PICKING AND PACKING STRATEGIES FOR FULFILLMENT SERVICE PROVIDERS - The Way Fulfillment Works
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PICKING AND PACKING STRATEGIES
FOR FULFILLMENT SERVICE PROVIDERS
The Way Fulfillment Works
TABLE OF CONTENTS
PICKING PACKING ADDITIONAL
CONSIDERATIONS
Individual Orders Order/Product FIFO Picking
Validation
Forward Picking Lot & Version Tracked
Tracking Package Items
Pick from Warehouse Contents
Produce On Demand
Wave Picking Record Packing Inventory
Materials
Batch Picking
Audit Trail
Pick to Cart
Integrated Shipping
Wireless Pick to Cart
INTRODUCTION
Picking and packing are two of the most significant processes for fulfillment service providers. Both
are labor intensive (i.e.: costly) and require a high degree of accuracy. The ability to maximize pick and
pack throughput while minimizing error rates ensures customer satisfaction and profitability for your
business.
Common requirements that drive picking and packing strategies include:
• High Volume
• High Value
• Customer Mandated Quality Control
• International Shipping
• Shipping to Retailers (EDI Compliance)
KEY FEATURES IN VERACORE PICKING
Successful fulfillment providers may use a particular picking strategy to meet contractual Service
Level Agreements. We’ll review some of the most commonly used strategies:
• Individual Orders
• Forward Picking
• Pick from Warehouse
• Wave Picking
• Batch Picking
• Pick to Cart
• Wireless Pick to Cart
1 | Pick and Pack Strategies
PICKING INDIVIDUAL ORDERS
Individual order picking is typically used if a client’s order volumes are not very high. This approach
can reduce the likelihood of picking errors because the picker is focused on picking items for only one
order.
Picking is typically directed by a picking slip, which includes all information needed to pick the order.
Picking slips can include barcodes that are scanned to confirm that the items have been successfully
picked.
A warning message is generated if the picker scans the barcode of an item that isn’t associated with
the order. Downstream processes, such as packing or shipping, can be initiated by scanning the
barcode on the picking slip.
EXAMPLE
A client sells cell phone cases and receives 2-3 orders per day. A new order comes in and a picking slip is
printed. The picker takes the picking slip and goes the warehouse location indicated on the slip. He picks the
cell phone case and scans the barcode to confirm that it was successfully picked.
FORWARD PICKING (AKA QUICK PICK, PICKING FROM
STAGING)
Forward picking is typically reserved for fast-moving items that are picked daily. It requires select
items to be kept in an accessible area of the warehouse in order to minimize the distance that a picker
needs to travel to reach the item.
Sufficient inventory levels must be maintained in forward picking locations. These areas are typically
stocked with enough inventory to last a single shift or longer.
2 | Pick and Pack Strategies
A forward picking strategy requires your fulfillment system to support certain capabilities, including
the ability to:
• Track inventory levels in the forward picking location
• Track inventory levels in bulk storage locations
• Determine a low stock or replenish point
When the low stock quantity is reached, VeraCore will alert the user to re-stock to a designated target
quantity. Because replenish and target quantities vary based on the item, the system allows the user
to define these parameters on an item by item basis.
If items reach their replenish points while orders are being filled, VeraCore can direct replenishment
immediately. In other cases, the manager may wish to pick from staging until all inventory is
depleted, and then pick from the bulk location. Replenishment can be performed during an off-peak
time, such as a second or third shift.
Forward picking would not be effective when an order requires an unusually large quantity of items
that would wipe out the entire inventory in the forward picking area. VeraCore allows the user to
define the maximum quantity of an item that can be pulled from forward picking for a single order.
Orders with a quantity above this amount are picked from the bulk location.
EXAMPLE
Packages of coffee and tea are determined as high-volume items. The warehouse fulfills 300 of each item in a
typical shift. 350 of each item are stored in a forward picking area so they are easily accessible. At the end of
the shift, the inventory in the forward picking area is replenished.
3 | Pick and Pack Strategies
PICKING DIRECTLY FROM THE WAREHOUSE
Picking materials from the warehouse is generally not as efficient as forward picking, but steps can be
taken to minimize the time spent picking, and therefore cost, if the right software system is used.
One way to accomplish this is through walk-sequence picking. VeraCore can be set up to locate where
every item is stored in the warehouse. If a picker is pulling multiple items, the system will direct their
picking in an orderly, walk-sequence path through the facility to minimize wasted foot traffic.
In some cases, a single SKU may be stored in several different warehouse locations and in varying
quantities. Efficiency can be increased if the fulfillment system can direct the user to pull from the
locations with the smallest quantity of inventory, but which satisfies the entire request for each SKU.
EXAMPLE
Several orders have come in. Inventory for these orders are located in aisles 1, 3, and 4. The picker moves
through the warehouse in walk-squence. He begins at aisle 1, then moves to aisle 3, then 4 until all items have
been picked (see diagram below).
START
FINISH
4 | Pick and Pack StrategiesWAVE PICKING
Wave picking is used when clients have diverse needs, varying types of inventory, and different order
profiles. To manage the varying picking activities, orders are organized into groups or “waves” based
specified criteria.
Waves can be grouped by:
• Client
• Priority of the order
• Requested shipment method
• Number of line items
• Product type (e.g., perishable, valuable, bulky)
Wave picking allows a user to a) define the criteria that will be used to group orders, and b)
automatically route each order to the appropriate wave. Waves control when orders are released for
picking, which version of the picking slip will be used, which printer(s) the forms will be printed on,
and which approach will be used for picking and packing.
EXAMPLE
A warehouse fulfills orders for a wide variety of clients, with products ranging from apparel to sporting
equipment. The warehouse manager has organized their waves by client. VeraCore automatically sorts
incoming orders into waves. The apparel is routed to wave 1 and the sporting equipment is routed to wave 2.
Wave 1 is released to pick every hour, and a picking slip is sent to a printer in the section of the warehouse
where apparel is stored. This wave uses a wireless pick to cart strategy, so the picking slip that is printed will
reflect this strategy.
Wave 2 is released to pick at the end of the day and goes to a printer where sporting equipment is stored. This
wave uses an individual order picking method, so the picking slip reflecting this strategy will be used.
5 | Pick and Pack StrategiesBATCH PICKING
Batch picking minimizes repeated trips to the same warehouse location, which lowers the cost per
pick. When a group of picking slips is generated using this technique, VeraCore will also generate a
“master” picking document. This enables the picker to simultaneously pick all items for the group of
orders. When all items have been picked, they are brought to the packing area where individual orders
are separated and packed into outgoing containers.
The parameters used for batching are typically controlled by the order’s picking wave. Additional
criteria may be used to create a subset of batches for a given picking wave. For example, managers
need to be able to control minimum and maximum batch sizes, so workers are not sent on picking
runs too frequently or directed to pick a batch that is too large to handle in one run.
Additional criteria that may be used for batching is based on:
• Client
• Project or job
• Shipping carrier
• Number of line items
• Identical bill of materials (BOM)
Batching orders on identical bill of materials is a technique that is typically used for high volume
clients. When processing a large group of orders, VeraCore groups identical orders together in
batches. Because the orders in a given batch are identical, the result is an extremely efficient and
accurate picking and packing process. Grouping identical orders in this way can also facilitate an
expedited shipping process.
EXAMPLE
A customer sells high volumes of t-shirts. Orders for these items are grouped together, and the picker makes a
single trip to the warehouse location where the inventory is stored, picking all orders at the same time.
6 | Pick and Pack StrategiesPICK TO CART
Pick to cart is a hybrid of the batch picking and individual order picking. VeraCore releases orders in
batches small enough to fit on a mobile picking cart. When a batch of orders is processed, a master
picking sheet is printed, as well as an individual packing slip for each order. The master picking sheet
directs the picker, in walk-sequence, to pull all items for the batch and indicates the SKU and the
quantity for each packing slip.
As each item is pulled, the picker simply reviews the master picking sheet and places the items on the
cart with the appropriate pack slip. In some cases, items are placed directly into the container that
they will be shipped in.
When the picking run is complete, orders are ready for final packing and shipping.
EXAMPLE
The warehouse receives 15 orders for a variety of office supplies. VeraCore groups these orders together, and
both a master picking sheet and individual packing slip are printed. The picker places individual packing slips
into separate totes on a cart. He uses the master picking sheet to pick the orders in walk-sequence. As he picks
each item, he places them in the tote with the corresponding packing slip.
7 | Pick and Pack StrategiesWIRELESS PICK TO CART
Similar to pick to cart batching, this approach enables users to pick items as they push a cart
containing totes through the warehouse. However, in this case, a hand-held wireless device directs the
user through the warehouse in walk-sequence.
When they arrive at a required item, the device tells them how many to pull and which picking tote to
place the item in. The picker scans a product barcode to confirm that they are pulling the right item
and then scans a tote ID barcode to confirm they have placed the product in the correct tote. Once all
items for the batch have been pulled, the totes are delivered to the packing area.
EXAMPLE
As with the pick to cart example, the warehouse receives 15 orders for a variety office supplies. The picker
uses a wireless device to guide him through the warehouse in walk-sequence. He arrives at the first item that
needs to be picked. The wireless device tells him to pick 1 of this item and place it into tote #3. The picker scans
the item’s barcode and then scans the barcode on tote #3 to confirm that the product is in the correct tote. He
continues this process until all items are picked.
8 | Pick and Pack StrategiesKEY FEATURES IN VERACORE PACKING
There are several different factors to consider when packing an order. We’ll take a look at the most
common.
• Order/Product Validation
• Tracking Package Contents
• Recording Packing Materials for Billing
• Audit Trail
• Integrated Shipping
ORDER/PRODUCT VALIDATION
Packing for order/product validation builds quality control into the process by making sure that the
right products are being packed to the right order. There are two primary ways this can be accom-
plished through VeraCore.
• Point and Click/Touch Confirmation - Details of an order are captured using a computer or
touch-screen device.
• Barcode-Driven Packing - Details of an order are captured by scanning a pick slip and UPC
label(s).
EXAMPLE
An order is picked and brought to the packing station. The packer scans the pick slip barcode, scans the UPC for
each item, and packs the items. One of the items picked isn’t associated with this order, so an audible tone will
sound to indicate failure.
9 | Pick and Pack StrategiesTRACKING PACKAGE CONTENTS You may need to track shipments with content-level detail. This is especially useful when working with international and multi-package orders. Because of customs requirements on international orders, you’ll need to track what’s inside of each package shipping outside of the country. VeraCore simplifies this process by allowing you to track what’s included in each package, along with tracking details. Similarly, you may need to track the contents of each package for orders which include multiple packages. If part of the shipment gets lost or delayed, you can easily determine exactly what was in the box. EXAMPLE An order has been picked and has been brought to the packing station. The item is packed and a package label is generated and placed on the package. The label is either scanned, or the number on the label is manually entered into your fulfillment system, along with the contents of the package. When the package moves down the line to shipping, the tracking number can be tied to the appropriate items. 10 | Pick and Pack Strategies
RECORDING PACKING MATERIALS FOR BILLING
If the cost of packing materials is charged back to your customers, knowing exactly what was used is
essential for billing. You may choose to bill for all materials used or bill only for non-standard
materials.
At the end of the billing cycle, VeraCore can calculate the amount of packing materials consumed by
each customer, and apply your specified charge to each package.
EXAMPLE
You bill your customers for packing materials but would like to give them a discount in order to keep your prices
competitive. In the fulfillment system, you’ll indicate their cost for each item packed. At the end of the billing
period, the system will calculate the amount to charge each customer for the packing materials they’ve used.
AUDIT TRAIL
Every transaction is time and date stamped in VeraCore, so you’ll have access to a complete audit trail
for orders that have left your facility. See which employees picked the materials for the order and,
when applicable, which employee packed the order.
EXAMPLE
A customer has received their bill at the end of the billing period and has disputed some of the charges. Luckily,
you have an audit trail in your fulfillment system and can easily supply detailed information on each activity
performed and justify each charge on their bill.
11 | Pick and Pack StrategiesINTEGRATED SHIPPING
Generate shipping labels directly from the fulfillment system at packing time. VeraCore has been
integrated with a variety of shipping systems, so you can streamline your shipping process. Generate
and print your shipping labels without ever leaving VeraCore.
EXAMPLE
An order is packed and weighed at the shipping workstation. A live shipping label is produced and printed
directly from the fulfillment system. The packer places the shipping label on the package and sends it on its way
to be shipped.
ADDITIONAL CONSIDERATIONS
FIFO PICKING
Picking logic may vary based on the type of product. In some cases, a client may wish to have their
materials picked on a FIFO (First In - First Out) basis. Older products are shipped first, minimizing
the possibility of sending materials that show fading or other signs that they have been on the shelf
for too long.
12 | Pick and Pack StrategiesLOT/VERSION TRACKING
Items that are lot tracked (ie: medicine, food products) or version tracked (ie: financial prospectus)
may need to be picked based on the lot/version level (ie: expiration date). In some cases, a lot or
version should stop being picked x number of days prior to the expiration.
VeraCore provides tools to manage the process and ensure that you never inadvertently ship an
incorrect lot or version.
Additional information on lot tracking can be found at: http://www.veracore.com/resources/fulfill-
ment-white-papers/version-tracking
PRODUCE ON DEMAND
Fulfillment orders often include items that are produced or assembled on demand. Examples include:
• Kits that are assembled on the fly
• Documents that are printed on demand (with or without personalization)
• Personalized items such as apparel or promotional products
A single order may include on-demand items and items that are pulled from the warehouse. With
orders like these, it is important for departments responsible for handling the various items to
coordinate. For example, kit assembly, digital printing, warehouse picking, etc. may need to work
together to fulfill a single order.
If an order contains both static inventory items and items that will be manufactured on demand, the
fulfillment manager may wish to wait to pick the inventoried items until the manufacturing is
complete, or they may prefer to begin picking immediately.
For example, a client’s orders typically include kits that are assembled on demand, brochures that will
be customized, and a small quantity of static inventory items which are stored in the warehouse. The
fulfillment manager may wish to focus initially on manufacturing the kits and brochures and begin
picking the static pieces only after the manufacturing is complete.
13 | Pick and Pack StrategiesConversely, when there are a large number of static items included in an order, it may make sense to
immediately begin picking these items while simultaneously manufacturing the on demand items.
VeraCore supports both approaches and allows the user to define business rules governing which
technique is applied.
CONCLUSION
Successful fulfillment service providers maximize operational efficiency within their picking and
packing processes without sacrificing order accuracy so critical to ensuring client satisfaction.
When and how a service provider employs different picking and packing techniques can vary widely
based on the layout of the facility, item size and velocity, order complexity, adoption of barcode
technology, and client specific requirements indicated in the Service Level Agreement. Because
fulfillment service providers typically service many clients with a wide range of needs, it is imperative
that the fulfillment system supports the use of multiple techniques.
The VeraCore Fulfillment Solution supports each of the approaches described. Fulfillment service
providers are able to determine which strategies are appropriate for their business, and under which
circumstances the techniques will be deployed in their operation.
To learn more, visit www.veracore.com
860-721-8929 veracore@veracore.com VeraCore.com
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