Order picking is one of the most critical areas of the supply chain, and inefficiencies in this area can hit the bottom line hard. Let’s take a look at how efficient order picking can boost warehousing functions.
Every customer is in need of quick delivery. So much so that a study published by Website Magazine on the impact of late and inaccurate deliveries on customer loyalty revealed that 69% of the surveyed customers are less likely to shop with the same retailer if their order is not received within 2 days of the promised delivery date. Since active planning and speed are essential for hassle-free order fulfilment, every warehouse activity should be strategized and automated, especially the picking methods.
Warehouses have evolved from being just a storehouse for stockpiling goods. Modern warehouses are pretty complex and an important part of the entire supply chain. An ideal warehouse management needs to balance several factors like training, automation, software, and the constituent processes, including picking, receiving, and inventory management.
Comprehensive statistics show how implementing cutting-edge technologies can improve order picking procedures
Technological innovations like WMS and mobile technology have resulted in enhancing the quality of order picking across distribution centers. Typically, the manual order picking rate is 60-80 picks per hour. However, using cutting-edge technology and automation has resulted in multiplying these rates by a significant extent.
A particular warehousing solutions provider reported that picking rates were doubled, and picking efficiency went up to 99.9% for a specific third-party logistics provider when they implemented automation. Another global home goods retailer reported increasing order picking rates by 62% after implementing collaborative mobile robot technology.
These statistics prove that the order picking efficiency can be amplified to a great extent after implementing such avant-garde technologies. And this directly affects the best practices of warehousing. A positive impact on the overall warehousing productivity can be noted.
The standard order picking goals
Although we all know that the ulterior motive of order picking is order fulfillment, modern warehouse managers strive to achieve some typical internal order picking objectives. These objectives optimize the picking process and streamline the overall functions while safeguarding the health of the employees. They also have a significant influence on employee productivity and efficiency.
However, all these objectives have a cumulative impact on improving the overall profitability of a warehouse. Let’s look at these goals from a macro point of view.
Maximizing the use of space
Picking efficiency improves significantly with an optimized warehouse layout design. The warehouse flow should be mapped out in detail and should be specific throughout the warehouse.
Minimizing travel distance
Since an order picker spends almost half of their time traveling from one item to the next, advanced WMS strive to minimize the time required by providing picking path optimization algorithms. These algorithms improve the walking path of the order pickers.
Such innovative technologies help the order picker cut down their time while moving from one item to the next and rely on the warehouse layout. So, a well-organized warehouse design is a must.
Minimizing picking errors
'To err is human' is a universal truth, and this is highly implied when it comes to picking inside the warehouse. However, if manual picking errors on the front end are minimized, the order pickers won’t waste more time putting the items on the shelves when the customers return them.
Reverse logistics have become highly essential in improving the bottom line of the supply chain while scoring brownie points for sustainability. According to a report by Logicwa, which provides fully integrated and cloud-backed WMS solutions, returns in the USA reached nearly USD 550 million in 2020.
This proves that the order return process can be very costly. As a result, when streamlined technological solutions are used, they minimize the labor, cost, and errors associated with such operations.
The picking process is inherently related to the occurrence of MSD - musculoskeletal disorders. An insightful report published by Taylor and Francis shows that 33% of the work-related injuries in 2013 were MSDs. The highest number of MSDs occurred to warehouse employees that year.
Injuries have a substantial impact on warehousing operations. They result in ‘workforce churn.’ When there are fewer employees present, the entire workflow of the distribution center gets hampered. It would directly affect the productivity of the warehouse and reduce profitability.
The most common order picking methods
Order picking accounts for 60% of the operational cost of a warehouse. Therefore, the most cost-effective order picking strategies should be employed to score high for maintaining a healthy financial bottom line. The most common order picking methods are:
- Pick to order
- Batch picking
- Zone picking
- Wave picking
- Cluster picking
Warehouse managers should compare these methods and employ the ones that suit their goals the best.
How does order picking impact warehouse profitability?
We have already found out how the order pickers’ speed and performance keep the warehouse on track for order fulfilment. On the other hand, a shortfall of the same can put kinks in the warehousing schedules.
The efficiency of the order pickers’ work affects customer satisfaction as well. No one would like to receive the wrong product or too few of what they ordered. A small study on 500 customers revealed that 54% returned the products because the seller sent the wrong item. Hence, increasing the efficiency of order picking will indeed improve customer retention for a retail or ecommerce business.
Online purchases have a return rate of about 20%. Although streamlined reverse logistics processes are quintessential for stabilizing the economic, social, and environmental growth, implementing suitable technological solutions won’t stretch the RL processes much.
To keep the profit margins healthy, improving order picking efficiency, speed, and overall performance is vital. It directly impacts the warehouse profitability while creating an indirect impact on other areas of your business.
Warehouses are on an ongoing mission to optimize workflows, reduce wastage of time and resources and automate processes to derive the maximum value. Advances in logistics technology and the implementation of AI and machine learning tools in sophisticated WMS seek to improve order picking methods to drive a more excellent value to warehousing operations.