator. This method is easy to learn, does not require advanced technology, and is less prone to errors due to its simplicity. Single order picking is best suited for smaller warehouses or where entire pallets are picked. For larger and more complex operations, single order picking becomes inefficient due to the high amount of travel required throughout the warehouse.

Batch Picking

Opposite to single order picking, batch picking groups multiple orders together that have the same SKUs, which are later sorted by an operator before being shipped. The main advantage batch picking has over single order picking is the ability to pick multiple orders in a single trip, which improves operator productivity. Due to the increased complexity of batch picking, a warehouse management system (WMS) and order management system (OMS) are required to properly route and track orders throughout the warehouse.

Cluster Picking

For cluster picking, multiple orders are picked, from start to finish, by a single operator. This method is different than batch picking in that each order is sorted as it is picked. This is accomplished with the help of a cart containing individual totes for the operator to place SKUs in as they are picked. Cluster picking does not require a warehouse management system (WMS) and works best for smaller orders and smaller warehouses. This can create significant improvement from single order picking since the operator’s total distance traveled is reduced.

Zone Picking

With zone picking, the warehouse is split into individual zones that an operator will pick from. Operators will pick all the SKUs for an order in their zone and then send it to pack or the next zone if it is incomplete. This method can be used independently or in conjunction with the above-mentioned methods. This is a valuable option for high volume warehouses that struggle with operator congestion in aisleways.

Wave Picking

Wave picking can be utilized independently or in congruence with the above-mentioned methods. Wave picking groups orders together and releases them to operators in batches or “waves”. Orders can be grouped together based on a variety of different factors, such as shipping schedules, shift changes, product characteristics, etc. Wave picking is best suited for operations that are using batch or zone picking, already have a warehouse management system (WMS) and order management system (OMS) in place, and are looking to fully optimize their picking strategy.

Choosing the right order picking strategy is a great start to optimizing a warehouse operation. The best strategy will vary based on company size, inventory size, number of orders, SKUs per order and technological capabilities. At Establish, we combine a fact-based approach with state-of-the-art technology including warehouse simulations and data analytics to determine the optimal picking strategy for organizations.

An Introduction to Voice Directed Picking (VDP)

What is Voice Picking?

Voice picking technology is equipment that allows for hands-free and eyes-free capability in the warehouse. It is currently becoming a new standard in distribution centers, used primarily for outbound operations but can be applied to any process in a warehouse. This is because for outbound operations, voice-directed picking (VDP) increases overall productivity, accuracy, and safety in the facility.

VDP adapts Bluetooth technology and integrates with the warehouse’s WMS or ERP system. Rather than an employee reading information off a picklist or scanner, the system communicates to the employee via a wireless headset and directs them where to go in the warehouse and what to pick. VDP also provides real-time confirmation, removing the need of physical scanning and the logging of information, thus improving efficiency.

What are the Benefits?

Reduce Mis-Picks and Increase Safety

As mentioned, VDP creates a hands-free environment. It removes the need to press buttons, manually log/interpret information, etc. Instead, the employee on the headset follows instruction from voice commands and audio feedback which is directly logged into the WMS system. This can reduce the number of mis-picks that would normally be caused by human error due the ease-of-use VDP provides.

Safety in the warehouse is the most important element in any facility. There are many factors to consider such as material handling equipment and other employees on the floor which can cause unwanted accidents. VDP’s capability allows employees to be more aware of their surroundings when traveling around the warehouse. They are no longer distracted from reading their pick list or scanner throughout the warehouse and only have to focus on traveling safely to their pick location.

Increased Productivity

According to Körber Supply Chain, integrating VDP in the warehouse will usually create a 20-25% increase in productivity. The integration immediately eliminates the need for extra paper and hand-held devices which decreases the time to stop, read and scan items and picklists. Instead, listening and speaking allows for the user to multitask during the picking procedure. Then, as data is collected over time, even more productivity can be found by finding the most optimal pick-route. This information can be extracted to decrease travel time within the warehouse. These increases in productivity reduces the labor needed for picking which allows reallocation of resources where needed.

VDP is also seen being integrated with picking robots to further increase productivity. In addition to an employee utilizing VDP, picking robots will utilize the average pick and travel time to ensure that the picker and robot are just-in-time with one another. These robots provide an additive feature in the automation process.

Data and Continuous Improvement

This method not only provides real-time information but simultaneously collects data to provide helpful statistics such as how long the task will take to complete and average number of items on the pick list. These statistics are important for continuous improvement in the warehouse. Access to this information ensures that the pickers are arrived on time, at the correct location, and on a larger scale, maintain KPIs.

The Future of VDP

As warehouses continue to introduce new technology, the use of VDP will continue to grow as it increases accuracy without the sacrifice in time. Integration with picking robots will most likely grow in parallel due to their complimentary functionality, further increasing standards. The freedom that VDP allows a company to address other bottlenecks in the warehouse such as quality assurance or inventory storage by reallocated picking labor to where needed. Not only will productivity increase in the warehouse, but VDP also provides an avenue for companies to become more data-driven, which is critical for continuous growth and improvement. 

Why you Should Prioritize Reverse Logistics and Returns Management

This year, returns set an all new single-day high and certain companies are so overwhelmed that they are refunding consumers and telling them to keep the items rather than shipping them back. Returns have become a large pain point for many companies and can add a lot of extra costs when not handled correctly. A thorough understanding for reverse logistics and returns management can allow companies to minimize the added costs and recoup some value while earning increases in customer loyalty.

Returns can happen in any industry for many different reasons. Whether the reason for return is the consumer’s fault (e.g. they ordered the wrong size), a carrier’s fault (e.g. product got damaged during transit) or the distributor’s fault (e.g. shipped an expired product) every company should prepare themselves to handle reverse logistics and returns.

The What: Standardized Process with Automated Workflows

All efficient returns management strategies rely on understanding returns data so that standardized processes can be built, and workflows can be automated. This will prepare an operation to handle all the different returns and minimize the decision making happening in real-time. Defining necessary functionality and selecting appropriate support systems is good practice. A pre-screen with the consumer to allocate the return into the correct workflow allows the logistics team to predict and plan for inbound goods. Workflows can vary company to company, but a quality check is consistent. Assessing goods and distribution into pre-determined workflows leads to quick turnaround time and fastest recouping of investment.

The Why: Financial Incentive AND Customer Loyalty

Financial incentive is clear – the opportunity to resell the goods and recoup value, whether on the primary market in full or a secondary market for fractions. What is less recognized, is the influence on customer management. Customer expectations are high for returns – quick and easy response with free shipping. Managing that relationship can go a long way. Remember that returns contribute to the bigger picture: customer loyalty and repeat sales.

The How: Valuation

With every product, being able to appraise a return is absolutely necessary. Understanding why the return is being made, any repair/refurbishment costs necessary and the future-value of the product reselling (if at all) on the primary or secondary market is key. Having a system in place to do so is extremely important. It has even led to some companies leaving the product with consumer free of charge.

Goods valuation does not paint the entire picture. A considerable piece of the puzzle is customer loyalty and retention. Determining value here is specific to each company, and something not to be ignored.

Looking Ahead

A trend significant of late is that of sustainability. Government regulations have taken interest in the proper disposal of goods and incentivized reuse and recycling. Secondary markets have flourished in recent years, leading to the development of closed-loop supply chains – those with 0 waste. We predict that 2021 continues to bring a focus to ESG initiatives, and that those not invested there will be left behind.

Warehouse Automation: Where to Start?

In the days of the pandemic (and even pre-pandemic), the trends and challenges facing the warehouse industry are clear: difficulty finding labor. As such, exploring automation for warehouses has never made more sense. However, it is a daunting task to understand and explore how to start. Below, we explore basic options to explore warehouse automation.

Automated Repeated Material Movements

Automating activities that only people can do is difficult to achieve currently; however, there are repetitive movements such as walking or transporting material that can be automated, typically at a good ROI.

For carts, something like CartConnect works well. Also, conveyance is always a good option. For repeatable pallet load movements, AGV forklifts are good at moving loads from one end of an operation to another.

Automated Storage and Retrieval

The second option is arguably the most automated – automated storage and retrieval (ASRS). There are many systems under this umbrella, but the concept remains the same for all: the ASRS will take product the operation has received, automatically store them, then pick/deliver them to an operator as needed.

Systems range from a mini-load system to a full pallet ASRS to the new solutions on the market for smaller product like the AutoStore. Also included are dense/fast-pick solutions such as vertical lift modules (VLMs) and horizontal and vertical carousels.

Whichever system is selected, the benefits are the same: more efficient storage space and reduced warehouse labor in putaway and picking, 2 of the most time-consuming processes in distribution operations.

Transaction Automation

Though perhaps not the first thing to come to one’s mind when thinking of warehouse automation, transaction automation is arguably the most important. This is a very broad term but stands for eliminating manual operator interactions to log transactions. The default way for an operator to log inventory movements, receipts, etc. is to manually type it in to the ERP or WMS. The ways to automate this are varied, from RF guns/scanning to RFID to voice picking to put-to-light/push buttons. Regardless of the method, automating transactions improves

5 Supply Chain Trends for 2021

This past year has created many new challenges for everyone, causing consumers and companies to adapt. We expect some of the supply chain changes to be temporary but that many of them will have a lasting impact on the supply chain industry going forward. Below, we discuss some of the trends that we expect to see in 2021.

Fulfillment and Logistics as a Competitive Tool

Every year we continue to see consumer behavior change, and in no year has that change happened as rapidly as in 2020. People want to get quality goods for a reasonable price and quickly. Unorganized supply chains will become increasingly exposed as companies will have to choose between bad service levels or unsustainable costs to meet customer demand. The most obvious example of this trend is Amazon's move to achieve next-day or same-day shipping. As stated above, consumer expectations for service continue to rise. This means businesses that have systems in place to forecast well, stock optimal levels of inventory and fulfill efficiently have a significant advantage over those that do not.

Focusing on E-Commerce, Service Levels and Omnichannel Development

The shift from brick and mortar retail to e-commerce has been growing every year, and COVID-19 only expedited that growth even more. It's no surprise that consumer’s extreme shift to e-commerce seen in 2020 will have a lasting effect on the way people do business moving forward. In addition to the e-commerce shift, service levels are also becoming a higher focus as consumers are going to choose the quickest and most reliable option. To keep up with these shifts, companies are going to have to continue to focus on developing their omnichannel strategy. This means using support systems to create an interconnected network of stores, warehouses and 3PLs, providing the flexibility to fulfill both large wholesale purchases and small e-commerce orders. Companies can then leverage this interconnectivity within the network to optimize fulfillment strategy on an order level basis.

Shifting E-Commerce to a 3PL

Another industry trend we expect to see is a significant shift for e-commerce distribution towards third-party logistics companies (3PLs). The e-commerce industry, in comparison to brick and mortar stores, presents a complexity that is hard to tackle for smaller companies. 3PLs provide an option that will allow companies to set up much quicker than if they opened their own warehouse and allow them to avoid significant fixed costs, have access to an already established network and get specialized processes based on their needs.

Making Procurement a Focus

COVID-19 complications and global trade friction with China mixed with consumer’s increasing expectations for better service have signaled to the supply chain world that now may be the time to focus on procurement. By moving suppliers closer to home (near-shoring) and prioritizing the procurement process to make lead time and flexibility priorities, companies can improve their fulfillment times and overall supply chain. Developing a regional supply chain offers the better potential for mutually beneficial relationships and improves both time and proximity to market. This confidence in relationship management and product could challenge the prior approach of low-cost country sourcing.

Freight Normalization – A New Baselinne

COVID-19 has caused overwhelming increases to volume causing capacities to be tested and costs and rejection rates to skyrocket. As the freight companies profit on these higher rates, it can be expected that they will reinvest into capital expenditures, such as more trucks, increasing capacity to meet market demand and normalizing from the economic shifts of 2020.

 We wish everyone a safe and healthy 2021.

How to Modernize Your Warehouse/Distribution Center: Part 2

In Part 2 of our process to modernize warehouses, we discuss the systems and automated confirmations necessary to eliminate human error and increase efficiency.

Support Systems

Support systems are critical in transitioning a warehouse into the modern age of logistics. Some of the most common types of support systems include Enterprise Resource Planning (ERP) systems, Order Management Systems (OMS), Warehouse Management Systems (WMS) and Inventory Management Systems (IMS). Whether your distribution network consists of hundreds of warehouses around the globe or a single warehouse that ships to just a few customers, there is a support system that can help. There are numerous different options out there and each one has different capabilities, strengths, and weaknesses. Finding the right support system for your business is critical for any operation. These systems generally support warehouse operations by collecting and tracking data, standardizing processes and allowing operations to be executed more efficiently. The system should support all the current operations by decreasing manual work and helping implement future improvements. Without a WMS or other support system, warehouse processes and operations will be very manual and slow. Additionally, without a support system you will be limited in the further improvements and technology that can be added to the warehouse. Implementing a support system is a significant investment and might be difficult to see the exact ROI but it is one of the most important investments that can be made in a warehouse. It will support the entire operation by:

• Allowing processes to run quicker, meaning less time is spent on standard operations and higher throughput is achieved.

• Tracking and giving access to data which can be analyzed to see where further improvements can be made to reduce costs and increase output.

• Making it easier to track and manage inventory and KPIs which will result in better performance, lower costs, and higher output.

Automated Confirmation

Automated confirmation is the piece that brings together everything that we have talked about so far. We use the term ‘automated confirmations’ to be a blanket statement for all methods of an operator verifying their warehouse activity systematically, such as RF scanning, RFID, voice picking, etc. Using automated confirmation technology can drastically reduce the opportunity for human error and the time it takes to perform operations. An operator just needs to scan/speak/move a product and/or location rather than writing information down or updating the system manually. This will also provide increased visibility. Since the system is being updated at the time of the transaction, there will be a more accurate and real-time look at data which can help with knowing where products are and how much time is spent on different operations.

Adding these improvements will modernize your warehouse and allow it to operate more effectively and efficiently compared to how it operates today. They will also set you up to continuously grow and improve by making it easier to implement new improvements and technologies down the road.

How to Modernize your Warehouse/Distribution Operation, Part 1

For companies to stay successful over a long period of time, they must constantly be improving and changing with the times. This is especially true in warehousing and distribution. One of our core competencies at Establish is helping our clients logically and cost-effectively modernize and improve their warehouses and distribution centers. Over the next few weeks, we will be walking you through many of the steps necessary to modernize warehouses, from the most basic operation to a fully automated solution and everywhere in between. We start with two of the most important: Inventory Locations and Product Labeling.

Inventory Locations

Throughout a warehouse, there are many different places that inventory is stored. Simply adding names to each of those locations can help pave the way to a modernized warehouse so that an item and quantity can be tied to for efficiency and accuracy.

The naming structure can be virtually anything and should be relatively easy to follow. Each individual location should have a unique name and be labeled, with the labels being be easy to read and including barcodes to allow for scanning capabilities or check numbers. At a minimum, inventory location labels should have the location name and barcode, but they can also include more information such as color coding and the product(s) stored there. Below is a sample location name for a warehouse with standard pallet racking aisles:

The benefits of adding inventory locations to your warehouse include:

• Better tracking and traceability of inventory.

• Improved inventory accuracy and easier cycle counting.

• The ability to implement more robust warehouse practices such as barcoding.

• Improvement to current picking and put away processes.

• More functionality out of the current support systems.

Product Labeling

In addition to labeling the inventory locations, all the products in the warehouse should be properly labeled. These labels should include the product name, associated barcode, lot/batch/expiration date (if applicable) and be clear and easy to read. Products should be labeled directly upon receipt, prior to being put into storage. Even better, it can also be coordinated with suppliers to include these labels on the products that they come in already labeled. Labeling allows products to be identified seamlessly during receiving, picking and inventory counts and will help reduce human error and manual processing.

Next time, we talk about the IT and Support Systems as well as Automated Confirmations (RF scanning, voice, RFID, etc.).

Declining Business: 3 Key Ways to Save in Warehousing Costs

Here are 3 key ways to help cut warehousing costs to prolong your positive cash flow:

1: Data-Driven Forecasting

Completely accurate forecasting is hard to achieve, but frequent, data-driven forecasts with informed strategic adjustments are the key to determine how much product nee on-hand inventory is needed. Being able to plan for While this seems basic, there are other areas where accurate forecast can help save money in the future. For example, if you are using a 3PL and can say that your inventory levels will drop x amount each year, your footprint in their warehouse should drop as well allowing the 3PL to fill that space with other clients thus saving you money.

2: Inventory Analysis

In a business that’s losing demand, there’s a good chance that the are certain items that maintain the demand while most others are being phased out. It is very important to keep track of the demand for each individual SKU in the warehouse. An ideal situation would be to set up all the slow-moving SKUs as direct shipments from the manufacturer while keeping only the high moving SKUs in the warehouse. While the shipment costs directly from manufacturer to customer will likely be higher, the savings from not keeping the inventory in stock will outweigh the increased shipping costs. Another option to look into would be to separate slow-moving SKUs in one smaller and centralized warehouse. You can keep the inventory levels low allowing you to lower the footprint. Staffing needs will also be reduced since the handling of these SKUs is much less than in the faster moving warehouse.

3: Inventory and Staffing Management

Proper inventory management is important for all businesses, but it is especially important in declining ones. Start by looking into any trends that might be developing in the orders. It is important to think of outside the box methods for optimizing your warehouse strategy. Instead of looking at storing the SKUs by size or product line, look to see if there are certain items that are usually part of the same order. Group these items close together in your warehouse to save on the handling costs. Instead of storing 1 small SKU per bin, store 3 in each by adding in dividers to the bins. There is also a greater need for cross training of the staff in a slower moving warehouse. There will be much more down time and you cannot afford to have employees not being productive. There will be a slight learning curve at the beginning when the employees are learning the other job functions of the warehouse, so productivity might go down. This is fine as the returns once the cross training is complete will be much greater than the lost production early on.