Chapter 8 Order Picking Operations Order picking is the highest priority in a warehouse for productivity improvements It’s the most costly activity (63% of operating costs) because: Labor intensive Material & information system intensive Decision support system and engineering projects intensive Many error occur in order picking It’s increasingly difficult to manage because of new operating system programs

Chapter 8 Order Picking Operations New operating systems include: JIT CT reduction (cycle time) QR (quick response Micro-marketing strategies Mega-brand strategies These require: 1. smaller orders delivered more frequently & more accurately 2. more SKUs in system requires dramatic increase in throughput, storage, and accuracy 3. renewed focus on quality improvements & customer focus

Chapter 8 Order Picking Operations Hiring more people (the traditional approach) or investing in more automation have been stymied Due to: labor shortages & high hurdle rates due to uncertain business environment Some strategies include: Issue pack optimization Pick-from-storage Pick task simplification Order batching Slotting optimization Pick sequencing

Chapter 8 Order Picking Operations Issue pack optimization: Encourage full or half pallet orders Reduces counting Reduces physical handling Reduces extra packaging Requires balancing between holding and handling costs

Chapter 8 Order Picking Operations Pick from storage goal is to pick from reserve storage areas – no forward picking areas are required Example: Ford Service Parts Distribution Centers: Automated – receipts arrive by rail in wire basket with ID plate Operator scans into WMS WMS directs operator to distribute content into totes (each with ID) Totes assigned to & conveyed to one of 54 horizontal carousels for putaway WMS interleaves putaway & picking activities Picking is light-directed – and order totes are light directed

Chapter 8 Order Picking Operations The carousels are the reserve storage -requires a highly sophisticated system Uses random storage Intelligent slotting Activity balancing Dynamic wave planning High mechanization Disciplined work force Moves storage location to the picker

Chapter 8 Order Picking Operations Pick task simplification: Eliminate / combine tasks when possible Human elements involved in picking: 55% - traveling to, from, between pick locations 10% - extracting material from locations 20% - reaching/bending, documenting, sorting, packing 15% - searching for location Can be reduced through several approaches (next slide)

Chapter 8 Order Picking Operations Stock-to-picker: Reduce travel time Carousels Mini-loaders Design of system critical to minimize wait time Person-aboard systems automatically go to pick locations Frees picker to document, sort, pack while machine is moving

Chapter 8 Order Picking Operations Picking/sorting/packing More than one order at a time Use carts with totes / dividers Pick & pack simultaneously Works well when order cube is small Packing/shipping containers must be set-up ahead of time and placed on picking carts equipped with totes or dividers

Chapter 8 Order Picking Operations Work Element Method of Elimination Required Technology / Functionality Traveling Bring pick locations to picker STP System: Miniload ASRS Horizontal Carousels Vertical Carousels Documenting Automate information flow Computer-aided order picking: Automatic ID System Light-aided order picking RF Terminals Headsets Reaching Present items at waist level Person-aboard ASRS Searching STP Systems Person-aboard ASRS

Chapter 8 Order Picking Operations Work Element Method of Elimination Required Technology / Functionality Extracting Automated Dispensing Automatic Item Picker Robotic order picker Counting Weigh counting Prepackage in issue quantities Scales on picking vehicles Restocking Automated look-ahead replenishment should ensure each location has sufficient pick-quantity before the picker reaches the location Location min-max triggers Excessive socializing Assign operators dedicated zones for picking and put-away Idling / waiting for work Dynamic zone sizing Perpetual to-do list Real-time WMS

Chapter 8 Order Picking Operations Advantage of single order picking is order integrity Disadvantage is picker travelers greater distances Order batching (to reduce travel time/line item) More orders picked by a picker during a picking tour Especially effective for small orders (one to five line items) Batch small orders by picking zone Zone picking requires downstream sortation Pickers are assigned to a specific area, portion of an aisle, multiple aisles, carousels, etc… (zones)

Chapter 8 Order Picking Operations Storage zones are distinguished from picking zones Designed for save, efficient storage Ie; bulky items, floor storage, small items, bar stock, refrigerated, frozen, flammable, explosive, etc… Free-form picking is the opposite of zone picking Pickers responsible for picking every item in the order. Move throughout the warehouse

Chapter 8 Order Picking Operations Benefits of zone picking Reduced travel time Minimal congestion Product-location familiarity Operator-zone accountability May or may not pay for itself (increased control complexities) Order assembly requirements across zones (pass from zone to zone or wave picking with down-stream sortation) Imbalances in workload, bottlenecks, gridlock, low morale

Chapter 8 Order Picking Operations Cotter & Co – logistics subsidiary of true Value Hardware Has conveyer down center of each zone Picker has roll of pick labels sorted in location sequence Enables picker to make one pass thru zone during a pick wave Picker pulls item, put barcode on it, puts it on the conveyer and moves to the next location Conveyor transports to downstream sortation Metrics are posted at the end of each zone – productivity, pick accuracy, and housekeeping

Chapter 8 Order Picking Operations Progressive order assembly (pick and pass) Order passed from one zone to next until order is picked Uses totes, pan, conveyor, carton, etc. Moves on conveyor or manually on a cart, or pallets on a towline conveyor, AGV, lift truck, pallet jack intelligent progressive order assembly systems Only move containers to a zone if there is a SKU for that order in that particular zone (called zone-skipping)

Chapter 8 Order Picking Operations Downstream sortation No order designation during picking Pickers make pass thru zone during pick wave Items bar-code labeled when picked Placed in cart or on conveyor Picked items go to sorting system where they are placed into orders Sortation systems run into the millions of dollars Benefits need to out weigh the cost

Chapter 8 Order Picking Operations Slot optimization: Slotting is determining– Appropriate storage mode Appropriate allocation of space within its storage mode Appropriate storage location within its storage mode

Chapter 8 Order Picking Operations Slotting has significant impact on warehouse Key performance indicators: Productivity Shipping accuracy Inventory accuracy Dock-to-stock time Warehouse order cycle time Storage density Level of automation

Chapter 8 Order Picking Operations Slotting generally has more influence on overall warehouse performance than other aspects of warehouse management Most warehouses are improperly slotted: Due to lack of data MIS resources No way to keep slotting current No methodology for slotting

Chapter 8 Order Picking Operations Ten step method for slotting: 1) Perform whse performance & whse gap analysis See how slotting could improve the operations Won’t work if… Poor management Poor morale Undisciplined workforce Union-management tension Poor housekeeping Inadequate computer training/support

Chapter 8 Order Picking Operations Ten step method for slotting: 2) Populate slotting database Describing activity, dimensions, storage characteristics Include: Item Number description Material type Storage environment (frozen, flammable, etc) Shelf life Dimensions, cube, weight Units/carton – cartons/pallet Unit of Measure

Chapter 8 Order Picking Operations Ten step method for slotting: 3) Compute slotting statistics Popularity (# times hit) (P) Turn-over (T) Unit Cube (C) Unit velocity (V = TC) Pick density (D = P/V) Demand Increment (I = T/P) Standard Deviation of Demand (S) Slotting Period (R) - (years, months, etc)

Chapter 8 Order Picking Operations Ten step method for slotting: 4) Conduct Warehouse Activity Profile (Ch 2) – include: Picking mode profile Operations Planning Profile 5) Assign items to families Storage environment family Order completion zones, within environment family, based on order completions and demand correlation profile Item activity profile, within order completion zones.

Chapter 8 Order Picking Operations Ten step method for slotting: 6) Assign Item Activity Families to Storage Mode Families – based on least cost storage mode option for each item 7) Map individual warehouse locations within each storage mode into Picking Activity Zones. Plot Pick Path Serpentine Main line with side trips Pod of 2 or 3 carousels

Chapter 8 Order Picking Operations Ten step method for slotting: 8) According to Pick Density assign items to Storage Mode Activity Zones Begin with highest density in A locations, then B locations, then C 9) Specify Re-slotting Rules Rules for when or if an item should be re-slotted Use From-To chart to compute cost savings by moving from a zone to every other zone

Chapter 8 Order Picking Operations Ten step method for slotting: Pick sequencing Sequence pick locations visits to reduce travel time