Studies show order picking accounts for around 50% of a warehouse’s labor costs. Georgia Tech reports that the number can be as high as 63%. With the rise of ecommerce, order picking has become more important. Why? Because while other operations in your warehouse can be automated, order picking largely remains manual. Technology can be brought in to help your pickers, but that technology can’t replace them. So how do you help your employees perform their best, reduce costs, and increase order picking productivity?
Our Order Picking Productivity guide will go over the following:
1) How Does Order Picking Impact Your Warehouse Profitability?
Order picking directly impacts your warehouse operations, and indirectly impacts other areas of your business. Your order pickers’ speed can keep your warehouse on track for order fulfillment, or it can put kinks into your schedule.
The results of your order pickers’ work affect your customer satisfaction levels as well. No one likes to receive the wrong products or too few of what they ordered. According to a small study of 500 customers, 54% said they returned a product because the seller sent the wrong item.
Your reverse logistics process is already getting a workout. The return rate for online purchases is about 20%. In order to keep your business margins healthy, you have to do what you can to lower costs.
BONUS: Before you go any further, download our Order Picking Strategies guide where we compare order-based, cluster, and batch-picking methods to see which method leads to the highest productivity.
2) Most Common Order Picking Goals
Yes, the goal of order picking is order fulfillment. However, there are a few common internal order picking goals most warehouse managers strive for. These goals keep your employees productive, effective, and healthy. They also optimize your order picking process. All of these goals work towards the bigger goal of a more efficient (and profitable) warehouse.
Minimize Travel Distance
An order picker spends half of their time traveling from one item to the next. So many managers seek to improve this time with good reason. Much of the technology related to order picking helps the picker move from place to place. The equipment you use often depends on your warehouse layout.
Maximize Use of Space
An optimized warehouse design goes far in improving order picking efficiency. Your warehouse’s flow should be specific throughout the entire warehouse. You should be able to map it out, like the image below.
Minimize Pick Errors
Minimizing picking errors on the front end means you won’t have to put that item back on the shelf when your customer returns it. Returns in the U.S. are expected to reach $550 million by 2020. The reverse logistics process (taking a product from the customer and putting it back in your warehouse) can be very costly.
Order picking duties put workers at greater risk for musculoskeletal disorders (MSD’s). In 2013, MSD’s accounted for 33% on work-related injuries. Warehouse workers came in second for the highest number of MSD’s that year.
Injuries increase factors like workforce churn. You also end up with a lot more uncertainty in your daily operations. With workers absent, there are fewer people available to perform the same amount of work.
3) Order Picking Methods
When business is booming, adding more labor is a short-term fix. As customer demand increases, maintaining efficient operations is critical to a well-functioning warehouse. Avoiding bottlenecks, ensuring accurate orders, and keeping up with customer expectations regarding shipping times is easier if you’re using the right tactics.
An important tactic to consider is your order picking methods. Simplified methods work well for small businesses, but, as your company grows, you’ll need to consider more efficient ways of storing, sorting, picking, and packing your warehouse goods.
Simply choosing the most advanced order picking method isn’t always a good idea. If your business’ volume doesn’t justify an expensive, automated solution, the initial investment may not be worth it.
Additionally, clunky technology that requires high-volume inventory management won’t earn a return during low periods.
Pick to Order
Pick to order is the simplest order picking method and goes by many names, including “discrete order picking” and “picking by SKU.” Essentially, an employee receives a list of orders and walks the warehouse to pick the products before packing and shipping them.
If you run a small business or a relatively small warehouse, this method makes a lot of sense. It’s a relatively accurate, low-cost approach that requires no technology or warehouse management system (WMS).
The main advantage of the pick to order methodology is the low startup costs. As long as you have goods to pick and staff to pick them, you don’t need to implement any technology or spend time organizing pick zones or schedules. Workers simply receive a list of orders and get to work.
Of course, you’ll need a very organized warehouse to keep a pick to order operation efficient. If your warehouse shelves aren’t properly organized, workers will spend a lot of time looking for products, increasing the amount of time it takes to ship products to customers.
A pick to order operation is manual. While this makes sense for a small business or small warehouse operation, it isn’t scalable.
One major mistake warehouse operators often make is adding more workers when business picks up. If there’s a one-off increase in demand, like a huge order or a seasonal cause, simply adding more bodies makes sense.
On the other hand, if your business is growing overall, you’ll need more efficient order picking processes so your workers don’t spend more time going back and forth than they do fulfilling orders.
The batch picking methodology combines products for multiple orders into one pick instruction.
What do we mean by that?
Let’s say three different customers order a combination of products, such as:
3 toothbrushes, 2 tubes of toothpaste, 1 bar of soap
2 toothbrushes and 1 bottle of mouthwash
Rather than handling each order individually (e.g., a worker walks the warehouse for Customer A’s products and ships them before making another trip for Customer B), a worker will pick all of the toothbrushes required for Customers A, B, and C and bring them to a dedicated sorting area.
They will then make another trip for the toothpaste, and so on and so forth. Once all the “batches” have been picked and brought to a dedicated sorting area, workers sort them by order and then pack and ship them.
Batch picking makes sense for warehouses with lots of SKUs and multi-product orders. Workers make fewer trips and maximize their pick volumes, thereby saving time and increasing efficiency. Plus, with fewer sporadic picks, there are fewer people moving through the aisles at once, drastically reducing the number of bottlenecks and allowing workers to get where they need to be sooner.
This method supports your warehouse layout optimization efforts as well. If employees pick based on locations, rather than orders, you can spread your most popular SKUs out evenly in one section of your warehouse. This enables more workers to pick those SKUs at the same time.
The batch picking model isn’t a good fit for every business. If you opt to use this approach, it has to make sense for your operations. If you run a small warehouse with narrow range of SKUs and few customers or destinations, a standard order picking method may be more appropriate.
Another disadvantage: orders must be sorted and consolidated after picking, adding time to the overall process. This may not be a disadvantage for you if you use a warehouse management system (WMS) that supports advanced picking methods.
Wave picking is much like batch picking, except orders to be picked are assigned in waves throughout the day. When orders are picked depends on specific criteria such as the carrier transporting them or the kind of packaging an order needs. Wave picking relies on a WMS to keep the process organized.
Wave picking allows warehouses to organize their operations in a way that takes factors like labor and transport schedules into consideration. Workers pick goods at the most optimal times, resulting in highly efficient operations.
Like batch picking, wave picking requires additional time for sorting, packing, and eventual shipping. In order to work properly, wave picking requires the implementation of a warehouse management software solution.
Zone picking, otherwise known as pick and pass, is an enhanced version of batch picking. Workers are assigned to specific locations, or zones, and order cartons move through those zones.
Each carton is associated with a specific order. To retrieve a SKU, the carton goes to that SKU’s area, where the assigned worker picks the required items and throws them in the carton. The carton then travels to the next location.
If an order doesn’t need SKUs from a particular zone, the carton skips that zone. In addition to implementing a WMS, warehouse managers who want to implement a zone picking strategy must invest in a warehouse control system for moving cartons.
Zone picking reduces motion waste by keeping workers in one section. Moreover, large orders can be fulfilled more quickly, which can build customer satisfaction and lead to repeat business.
Another advantage of zone picking is reduced training costs. For instance, some zones may require forklift operations while others only require manual picking. So, only workers in specific zones will need specialized forklift training.
This also means you can recruit faster and easily keep tabs on who can and can’t use specific equipment.
With zone picking, it can be hard to assign responsibility for inaccurately picked orders since there’s no single owner of the order. In addition, without a conveyor system, a separate area of the warehouse must be dedicated to order sorting.
Finally, if demand fluctuates, some zones will have more work than others, potentially leading to an uneven division of labor on the floor. In scenarios like this, it may make sense to rotate the schedule.
Using multi-tote or multi-bin contraptions, workers will pick items for multiple orders at the same time. Imagine walking through a supermarket with three different shopping carts: one for yourself, one for your neighbor, and one for your friend. In a nutshell, that describes a cluster picking operation. You make fewer trips while filling a greater number of orders.
Cluster picking allows workers to fulfill multiple orders without walking the floor numerous times. A consolidated order list helps them stay on top of orders and pick them accurately. Each picking shift can consist of anywhere from 4 to 12 orders, increasing the amount of goods shipped to customers on a given day.
A cluster picking operation requires a sophisticated warehouse management system to ensure clusters are scheduled and assigned properly. At the end of the day, cluster picking is only as efficient as the system masterminding it.
While this isn’t a disadvantage in and of itself, it should be a significant consideration for companies who don’t have the startup capital or the willingness to commit to implementation.
Order picking accounts for 60% of your warehouse operational costs. Make sure you’re using the most cost-effective order picking strategy by reading our detailed guide where we compare the 3 most common order picking methods.
4) Order Picking Equipment
The sort of equipment you have in your warehouse is largely dictated by your warehouse layout. Certain types of equipment will only fit in aisles of a certain width for example. When selecting equipment for your warehouse, you must also consider the resources required to get your employees trained to use it.
Of course, proper use is critical to a smooth running warehouse, but also to keep your employees safe. Let’s take the forklift for example. This extremely common piece of warehouse equipment causes 95,000 injuries every year.
Picker to Goods
Much like the name describes these types of equipment focus on getting the picker to the goods as quickly as possible. Cutting down on your picker’s transportation time makes for faster picking times.
Trolley and Roll-Cage Pallets: Your picker pushes a trolley or roll cage pallet around, putting the required goods inside. Some trolleys have shelves or are structured to accommodate plastic bins or totes.
Order Picker Forklift: Not to be confused with a traditional forklift, an order picker forklift lifts the operator so they can manually move goods on and off the order picker.
Semi-Automated Trucks: This type of truck is guided automatically to picking locations, often by laser. The picker picks until the truck is full, and then the truck returns to the dispatch area.
Goods to Picker
This category of equipment leans more heavily on more modern technology. You can see more potential for warehouse automation in these equipment types.
Warehouse Carousels: You can have either vertical or horizontal carousels, depending on your warehouse layout and design. Using computer control, goods are presented to the picker to place in customer order bins.
Totes-to Picker Systems: Your employees will use a computer to direct the extraction and presentation of certain totes to pickers for order assembly. The totes usually travel a conveyor to the picker. Your pickers will consistently receive totes for the orders they’re putting together.
Shelf Modules-to-Picker Systems: This system is very similar to the totes-to-picker system, except entire shelving units are presented to your picker. Robotic drive units, taking computer direction, will present shelving units to the appropriate picker station. Also called a robotic butler, the bot will return the shelf module to storage, or present it to another picking station.
Latest Order Picking Assistive Technology
We would be remiss if we didn’t include a section about some of the latest innovations that assist your order pickers in their work. Two of the biggest tech upgrades for order pickers are voice technology and mobile order picking.
Voice Assisted Picking
The primary piece of equipment is a microphone headset worn by your pickers. They can receive audible instructions about where to travel and what to pick. This leaves them hands-free, with no paper slips to deal with.
Mobile Order Picking
If all of your inventory is fitted with a unique barcode, then a mobile scanning technology may be a great fit for your warehouse. A WMS can push order picking information to your pickers’ mobile devices, along with the ideal picking route. You pickers can achieve almost perfect picking accuracy with this system, since their information is fed directly from the customer’s order to their mobile devices.
5) Your WMS and Your Order Picking Equipment
Some order picking equipment, like trolleys, have been around for quite some time. As technology continues to penetrate the supply chain industry, we're even seeing upgrades on that sort of equipment. Like automated trolleys that follow order pickers as they move about the warehouse.
Your WMS is the information highway that connects all of these different points in your warehouse and the rest of your supply chain. A fully integrated WMS will communicate with your warehouse stations and the equipment.
Increase Order Picking Productivity with an Integrated WMS
In order to use the advanced fulfillment strategies we’ve described to their fullest potential, you need a warehouse management system. By automating tasks like order picking lists, you free up your warehouse staff to take care of the tasks that really require their attention. If order picking takes up 50% of your warehouse budget, make sure those resources are used to maximum impact.
As the most integrated WMS on the market, Logiwa is the solution you're looking for if you need a solution to help you pick, pack, and ship faster. Click here to learn more about what Logiwa can do for your warehouse performance.
Download our Order Picking Strategy guide
Order picking accounts for 60% of operational costs in your warehouse. As such, your order picking method has a huge impact on your bottom line.
In this guide, we simulated 3 different scenarios to compare the effectiveness of the 3 most popular order picking methods.Learn More
Written by Ruthie Bowles
Ruthie is a content marketing consultant for Logiwa. Her specialties include small business development and inventory management.