How Efficient Order Picking Can Create More Profit

How Efficient Order Picking Can Create More Profit

how to turn keep inventory on efficient order picking

In the world of warehousing and eCommerce, time is measured in seconds, not minutes.

If you can shave even just 30 seconds off of a repeatable process, that translates to hundreds, thousands, or tens of thousands of dollars of revenue. 

One of those critical processes that all eCommerce or warehouse businesses have to deal with is order picking. 

The way you handle order picking in your warehouse can either make or break the efficiency and profitability of your operation.

In this post, we’ll go over the following:

  • What order picking is and why it’s so important
  • Why efficient order picking directly translates to more profits
  • How to choose the best order-picking methodology for your business

What is Order Picking?

Order picking is the process of gathering customer orders from inventory in a warehouse or distribution center.

This often involves selecting the right items in the right quantities and packaging them for delivery. It is a crucial part of the supply chain process, as it ensures that customers receive the right items at the right time.

It may seem odd to make a big deal out of order picking. After all, how hard can it be? 

An order comes in and you go get it. Simple.

And while it may be simple for a small boutique eCommerce business with a few SKUs, order picking gets very complicated, very quickly.

This is especially true once you start adding additional warehouses, multiple SKUs, and warehouse employees to the mix.

What happens when you upgrade your warehouse and you’re getting dozens of orders per minute across seven different SKUs, which are all spread throughout different areas in your storage space?

Admittedly, this is a pretty great problem to have.

But not having a good order-picking strategy in place can eat away at any potential gains earned from this influx of customers.

How does efficient order picking lead to higher profits?

Efficient order picking can help businesses increase profits in a number of ways.

Firstly, it helps reduce costs associated with inventory management, such as storage and shipping costs.

An efficient order picking method can significantly reduce the time and labor costs associated with fulfilling orders, allowing businesses to maximize their profits.

It also helps improve customer service and satisfaction by ensuring that orders are filled quickly and accurately. This can lead to increased customer loyalty, which in turn leads to higher sales volumes.

Finally, efficient order picking also allows businesses to reduce the amount of stock they need to keep on hand. This can lead to significant savings in inventory costs, which can also boost profits.

Order picking methodologies aren’t exactly the most exciting things in the world of business, and we’ll go out on a limb and say they’re probably not the reason you started an eCommerce operation in the first place.

However, order picking both directly and indirectly affects bottom-line revenue and, therefore, must be optimized.

What are the different types of order picking?

Due to the complexity of order picking in larger warehousing operations, industry leaders have developed a number of order-picking philosophies to minimize error and maximize warehouse efficiency.

The following are the most popular.

Single-piece order picking

Single-piece order picking is by far the simplest order picking methodology. It involves selecting each product individually and boxing it for shipping.

It is, however, the most labor-intensive process, as employees must find each individual item manually. However, it is very accurate and allows workers to select items from a wide variety of locations.

It’s also the best for smaller businesses or solopreneurs without any employees.

Wave order picking

Wave order picking is the most common order-picking method used by larger warehouses and distribution centers.

This involves grouping similar orders into “waves” that are then picked by a single warehouse employee or team of employees.

This allows the orders to be fulfilled quickly and accurately as they are all being worked on in parallel.

It takes a bit to wrap your head around wave picking, so here’s how it usually breaks down step-by-step.

  1. A manager receives customer orders.
  2. Those orders are then grouped into waves or “batches” based on certain criteria such as shipping method, arrival of delivery vehicles, or area within the warehouse.
  3. Once the wave-picking plan is accepted, it will be released (usually through a warehouse management system) to the warehouse staff.
  4. Each warehouse employee is assigned a particular function of that wave with the expectation that, with reasonable productivity, each staff member will complete their assigned function on time.
  5. The waves last anywhere between 1 and 4 hours, allowing around 2 to 8 waves per shift, depending on the day’s workload.

There are many benefits of wave picking, especially for larger warehouses. For one, it allows managers to intelligently plan their days and assign specific duties to employees.

It also helps measure the productivity of each staff member and function within each wave (pallet unloading, forklift operation, etc.).

Finally, it can help produce a more predictable end result since each wave has a designated start and end time.

Batch order picking

Batch order picking is similar to wave order picking in that it involves grouping orders together. But whereas wave picking can contain multiple orders or picking functions, batch picking typically only involves one order or SKU at a time.

It works best when the warehouse is dealing with large quantities of stock and requires little to no item sorting before order fulfillment.

This makes it great for warehouses that are heavily stocked in commodities such as building materials, medical supplies, and office products.

In this method, orders are grouped by similar size and weight.

Then, warehouse employees will begin to pick the items they need to fill each order according to the order’s batch sheet.

Once the picking is complete, those batches are packaged and shipped off accordingly.

Zone order picking

Zone picking is a method of order fulfillment where different parts of the warehouse are dedicated to particular SKUs or product categories.

The idea is that, by having dedicated areas for certain products, staff will be able to pick items more quickly and accurately than if they had to search the entire warehouse for each order.

Zone picking often involves the use of automated carts or vehicles which can quickly and easily move between different zones to pick the items needed for an order.

This helps speed up the process and ensure accuracy by minimizing human error.

Zone picking also allows warehouse managers to easily track inventory levels in each zone, ensuring that they stay well-stocked at all times.

It can also help optimize bin sizes for each zone, ensuring that space is used effectively.

Overall, zone picking is an efficient and accurate way to fulfill orders (especially for smaller warehouses) and ensure that customers get their items quickly.

Reverse order picking

Reverse order picking, also known as reverse-zone order picking, is a technique of order fulfillment in which warehouse staff picks orders from the “last touch” point to the shipping dock.

The orders are typically picked in a single pass, with all items being collected at once and then sorted by order item before finally reaching the shipping area.

This method works best for warehouses that have a large variety of items but don’t need to break them down into distinct SKUs or product categories.

Reverse order picking is often used in combination with wave, batch, and zone order picking for maximum efficiency.

It helps reduce the amount of time spent sorting items into different orders and makes it easier to identify any discrepancies between what was requested and what was shipped.

A real-life example of reverse order picking can be seen in a large retail warehouse.

The warehouse is stocked with a large variety of items, including clothing, home goods, electronics, and more. Every day, orders come in from the store’s customers, and it is the job of the warehouse staff to fulfill them.

To do this, the staff first gathers all of the items that were ordered. They then sort them by order, making sure that each customer gets exactly what they asked for. Finally, the sorted items are sent off to the store for delivery.

Reverse order picking is usually best for businesses with a large variety of items that don’t need to be broken down into distinct categories. This helps ensure accuracy and speed up the order fulfillment process.

It can also be cost-effective, as it does not require complex technology or extra labor costs for sorting and organizing orders.

How to make order picking more efficient

As we’ve argued, order picking is an essential part of any warehouse’s operations, and it’s important to leverage as many tools and techniques as possible to streamline the process.

Here are a few tips for making order picking more efficient:

1: Automate as much of the process as possible with technology and software.

This can include anything from barcode scanning technology to automated carts and vehicles.

We definitely recommend investing in inventory management software, especially if you’re doing anything more advanced than just single-piece picking.

For example, SkuVault has built-in features that support wave picking and many of the other order picking methodologies described in this post.

Employees can have digital pick lists and wave assignments sent to their mobile devices, allowing them to view the most efficient picking routes and interact with their assigned wave functions.

2: Utilize zone picking to break down orders into smaller, manageable tasks.

Zone picking can be incredibly helpful in reducing errors and improving productivity by breaking down orders into discrete zones that are concentrated around certain SKUs or product categories.

It also helps optimize bin sizes for each zone, ensuring that space is used effectively.

3: Make use of pick-to-light systems.

Pick-to-light systems are incredibly helpful for streamlining the order-picking process, as they enable employees to quickly and accurately locate products in the warehouse.

These systems have lights that indicate which items should be picked and provide a visual representation of where products should be placed.

4: Implement RFID technology for tracking orders and inventory.

RFID (Radio Frequency Identification) technology is the gold standard for keeping track of items and shipments throughout the warehouse, as it allows for instantaneous identification of any product or order.

It can also help reduce picking errors and increases visibility into your inventory levels at any given time.

If you’re not quite ready for a full-on RFID overhaul, at least invest in RFID’s cheaper and trustworthy little brother, barcodes. Not sure what the difference between barcodes and RFID is? Find out in our online guide!

The best order picking methodologies for various businesses

In this section, we’ll take a look at a few hypothetical eCommerce businesses and assign them the most appropriate picking methodologies.

The goal is for you to imagine order picking in action and perhaps choose the right picking methodology for your business based on the given examples.

Example 1: A handmade eCommerce business that specializes in selling small, lightweight items such as jewelry and accessories.

For this type of business, single-piece picking is probably the best option. The lighter weight of these items makes it easier to grab one item at a time instead of having employees go through multiple layers of product or sorting through a complicated order pick list.

Example 2: A home decor eCommerce business that sells a wide variety of items and often experiences large fluctuations in order volumes.

This business will likely benefit from wave picking, which can quickly process orders in batches and make sure that each employee has the right items for their assigned waves.

Since order volumes often fluctuate, wave picking allows you to adjust your resources and personnel accordingly.

Example 3: A large apparel eCommerce business with multiple SKUs and order sizes.

In this case, zone picking is probably the best option. This allows you to break down orders into smaller tasks and assign them to employees based on their physical location in the warehouse.

It also helps reduce errors by allowing each employee to focus on specific product categories and eliminate any confusion over which items should be picked or fulfilled first.

FAQs about order picking

How fast do order pickers go?

Order picker speed can vary depending on the size of the order, the complexity of the picking system, and the number of employees working on it.

Generally speaking, experienced order pickers can complete orders in roughly one to two minutes per item.

What is a batch pick?

A batch pick is a method for organizing and grouping orders in a warehouse. It involves selecting multiple items from the same location and then packing them together in one order.

Batch picking is often used when there is a large number of similar products in the warehouse, such as apparel or electronics, that need to be picked quickly and accurately.

What are the benefits of RFID technology for order picking?

RFID (Radio Frequency Identification) technology offers many advantages over conventional barcode scanning systems in order picking.

It can quickly and accurately identify items with a single scan, allowing for more efficient tracking of orders throughout the warehouse.

It also has a greater range than barcodes, so it’s less likely to be affected by environmental factors such as dust or humidity.

Overall, RFID technology can help increase order accuracy and reduce picking errors, resulting in more efficient warehouse operations.

What are the duties of a typical order picker?

A typical order picker’s duties mainly involve selecting and collecting items from the warehouse shelves according to customer orders.

They may also be responsible for logging orders into the system, packing items in containers, and ensuring all orders are properly labeled and tracked.

In addition, they may need to check inventory levels and restock shelves as needed. To ensure accuracy, order pickers must always double-check the items they are picking to make sure they match the customer’s order.

How much does an order picker usually earn?

The salary of an order picker can vary depending on experience, the company they work for, and the region in which they live.

Generally speaking, entry-level order pickers can earn anywhere from $12 to $15 per hour, while more experienced order pickers may be able to make up to $20 or more per hour.

Final thoughts

In conclusion, order picking is an essential part of any warehouse operation, and it requires a skilled team of employees to ensure accuracy and efficiency.

Knowing which order-picking technique is best for your business will help you optimize your operations, reduce errors, and improve customer satisfaction.

Ultimately, with the right combination of personnel, processes, and tools, you can achieve maximum efficiency for all your order-picking operations.

SkuVault’s powerful features can help streamline and optimize any of the above-mentioned order-picking methodologies, so be sure to check out our features page or request a demo if you’re looking for a comprehensive inventory management solution.

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