There are many inbound and outbound processes involved in moving and managing inventory that make up the discipline of warehouse management. Businesses often focus on outbound processes to increase customer satisfaction and reduce operational inefficiencies and costs.
But order picking is a crucial part of the outbound piece of warehouse management. It constitutes all of the steps involved in physically retrieving the items stored in the warehouse to fulfill a customer order.
Importance of Improving Order Picking in the Warehouse
Smart businesses look to improve order picking for a good reason — it’s the most labor-intensive and expensive activity in the warehouse, typically accounting for more than half of warehouse operating costs.
Improvements in order picking help businesses get the right products to customers faster, and spend less money on the associated steps. Warehouse order selectors typically take a pick list and travel to different spots in the warehouse to get the items, search for them on the warehouse shelves, extract them and match paperwork to ensure order accuracy before shipping.
The most time-consuming part of the order picking process is traveling, which takes up 55% of the warehouse selector’s time, on average, followed by paperwork and other activities (20%), searching (15%) and extracting (10%), according to research from the Georgia Tech Supply Chain and Logistics Institute. For this reason, much of the work around improving order picking processes is aimed at reducing unproductive travel time.
Achieving best-in-class order picking requires knowing where the products are, exactly how many are available, knowing how many you need — so you aren’t picking for each individual order one at a time — and ensuring they are strategically placed to facilitate quick picking and processing for shipping.
So how can businesses minimize order picking time while ensuring accurate order fulfillment and employee safety in a warehouse?
55 Warehouse Order Picking Tips & Best Practices to Adopt
Since there’s no one single way to ensure perfect orders, there are many methods, tools and processes a business may employ to enhance order picking. The combination of strategies, best practices and technologies that your organization should adopt will depend on the industry, number of items sold and speed at which inventory moves through the warehouse(s).
Looking at the design of the warehouse and the order picking methods used within its four walls will help a business select the proper processes, technologies and equipment to improve order picking.
Warehouse Design Tips for Order Picking
Order picking excellence starts by choosing the right warehouse design and flow for your business processes strategy.
Choose a warehouse type and flow. Warehouses are usually designed to move goods in one of the layouts below (or some combination of them).
- U-shaped flow positions the receiving and dispatch docks at the same side of the building, and products move in a U-shaped manner from receiving to dispatch. This design offers shared docking space and is typically best for small buildings.
- I-shaped flow put receiving on one end and dispatch at another end of the building so all goods move in a single direction. An I-shaped flow is good for high-volume businesses, as well as those that need strong security control over goods entering and leaving the warehouse.
- L-shaped warehouse flow has inbound unloading on one end and outbound shipping at a perpendicular angle to that area. This can make cross-docking — when items are taken off one truck and immediately loaded onto another — easier. This is good for businesses that may never stock products on racks, sending out stock soon after bringing it in.
Decide how product is organized within that flow. This could be what’s called a triadic warehouse design, which is broken into three zones — fast-moving, medium-moving and slow-moving product. In warehouses that don’t use this design, product is not zoned. Many warehouses adopt a design in which they automate one section with suitable items and still having people involved in picking items, to some degree, in the other.
- Place fastest moving products closest to fulfillment so they’re easy to pick.
- Store items that often sell together near each other.
Warehouse Order Picking Methods
If you don’t have a picking method, you’ll be picking for each order chronologically without visibility into the other orders in your queue — this leads to lots of time wasted traversing the warehouse to retrieve the same item throughout the day.
Operations with low order volume or that sell high-end or heavy products should look to discrete, individual order pick, piece picking or picker-to-part. This is the most straightforward order picking method, in which one person picks the complete order, walking through the warehouse, pulling all the necessary items and often consolidating them in a container.
For organizations that need to pick and pack multi-item orders quickly and have a high number of SKUs and picks per order, wave picking is a good choice. Picking is conducted in scheduled waves, and all zones are picked at the same time. The items are sorted downstream as they’re prepared for individual shipments. Wave picking places like orders together based on pre-defined rules and releases them to be fulfilled together so that pickers can pick for the entire wave at the same time.
To increase picking efficiency, the workers can pick in batches where they pick for multiple order — such as like items or items located in similar areas — in one trip. For businesses with a low number of picks per order, batch picking can reduce travel time. The operator goes into the warehouse, picks the full quantity of items required and then allocates them to each individual order.
For large warehouses with many SKUs, zone picking is often advantageous. Batch picking may incorporate the zone picking method, in which a selector is charged with looking after a certain area in the warehouse, getting all the items for their zone and then passing the order on. For this reason, zone picking is also known as pick and pass. The items may move, for instance, along a conveyer belt until all required items are in the box.
Innovative businesses are trying good-to-person setups and sorting systems to increase the efficiency of the picking process. The warehouse selector stays in one place, and the products are brought to the selector by a conveyer, a robotic device or some other automated technology. Think of good-to-person as automating the discrete picking process.
Another way to reduce travel time is pick-to-box. Pick-to-box integrates more automation into batch picking. Picking areas may be organized into picking stations, each connected by a conveyor belt. The selector fills the box with the products he or she is responsible for and moves the box along until the order is fulfilled.
Warehouse Order Picking Equipment and Technology
Another key aspect of warehouse management is technology that supports the optimal strategy for the facility and the nature of the business. For instance, a business with a low number of SKUs and fewer lines picked may employ an individual order pick method, and leverage pick-to-belt technology or pick from pallet. Businesses with a large number of SKUs that move high volumes may opt for batch picking and voice or pick-to light-technology.
In considering what equipment and technologies are right for your warehouse:
Align technology with the number of SKUs and volume. Look at the number of lines being processed per day versus the number of products. In general, the higher the number of SKUs and number of lines, the greater the need for automation.
Start by implementing a warehouse management system (WMS). Even the simplest warehouse operations need some form of a warehouse management system. Look for basic order picking functionality to store and track SKUs and item location and automate the creation of pick lists from customer orders. A WMS will check a customer order against available inventory and provide instructions in the form of a pick list. It takes into account the layout of the warehouse, available labor and the location of the equipment to maximize efficiency and ensure accuracy in order picking.
Integrate some form of mobile picking technology. From the basic mobile RF scanners, to technologies that direct picks by illuminating buttons on the shelves in a pick path (pick-to-light) or guide a headset-clad selector by voice (pick-to-voice), there are many mobile technologies that are essential to accurate order picking, guiding users to the exact aisle, shelf, or bin in the most logical path. Ensure the technologies used on the floor can easily talk with the WMS so you don’t introduce unnecessary complexity.
Make sure the WMS is integrated with the ERP system. Tracking movement and goods in the warehouse provides a wealth of valuable data for other departments, such as purchasing or customer service. Make sure these other functions have access to the same data within the software they use for their jobs.
Select the right materials handling system and adjust the systems as SKUs and volume increase. An increase in the number of SKUs requires much more logistics in the warehouse. With low SKUs and low volume, a simple materials handling system like forklifts may do, but as volume and complexity increase, the business will need more mechanization. Materials handling equipment is an innovative space that leverages many innovative ideas and technologies.
Consider advances in equipment to enable narrow aisle configuration. Optimizing the available space in the warehouse provides advantages beyond storage — it can also help reduce travel time in the order pick process. Conventional warehouse aisles are 12-14 feet wide. Narrow aisles are typically 8-10 feet, but can be as little as six feet. Combining the right technologies and equipment, warehouses can achieve order picking gains with narrower aisles.
Maximize warehouse space by using the right equipment. Lift truck technology is constantly improving, and there are trucks capable of getting through narrow aisles and into tight spaces, such as the articulated forklift. Amazon leverages robots that resemble Roomba vacuums. These robots ferry the necessary items from shelves to the picker and push them back into tight spots when all items are retrieved.
Implement conveyer technology. There are dozens of types of conveyer technology that can be used for more efficient picking, as well as the ergonomic health of the employees doing the work.
Look at advancements in sorting technologies. Combined with conveyers, sorting technologies provide an accuracy and efficiency boost — producing shorter lead times and more accuracy.
Find out what storage is right for the business and don’t overlook the benefits of automated technologies. A carousel, for instance, automates picking by means of a shelving unit that rotates along a track to bring the items to the picker. They can be configured to the picking method chosen by the business.
Understand all the automated picking technology options available. Some companies have a lot of success with pick-to-light or pick-to-voice equipment. With pick-to-light, pickers scan an order barcode and the item’s quantity and location lights up. Pick-to-voice guides the picker and provides confirmation through a headset. Today, augmented reality technologies are enabling advancements such as pick-via-smart glasses, which display an item’s location and quantity digitally through a wearable headset. They provide voice-guided instructions and the ability to scan directly with the headset — freeing up the worker to use both hands and maximize efficiency with fewer touches.
Implement smart technologies. IoT technologies can help deliver real-time inventory counts, while advancing wearables technology like smart glasses are making it easier to keep track of inventory movement and ensure that the right count is there to begin with. This saves the picker time and the frustration of looking for items that aren’t there.
Explore the potential of picker robots. Picker robots can actually do the picking, with the ability to reach high shelves and fetch items to pack, while also equipped with sensors that keep them from bumping into people or shelves.
Get to know co-bots. Co-bots can be useful to deploy for tasks that have some repetition, but also require some level of human intervention. The co-bot can put together the box, for example, or retrieve items with predictable shape or weight — such as a shoebox.
Warehouse Order Picking Best Practices and Strategies
The warehouse design, order picking methods and technologies will help determine which of the strategies below make the most sense to implement to improve your order picking processes.
Start with a clear objective on what you want to improve and how you will measure it, then select the tips that make the most sense.
Ask the people who work in the warehouse where the bottlenecks are. Don’t forget the many people who often support your processes, including office administrators, equipment operators and others.
Don’t base order picking targets on averages. Seasonality and economic trends will greatly affect how inventory moves in and out of the warehouse. Look at the peaks and troughs, apply statistics and use algorithms to determine reasonable goals.
Track picker productivity. Knowing productivity levels enables the warehouse manager to design shifts according to how the work can best be split up. Look at the average picks per person-hour, as well as the inverse, average person-hours per pick. The average work per order is then the average number of pick lines per order times the average person-hours per pick.
Measure and improve total order cycle time or internal order cycle time. Order picking is a big part of the calculation of the total time it takes to process an order. Tracking this number provides a measure of picking efficiency.
Look at inventory count accuracy by location and pick location faults (such as stockouts/backorders). This indicates there isn’t a sufficient quantity at the designated location.
Measure fill rate (by line and orders) to compare items shipped that day to total items ordered that day. Fill rate is a good way to make sure warehouse operations are meeting customer demand and is typically calculated daily.
Measure order picking accuracy. Order picking accuracy is number three on the most important benchmarks for warehouses in 2020’s DC Measures benchmarking report. A low order picking accuracy points to a need for more efficient processes, better control standards, more in-depth training and more.
Don’t forget KPIs that measure employee productivity. These include dispatched lines picked per hour, dispatched lines per direct hours, dispatched lines per total distribution center (DC) hours, annual total DC hours/total DC cost and DC cost per total labor used.
Select no more than six benchmarks, targeting metrics that will help manage the warehouse more efficiently and compare the efficiency of multiple facilities.
Review your warehouse space every when you conduct your physical count. A fast-moving consumer goods warehouse will need to be updated at least every five years, as product ranges and consumer appetites and larger economic forces all change. Failing to evolve the design of the warehouse will hinder order picking strategies and improvements.
Practice cycle counting to eliminate SKU complexity and waste.
Techniques like ABC inventory analysis (of which there are different types) allow businesses to rank and organize SKUs and remove or move products that are clogging up their operations.
Look beyond ranking SKUs only by dollar volume, but also how each SKU consumes resources like labor and space. Rank SKUs by the number of times they were picked during a certain interval, profitability, or difficulty in manufacturing, for example.
Implement some lean principles. Conduct regular Gemba walks — spending time watching warehouse processes and really understanding how they’re completed — to identify inefficiencies in the facility. Businesses may also implement poka-yolk techniques, where they mistake-proof their operations and look for ways to avoid inadvertent errors. One example here is looking at how cross-docking may improve flow in the warehouse.
Warehouse Order Picking Tips
Once the warehouse staff knows where the company will focus its efforts, it can begin to implement the tips below to increase efficiency and accuracy and improve worker safety.
Store popular SKUs together. Pick density can be increased, at least locally, by storing the most popular SKUs together. Then, order pickers can make more picks in a small area, reducing the amount of space they need to cover and increasing productivity.
Pay close attention to product slotting. Slotting refers to the careful placement of individual cases within the warehouse, such that similar types of inventory are stored together. They can be grouped by physical size, items often ordered together, seasonality and more. By correctly slotting product, organizations can achieve as much as 30% savings in labor and also ensure better ergonomics in the warehouse, Supply Chain Secrets says. Slot according to volume and movement and revisit the strategy once or twice a year. A WMS can assist in identifying proper slotting strategies and there are many algorithms that can help here.
Batch single-line orders. Single-line orders are customer orders for only one item. For this reason, they won’t require sorting at the end of a pick path and you can gain efficiencies by having a picker get as many of them as possible in one trip.
Balance restocking and picking to ensure the items are there. Supply Chain Secrets says a rule of thumb is one re-stocker for every five pickers, but that it depends on the particular patterns of flow. Sometimes, warehouses make the mistake of only measuring products by sales revenue, when they should look at the movement of the product, factoring in volume and sales.
Make sure the right paperwork is associated with the right order. One-fifth of a warehouse selector’s time goes to making sure paperwork is correct, per Georgia Tech. This can be greatly eased by implementing RF scanners, which automate the process as well as ensure accuracy by printing the packing slip for the order.
Structure pick lists for efficient packing. Think about how the items will best fit in the box they’ll be shipped in. A WMS can sequence picks in a pick list so that large items are picked first, for example.
Maximize hit density. One way to do this is to increase the density of picks, minimizing the distance between picks to increase the number of picks per spot and in turn increasing productivity.
Don’t mix multiples SKUs in the same bin locations. Many warehouses still have a bin location that is tied only to a shelf level holding as many as ten different SKUs. That requires the employee to search through multiple products for the correct item.
Try to minimize touches of the goods. In most warehouses, seven to eight people from inbound to outbound to warehouse management touch an item, but best-in-class companies will have as few as three-to-four touches. One way to minimize touches is for selectors to pick items and put them directly into the shipping box, not plastic bins on a cart.
Integrate weight measurements with WMS. Companies that ship large and heavy items can boost order picking accuracy by tying information about the item’s weight to the pick list. If the pick is, for instance, one unit short, the system will automatically notify the worker that the weight is too low and instruct them to add one more unit.
Pick from floor stack. One product slotting strategy is to let selectors pick high-turn items from cartons on pallets on the floor by using a pallet truck or pallet jack. This can be more efficient than keeping these fast-selling items on high-pallet racks.
People should pick using horizontal carousels instead of vertical lifts. Multiple benchmarking efforts over the years have demonstrated it costs more to pick vertically than horizontally. But warehouse capacity utilization demands that things are stored vertically as well. Have the slowest-velocity items picked from vertical storage and keep high-velocity items at floor level.
Pick from a forward- or fast-pick area. Businesses are designing areas of their warehouse to house popular SKUs that sit on the ground level and are replenished by stock from other areas of the DC. Georgia Tech says the most common forward-pick area is the ground floor pallet rack that is restocked by moving pallets down from higher levels. Other examples are a carton flow rack restocked from bulk storage, or specialized equipment like a carousel or A-frame that is stocked from somewhere else.
Taking steps to train and take care of the people who work in the warehouse are another critical part of ensuring efficient, accurate and cost-effective order picking.
Make sure the reasoning behind the warehouse management strategy and why it’s important to the business is understood by all warehouse staff, not just managers. A great example of why this matters comes from SI Systems, which points out that when many companies implement double-barcode verification, where the operator scans the product SKU and then the pallet, to improve accuracy. However, the operator often double scans the pallet instead because it’s faster. The employee does this because they want to meet productivity or throughput levels and don’t realize why scanning both is crucial to inventory accuracy. You should conduct a formal training process with team members and explain the business justification for each part of a process.
Use real metrics to set realistic performance standards for warehouse workers. Use metrics like order lines picked per hour and cost of picking for each order line and seek to improve them by giving selectors the right technologies that will facilitate increased efficiency and accuracy, such as pick-to-light and pick-to-voice.
Foster cooperation. A quality dashboard or control center can help monitor overall warehouse performance to reward and courage teams, but look to highlight individual employee gains as well. Display stats of high performers and incentivize for strong productivity and safety performance.
Work to reduce overtime. Compare overall hours to output and look at order lines picked per labor hour, for instance, to gauge labor efficiency. Factor in normal hours worked versus overtime hours, lines picked per day and number of cartons, eaches or pallets picked per period. Compare this period over period. If these numbers are low, but overtime is high, find out why.
Take steps to make the workplace safer and in compliance with OSHA standards. The best warehouse operations have formal safety training programs and ongoing training. Put products in the so-called “golden zone” to ensure proper ergonomic health. Clearly mark aisles and work areas with safety markers and keep them free of debris and hazards. Ensure all appropriate PPE is worn by warehouse workers at all times, including hard hats, eyewear, gloves, masks, proper uniforms and more.
Review and refine processes regularly. As product strategies shift, make sure the warehouse strategy does as well. Supply chain challenges and efforts to increase supply chain resilience will challenge many of the principles of just-in-time inventory management that have guided warehouse operations for years. In many cases, more space will be needed and stock may be held for longer periods of time to be ready for surges and shortages. Indeed, demand for warehouse space is high — The Wall Street Journal reported that industrial real-estate activity increased 43% from April to May 2020, with demand for warehouses of more than 100,000 square feet being strongest.
Optimize Order Picking With Warehouse Management Software
Think of the customer order like a shopping list for the picker to fulfill, with each entry on the list (known as order lines) noting the item and the quantity. Ideally, a warehouse management system is in place to check available inventory and where to find it, as well as reorganize orders into a pick list that factors in the layout of the warehouse to boost speed. The number of pick lines can be an indication of how much the worker will have to travel around the warehouse to get the items needed for the orders.
Businesses can turn to warehouse management systems (WMS) to help manage the inbound and outbound processes of their warehouses and gain visibility into all stocked SKUs and their location. WMS functionality builds on that of an inventory management solution, and also has capabilities to help with storage strategy and workforce management. The WMS provides details on all items in the warehouse — physical dimensions, how it’s packed, where it’s stored and the most efficient path to get to them.
A WMS supports appointment scheduling, receiving, quality assurance, putaway, location tracking, work order management, picking, packing and consolidation and shipping. The WMS transforms a customer order into a pick list and tracks order assembly. The WMS can also manage inbound processes in a warehouse, showing where inventory should be stored, tracking worker productivity, ensuring orders meet shipping schedules and more. It can also connect to the order management and ERP systems. Specifically, for the picking function, a robust WMS can support pick-to-light, RF-directed operations, labor planning, SKU slotting and much more.
The right WMS will scale as new functionality is needed and adapt as processes change. While the building itself may stay static, a business’s processes and technologies should not be set in stone. By constantly looking at the systems and how people use them to accomplish their work, warehouse management can constantly be improved, helping employees do their jobs more effectively and making sure that customers continue to buy from and trust your business.