Warehouse Order Picking Best Practices (2024)

There are many inbound and outbound processes involved in moving and managing inventory thatmake up the discipline of warehouse management. Businesses often focus on outbound processesto increase customer satisfaction and reduce operational inefficiencies and costs.

But order picking is a crucial part of the outbound piece of warehouse management. Itconstitutes all of the steps involved in physically retrieving the items stored in thewarehouse 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 mostlabor-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, andspend less money on the associated steps. Warehouse order selectors typically take a picklist and travel to different spots in the warehouse to get the items, search for them on thewarehouse shelves, extract them and match paperwork to ensure order accuracy beforeshipping.

The most time-consuming part of the order picking process is traveling, which takes up 55% ofthe 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 SupplyChain and Logistics Institute. For this reason, much of the work around improving orderpicking processes is aimed at reducing unproductive travel time.

Achieving best-in-class order picking requires knowing where the products are, exactly howmany are available, knowing how many you need — so you aren’t picking for eachindividualorder one at a time — and ensuring they are strategically placed to facilitate quickpickingand processing for shipping.

So how can businesses minimize order picking time while ensuring accurate order fulfillment and employee safetyin 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, toolsandprocesses a business may employ to enhance order picking. The combination of strategies,best practices and technologies that your organization should adopt will depend on theindustry, 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 fourwalls will help a business select the proper processes, technologies and equipment toimprove order picking.

Warehouse Design Tips for Order Picking

Order picking excellence starts by choosing the right warehouse design and flow for yourbusiness processes strategy.

  1. Choose a warehouse type and flow. Warehouses are usually designed to movegoods in one of the layouts below (or some combination of them).

    1. U-shaped flow positions the receiving and dispatch docks at thesame side of the building, and products move in a U-shaped manner from receivingto dispatch. This design offers shared docking space and is typically best forsmall buildings.
    2. I-shaped flow put receiving on one end and dispatch at anotherend of the building so all goods move in a single direction. An I-shaped flow isgood for high-volume businesses, as well as those that need strong securitycontrol over goods entering and leaving the warehouse.
    3. L-shaped warehouse flow has inbound unloading on one end andoutbound shipping at a perpendicular angle to that area. This can makecross-docking — when items are taken off one truck and immediately loadedontoanother — easier. This is good for businesses that may never stockproducts onracks, sending out stock soon after bringing it in.
  2. Decide how product is organized within that flow. This could be what’s called atriadic warehouse design, which is broken into three zones — fast-moving,medium-moving and slow-moving product. In warehouses that don’t use thisdesign,product is not zoned. Many warehouses adopt a design in which they automate onesection with suitable items and still having people involved in picking items, tosome degree, in the other.

    1. Place fastest moving products closest to fulfillment so they’re easy topick.
    2. 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 orderchronologically withoutvisibility into the other orders in your queue — this leads to lots of time wastedtraversing the warehouse to retrieve the same item throughout the day.

  1. Operations with low order volume or that sell high-end or heavy products should lookto discrete, individual order pick, piece picking or picker-to-part. This is themost straightforward order picking method, in which one person picks the completeorder, walking through the warehouse, pulling all the necessary items and oftenconsolidating them in a container.

  2. For organizations that need to pick and pack multi-item orders quickly and have ahigh number of SKUs and picks per order, wave picking is a good choice. Picking isconducted in scheduled waves, and all zones are picked at the same time. The itemsare sorted downstream as they’re prepared for individual shipments. Wavepickingplaces like orders together based on pre-defined rules and releases them to befulfilled together so that pickers can pick for the entire wave at the same time.

  3. To increase picking efficiency, the workers can pick in batches where they pick formultiple 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 traveltime. The operator goes into the warehouse, picks the full quantity of itemsrequired and then allocates them to each individual order.

  4. For large warehouses with many SKUs, zone picking is often advantageous. Batchpicking may incorporate the zone picking method, in which a selector is charged withlooking after a certain area in the warehouse, getting all the items for their zoneand then passing the order on. For this reason, zone picking is also known as pickand pass. The items may move, for instance, along a conveyer belt until all requireditems are in the box.

  5. Innovative businesses are trying good-to-person setups and sorting systems toincrease the efficiency of the picking process. The warehouse selector stays in oneplace, and the products are brought to the selector by a conveyer, a robotic deviceor some other automated technology. Think of good-to-person as automating thediscrete picking process.

  6. Another way to reduce travel time is pick-to-box. Pick-to-box integrates moreautomation 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 heor 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 strategyfor the facility and the nature of the business. For instance, a business with a low numberof SKUs and fewer lines picked may employ an individual order pick method, and leveragepick-to-belt technology or pick from pallet. Businesses with a large number of SKUs thatmove 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:

  1. Align technology with the number of SKUs and volume. Look at the number of linesbeing processed per day versus the number of products. In general, the higher thenumber of SKUs and number of lines, the greater the need for automation.

  2. Start by implementing a warehousemanagement system (WMS). Even the simplest warehouse operations need someform of a warehouse management system. Look for basic order picking functionality tostore and track SKUs and item location and automate the creation of pick lists fromcustomer orders. A WMS will check a customer order against available inventory andprovide instructions in the form of a pick list. It takes into account the layout ofthe warehouse, available labor and the location of the equipment to maximizeefficiency and ensure accuracy in order picking.

  3. 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 pickpath (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 thetechnologies used on the floor can easily talk with the WMS so you don’tintroduceunnecessary complexity.

  4. Make sure the WMS is integrated with the ERP system. Tracking movement and goods in thewarehouse provides a wealth of valuable data for other departments, such aspurchasing or customer service. Make sure these other functions have access to thesame data within the software they use for their jobs.

  5. Select the right materials handling system and adjust the systems as SKUs and volumeincrease. An increase in the number of SKUs requires much more logistics in thewarehouse. With low SKUs and low volume, a simple materials handling system likeforklifts may do, but as volume and complexity increase, the business will need moremechanization. Materials handling equipment is an innovative space that leveragesmany innovative ideas and technologies.

  6. Consider advances in equipment to enable narrow aisle configuration. Optimizing theavailable space in the warehouse provides advantages beyond storage — it canalsohelp reduce travel time in the order pick process. Conventional warehouse aisles are12-14 feet wide. Narrow aisles are typically 8-10 feet, but can be as little as sixfeet. Combining the right technologies and equipment, warehouses can achieve orderpicking gains with narrower aisles.

  7. Maximize warehouse space by using the right equipment. Lift truck technology isconstantly improving, and there are trucks capable of getting through narrow aislesand into tight spaces, such as the articulated forklift. Amazon leverages robotsthat resemble Roomba vacuums. These robots ferry the necessary items from shelves tothe picker and push them back into tight spots when all items are retrieved.

  8. Implement conveyer technology. There are dozens of types of conveyer technology thatcan be used for more efficient picking, as well as the ergonomic health of theemployees doing the work.

  9. Look at advancements in sorting technologies. Combined with conveyers, sortingtechnologies provide an accuracy and efficiency boost — producing shorter leadtimesand more accuracy.

  10. Find out what storage is right for the business and don’t overlook the benefitsofautomated technologies. A carousel, for instance, automates picking by means of ashelving unit that rotates along a track to bring the items to the picker. They canbe configured to the picking method chosen by the business.

  11. Understand all the automated picking technology options available. Some companieshave a lot of success with pick-to-light or pick-to-voice equipment. Withpick-to-light, pickers scan an order barcode and the item’s quantity andlocationlights up. Pick-to-voice guides the picker and provides confirmation through aheadset. Today, augmented reality technologies are enabling advancements such aspick-via-smart glasses, which display an item’s location and quantitydigitallythrough a wearable headset. They provide voice-guided instructions and the abilityto scan directly with the headset — freeing up the worker to use both handsandmaximize efficiency with fewer touches.

  12. Implement smart technologies. IoT technologies can help deliver real-time inventorycounts, while advancing wearables technology like smart glasses are making it easierto keep track of inventory movement and ensure that the right count is there tobegin with. This saves the picker time and the frustration of looking for items thataren’t there.

  13. 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 equippedwith sensors that keep them from bumping into people or shelves.

  14. Get to know co-bots. Co-bots can be useful to deploy for tasks that have somerepetition, but also require some level of human intervention. The co-bot can puttogether 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 thestrategies 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, thenselect the tips that make the most sense.

  1. Ask the people who work in the warehouse where the bottlenecks are. Don’tforget themany people who often support your processes, including office administrators,equipment operators and others.

  2. Don’t base order picking targets on averages. Seasonality and economic trendswillgreatly affect how inventory moves in and out of the warehouse. Look at the peaksand troughs, apply statistics and use algorithms to determine reasonable goals.

  3. Track picker productivity. Knowing productivity levels enables the warehouse managerto design shifts according to how the work can best be split up. Look at the averagepicks per person-hour, as well as the inverse, average person-hours per pick. Theaverage work per order is then the average number of pick lines per order times theaverage person-hours per pick.

  4. Measure and improve total order cycle time or internal order cycle time. Orderpicking is a big part of the calculation of the total time it takes to process anorder. Tracking this number provides a measure of picking efficiency.

  5. Look at inventory count accuracy by location and pick location faults (such asstockouts/backorders). This indicates there isn’t a sufficient quantity at thedesignated location.

  6. Measure fill rate (by line and orders) to compare items shipped that day to totalitems ordered that day. Fill rate is a good way to make sure warehouse operationsare meeting customer demand and is typically calculated daily.

  7. Measure order picking accuracy. Order picking accuracy is number three on the mostimportant benchmarks for warehouses in 2020’s DC Measures benchmarkingreport. A low order picking accuracy points to a need for more efficientprocesses, better control standards, more in-depth training and more.

  8. Don’t forget KPIs that measure employee productivity. These include dispatchedlinespicked per hour, dispatched lines per direct hours, dispatched lines per totaldistribution center (DC) hours, annual total DC hours/total DC cost and DC cost pertotal labor used.

  9. Select no more than six benchmarks, targeting metrics that will help manage thewarehouse more efficiently and compare the efficiency of multiple facilities.

  10. Review your warehouse space every when you conduct your physical count. A fast-movingconsumer goods warehouse will need to be updated at least every five years, asproduct ranges and consumer appetites and larger economic forces all change. Failingto evolve the design of the warehouse will hinder order picking strategies andimprovements.

  11. Practice cycle counting toeliminate SKU complexity and waste.

  12. Techniques like ABC inventoryanalysis (of which there are different types) allow businesses to rank andorganize SKUs and remove or move products that are clogging up their operations.

  13. Look beyond ranking SKUs only by dollar volume, but also how each SKU consumesresources like labor and space. Rank SKUs by the number of times they were pickedduring a certain interval, profitability, or difficulty in manufacturing, forexample.

  14. Implement some lean principles. Conduct regular Gembawalks — spending time watching warehouse processes and reallyunderstandinghow they’re completed — to identify inefficiencies in the facility.Businesses mayalso implement poka-yolk techniques, where they mistake-proof theiroperations and look for ways to avoid inadvertent errors. One example here islooking 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 toimplement the tips below to increase efficiency and accuracy and improve worker safety.

  1. Store popular SKUs together. Pick density can be increased, at least locally, bystoring the most popular SKUs together. Then, order pickers can make more picks in asmall area, reducing the amount of space they need to cover and increasingproductivity.

  2. Pay close attention to product slotting. Slotting refers to the careful placement ofindividual cases within the warehouse, such that similar types of inventory arestored together. They can be grouped by physical size, items often ordered together,seasonality and more. By correctly slotting product, organizations can achieve asmuch 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 thestrategy once or twice a year. A WMS can assist in identifying proper slottingstrategies and there are many algorithms that can help here.

  3. 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 youcangain efficiencies by having a picker get as many of them as possible in one trip.

  4. Balance restocking and picking to ensure the items are there. Supply Chain Secretssays a rule of thumb is one re-stocker for every five pickers, but that it dependson the particular patterns of flow. Sometimes, warehouses make the mistake of onlymeasuring products by sales revenue, when they should look at the movement of theproduct, factoring in volume and sales.

  5. Make sure the right paperwork is associated with the right order. One-fifth of awarehouse selector’s time goes to making sure paperwork is correct, perGeorgiaTech. This can be greatly eased by implementing RF scanners, which automate theprocess as well as ensure accuracy by printing the packing slip for the order.

  6. Structure pick lists for efficient packing. Think about how the items will best fitin the box they’ll be shipped in. A WMS can sequence picks in a pick list sothatlarge items are picked first, for example.

  7. 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 andin turn increasing productivity.

  8. Don’t mix multiples SKUs in the same bin locations. Many warehouses still havea binlocation 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.

  9. Try to minimize touches of the goods. In most warehouses, seven to eight people frominbound to outbound to warehouse management touch an item, but best-in-classcompanies will have as few as three-to-four touches. One way to minimize touches isfor selectors to pick items and put them directly into the shipping box, not plasticbins on a cart.

  10. Integrate weight measurements with WMS. Companies that ship large and heavy items canboost order picking accuracy by tying information about the item’s weight tothepick list. If the pick is, for instance, one unit short, the system willautomatically notify the worker that the weight is too low and instruct them to addone more unit.

  11. Pick from floor stack. One product slotting strategy is to let selectors pickhigh-turn items from cartons on pallets on the floor by using a pallet truck orpallet jack. This can be more efficient than keeping these fast-selling items onhigh-pallet racks.

  12. People should pick using horizontal carousels instead of vertical lifts. Multiplebenchmarking efforts over the years have demonstrated it costs more to pickvertically than horizontally. But warehouse capacity utilization demands that thingsare stored vertically as well. Have the slowest-velocity items picked from verticalstorage and keep high-velocity items at floor level.

  13. Pick from a forward- or fast-pick area. Businesses are designing areas of theirwarehouse to house popular SKUs that sit on the ground level and are replenished bystock from other areas of the DC. Georgia Tech says the most common forward-pickarea is the ground floor pallet rack that is restocked by moving pallets down fromhigher levels. Other examples are a carton flow rack restocked from bulk storage, orspecialized equipment like a carousel or A-frame that is stocked from somewhereelse.

Taking steps to train and take care of the people who work in the warehouse are anothercritical part of ensuring efficient, accurate and cost-effective order picking.

  1. Make sure the reasoning behind the warehouse management strategy and why it’simportant to the business is understood by all warehouse staff, not just managers. Agreat example of why this matters comes from SI Systems, which points out that whenmany companies implement double-barcodeverification, where the operator scans the product SKU and then the pallet,to improve accuracy. However, the operator often double scans the pallet insteadbecause it’s faster. The employee does this because they want to meetproductivityor throughput levels and don’t realize why scanning both is crucial toinventoryaccuracy. You should conduct a formal training process with team members and explainthe business justification for each part of a process.

  2. Use real metrics to set realistic performance standards for warehouse workers. Usemetrics like order lines picked per hour and cost of picking for each order line andseek to improve them by giving selectors the right technologies that will facilitateincreased efficiency and accuracy, such as pick-to-light and pick-to-voice.

  3. Foster cooperation. A quality dashboard or control center can help monitor overallwarehouse performance to reward and courage teams, but look to highlight individualemployee gains as well. Display stats of high performers and incentivize for strongproductivity and safety performance.

  4. Work to reduce overtime. Compare overall hours to output and look at order linespicked per labor hour, for instance, to gauge labor efficiency. Factor in normalhours worked versus overtime hours, lines picked per day and number of cartons,eaches or pallets picked per period. Compare this period over period. If thesenumbers are low, but overtime is high, find out why.

  5. Take steps to make the workplace safer and in compliance with OSHA standards. Thebest warehouse operations have formal safety training programs and ongoing training.Put products in the so-called “golden zone” to ensure proper ergonomichealth.Clearly mark aisles and work areas with safety markers and keep them free of debrisand hazards. Ensure all appropriate PPE is worn by warehouse workers at all times,including hard hats, eyewear, gloves, masks, proper uniforms and more.

  6. Review and refine processes regularly. As product strategies shift, make sure thewarehouse strategy does as well. Supply chain challenges and efforts to increasesupply chain resilience will challenge many of the principles of just-in-time inventory managementthat have guided warehouse operations for years. In many cases, more space will beneeded and stock may be held for longer periods of time to be ready for surges andshortages. Indeed, demand for warehouse space is high — The Wall StreetJournalreported that industrial real-estate activityincreased 43% from April to May 2020, with demand for warehouses of morethan 100,000 square feet being strongest.

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Optimize Order Picking With Warehouse Management Software

Think of the customer order like a shopping list for the picker to fulfill, with each entryon the list (known as order lines) noting the item and the quantity. Ideally, a warehousemanagement system is in place to check available inventory and where to find it, as well asreorganize orders into a pick list that factors in the layout of the warehouse to boostspeed. The number of pick lines can be an indication of how much the worker will have totravel around the warehouse to get the items needed for the orders.

Businesses can turn to warehouse management systems (WMS) tohelp manage the inbound and outbound processes of their warehouses and gain visibility intoall stocked SKUs and their location. WMS functionality builds on that of an inventory managementsolution, and also has capabilities to help with storage strategy and workforcemanagement. The WMS provides details on all items in the warehouse — physicaldimensions,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, locationtracking, work order management, picking, packing and consolidation and shipping. The WMStransforms a customer order into a pick list and tracks order assembly. The WMS can alsomanage inbound processes in a warehouse, showing where inventory should be stored, trackingworker productivity, ensuring orders meet shipping schedules and more. It can also connectto 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. Whilethe building itself may stay static, a business’s processes and technologies shouldnot beset in stone. By constantly looking at the systems and how people use them to accomplishtheir work, warehouse management can constantly be improved, helping employees do their jobsmore effectively and making sure that customers continue to buy from and trust yourbusiness.

Warehouse Order Picking Best Practices (2024)
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