Ecommerce Operations

Warehouse Order Picking Systems: Everything You Need to Know

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Choosing an order picking system can make or break your warehouse process.

Get it right and you’ll make faster deliveries with fewer errors and happier customers. But the wrong one can see your entire operation fall into chaos.

And consider this:

Research for our Picking & Packing ebook revealed that 70% of labour time when processing customer orders is taken up by just picking the products.

Meaning even small inefficiencies can create huge lags in productivity.

That’s why we created this post covering everything you need to know about warehouse order picking systems.

We go into improving picking productivity, how to choose the best warehouse picking process for you as well as measuring its success.

SEE ALSO: How to Skyrocket Customer Retention with a Perfect Order Management Process

Improve picking productivity

Before going into the specific order picking systems, let’s look at a few general ways to improve productivity within this area.

There’s a few things to make sure of, regardless of the system you choose:

1) Give each SKU its own bin location

Breaking your warehouse down into clearly labelled areas, rows, shelves and sub-locations is essential. And makes it so much easier for your team to locate items quickly:

having a clearly labelled warehouse area, row, box, pallet or case for specific goods maximises supply chain efficiency

But mixing multiple SKUs in the same bin or sub-location will:

  • Waste time;
  • and cause massive confusion.

Imagine a picker going to a bin location and having to manually decipher between two colours. Or several sizes. Or any other slight variation.

It’s going to result in errors and time wasted when processing multiple orders each day.

Giving each and every SKU its own dedicated bin location means pickers can head straight there and just pick correctly.

storage in dedicated bin locations helps reduce material handling errors for maximum supply chain efficiency

2) Minimise walking time

According to research for our Picking & Packing ebook:

A picker will spend 60% of their time simply walking around the warehouse between picks.

This is a whole lot of what could be seen as ‘dead time’. And so any reduction in this can have huge pay-offs.

Some larger retailers will invest in conveyor systems that severely reduce the amount of walking needed:

full box or pallet conveyor systems reduces walking work for order pickers and improves warehouse logistics processes

But if you:

  • Batch picks together in an appropriate order picking system (discussed below).
  • Organise the picks so they are completed via the most efficient warehouse route.
  • Have clear pathways and directions for getting to each location.

Then you’ll create a huge, positive impact on the amount of walking each picker does.

Note: A quality Warehouse Management System will help do all this for you.

3) Arrange your warehouse optimally

Here’s one final statistic from our Picking & Packing ebook:

Most retailers generate 60% of their sales from just 20% of their product catalogue. Meaning there’s usually a sub-set of products that create the bulk of a business’s orders.

In other words:

Certain products need to be picked much more often than others. And so it makes sense to store these as close to the packing desk as possible.

You can use something like ABC Analysis to categorise inventory by sales frequency. And then arrange your warehouse accordingly:

distribution of items with a warehouse design based on abc analysis helps improve logistics processes

It might even be worth storing the very best selling items within shelves above the packing desk itself for super simple access.

Warehouse order picking systems

Choosing the right order picking system for your warehouse is totally dependent on your individual business needs.

There are four main picking methods commonly used in retail warehouses:

1) Single order picking

This is the most simplified and basic picking process. And the one typically used by those just starting out.

The concept is very straightforward:

A picker will pick one order at a time in its entirety before moving on to the next.

warehouse order picking systems: single order handling solution for a small business operator

Best for: Retailers just starting out who aren’t yet big enough to gain the benefits of more complex picking methods.

Avoid if: You ship more than 20 customer orders a day (or plan to in the near future).

2) Batch picking

Batch picking is still pretty simple. Yet much more efficient – providing you align with the general warehouse picking productivity guidelines above.

Here’s how it works:

  1. Each picker is assigned a batch consisting of multiple orders.
  2. They move into the warehouse and pick all these orders in one go.
  3. Return all items to the packing desk.
  4. And receive a new batch to repeat the process with.
Warehouse order picking systems: batch picking gives pickers a list of multiple orders to pick

The number of orders allocated to each batch is generally between 10 and 30.

But this really depends on the physical size of your products and average order size. It may even be worth considering setting batch sizes by total number of items, rather than number of orders.

Best for: High number of orders with single or low number of products per order.

Avoid if: You have a high number of products per order (or are aiming for this in the near future).

3) Zone picking

Zone picking is where these order picking systems start getting a little more advanced.

In this scenario:

  1. All pickers are each assigned their own area (or zone) of the warehouse.
  2. They then only pick products stored in that specific zone.
  3. An order is passed through all areas to have any required items added to it by pickers in that zone.
  4. After passing through all warehouse picking zones, the order is passed to the packing desk to be completed.
Warehouse order picking systems: zone picking solution

This warehouse picking system is great for preventing multiple pickers getting in each other’s way when dealing with high volumes of orders.

But it can also create a slight delay in shipping as each order needs to be passed between zones before being ready.

Best for: Retailers typically shipping a high volume of multiple item orders.

Avoid if: You typically ship single or low item orders or have very few pickers.

4) Wave picking

The final one of the main warehouse order picking systems is wave picking.

This is similar to zone picking – except all zones are picked at the same time.

Here’s how:

  1. Again, all pickers are given their own specified warehouse zones to pick from.
  2. An order picker would pick all relevant items in an order from their zone.
  3. Then return to a central packing desk.
  4. A dedicated packer would then consolidate all the separate picks into one order.
Warehouse order picking systems: wave picking distribution design

Wave picking has the same benefits as zone when it comes to dealing with high volumes of multiple item orders. And without the shipping delays.

But:

Labour costs increase due to the packer needing to spend more time combining orders at the end before needing to be shipped.

Best for: Retailers typically shipping a high volume of multiple item orders and still wanting to maintain a super-fast process.

Avoid if: You typically ship single or low item orders, have very few pickers or cost is more important than speed of dispatch.

There’s a lot of information to take in on order picking systems. So here’s a quick summary slideshow of these four main warehouse picking methods:

Automated warehouse picking systems

As with most things nowadays, technology has given us some excellent options for automated warehouse picking.

Here’s some to consider:

1) Pick to light system

A pick to light system involves a barcode scanner and light setup.

Your order picker would scan a barcode and then be guided to the correct area of the warehouse via the illumination of LED lights.

Basically:

Pickers can just scan a barcode and then follow the lights:

pick to light automated storage warehouse picking

However, a negative against pick to light is that it can get overwhelming for larger operations dealing with high volume orders with expansive product catalogues.

2) Voice picking system

Voice technology is coming into various areas of retail – and warehouse picking is no exception.

Pickers would wear a headset in order to receive instructions on what to pick and where to go. They can then verbally confirm completion of a pick back to the voice picking system via microphone.

Of course, this leaves pickers with:

  • Both hands free to use solely on actual picking.
  • And no physical paperwork that needs to be dealt with.
SEE ALSO: How to Use Voice Commerce & Voice Search to Crank Up Your Retail Sales

3) Mobile scanner-based picking

Equipping your warehouse and inventory with unique barcodes and picking via a quality mobile scanner is another great option.

veeqo scanner operator picks using full automated storage

This gives your pickers:

  • A list of orders to be picked exclusively by them.
  • An optimised walking route to pick all orders.
  • Scan and confirm for near-perfect picking accuracy.
  • An all-round much quicker pick than average.

And the scanner can even be used to confirm accuracy during the packing process as well as numerous other Warehouse Management System tasks too.

Measuring order picking success

Once you’ve settling on an order picking system, it’s essential to keep track of how well its performing.

There are two main things that matter here:

  1. Accuracy;
  2. and speed.

And in that order. There’s no point being lightning quick if customers continually get missing or incorrect items.

Here are a few warehouse KPIs to track when it comes to picking:

1) Rate of return

Rate of return puts a figure on how often items are being returned by customers.

Of course:

There are a number of things that can cause a customer to return an order – many of which are totally out of the control of your order pickers.

That’s why it’s important to segment this KPI into the different reasons for a return.

Anything being returned due to incorrect or missing items would typically then fall squarely into the responsibility of order pickers.

Determine your different return reasons and use the following following equation to analyse each one:

Rate of Return can show returns for poor picking or material handling work

2) Picking accuracy

You can then actually use your segmented rate of return data to come up with a specific picking accuracy KPI.

All you need is your total number of orders in a period and number of incorrect item returns in that same period.

Then put into the following equation:

Picking Accuracy KPI helps highlight each case of inaccurate picking

3) Average order processing time

Obviously, order processing time isn’t fully down to pickers. There’s a whole lot more involved in the processing of an order than just picking.

But let’s go back to our earlier statistic that 70% of labour time when processing orders is taken up by picking.

With this in mind:

Average order processing time should give a rough indication on how quickly your pickers are operating. And keeping track of this on a month-by-month basis can be a key insight.

Simply:

  1. Record the time it takes from processing each order from start to finish;
  2. then divide by total number of orders processed.

Veeqo even records everything for you and displays right on your Dashboard for easy access:

Ave order processing time screenshot

In summary:

Order picking can become more complex process the more your business grows. But it’s absolutely essential to get as near to perfect as possible.

Customer satisfaction and your reputation and reviews count on it.

Settling on one of these order picking systems is vital. But combining with some form of barcoded automated system is how you’re going to take your picking (and retail operation as a whole) to the next level.

Do you use any of these warehouse picking systems now? Or have any of them not worked for your business? Let us know in the comments below.

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Written by Mike Glover

Content Editor at Veeqo
Content Editor at Veeqo. Born in Wales, living in Edinburgh. Addicted to Breaking Bad, cricket and coffee.

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