The Challenges in the Picking Area

The picking area consumes up to 60% of operating costs

The Picking area is dedicated to separating and preparing customer orders. It is so important that it consumes up to 60% of the operational costs of a storage unit. This percentage is high because it involves many people and equipment during the execution of daily tasks. This information alone demonstrates that the administration of this service involves several challenges.

And these challenges were amplified with the online universe and the growing demand for virtual markets due to the pandemic. See some of them now:

• Exponential increase in the number of SKUs (items) — customers demanded a greater variety of products, and this directly impacted warehousing processes.
• Increased number of orders—Consumers, aware that they will have a wide variety of options available to them whenever they want, have begun to make smaller purchases again and again.
• Concentration in large warehouses — the search for large and well-located spaces geographically reduces costs and speeds up work, giving the market the speed it demands.
• Next-Day or Same-Day Delivery (The Last Mile) — Patience is not a customer virtue. They are anxiously waiting for the goods. They like to follow the movement of the product in real time and do not hide their preference for fast deliveries.

These challenges are added to other daily ones, but are, at the moment, the most prominent ones. To overcome them, logistics specialists suggest some actions:

• Prioritize products with the highest turnover — Pareto’s Law applies here (20% of products are equivalent to 80% of cargo movements). So, first, identify what your items are with the highest output. Then position these goods closer to the shipping area, thus reducing the physical distance for collecting and sending the products.
• Use clear, easy-to-handle documents — A Picking document should be simple and straightforward, containing only specific information, such as product location, description, and quantity requested.
• Organize the orders according to the physical configurations — when generating the Picking document, the list must be assembled so that the operator can carry out the shortest possible distance in the warehouse.
• Maintain an efficient product location system — here information technology is needed to facilitate product location in the warehouse.
• Evaluate operator errors — you need to know if the error is with the system or the operator. If the employee is making too many mistakes, unfortunately, he will have to be replaced. There can be no errors in the Picking area.
• Avoid counting products during picking — this is only possible if products are packed in groups. For example, if the operator needs 1,000 units of a certain item, it is much easier to collect ten bales of 100 units each.
• Eliminate paper documents — send the order through the computer screen and use auxiliary technologies such as bar code readers, voice recognition systems and radio frequency terminals.

These are generic guidelines, which apply to any Picking model. Below are the most used in the corporate world:

• Discrete Picking (Order Picking) — in this model, an employee (operator) is responsible for a single order at a time. It is suitable for those who receive few orders in large volumes.
• Picking by lot (Batch Picking) — here, each operator picks several units of the same item present in several orders, reducing movement in the warehouse. Subsequently, these products are separated according to the specific destination. This modality is indicated for those who receive orders with very fractional SKUs, typical of e-commerce.
• Zone Picking — this picking strategy is very similar to a production line. The warehouse is divided into zones and the operator is responsible for the products stored in that part of the building. Conveyors (conveyor belts) usually connect one zone to another to avoid displacement. It is recommended for DCs with an abundance of SKUs, high sales volume, and medium to low order quantity. 
• Wave Picking — is a mixture of Zone Picking and Batch Picking. A wave is generated in the DC with the grouping of several orders (according to the carrier, route, or delivery region) and the operators, each in their zone, separate the requested products from that sector. All collections occur simultaneously. Then the goods go to a consolidation area where they are separated into individual orders. This model is indicated for those who have numerous SKUs and a medium to high number of items per order.

The models above are the most common. But some experts indicate other options, which can be merged with what has been mentioned so far, depending on the entrepreneur’s needs:

• Bucket Brigades — The “Bucket Brigades” strategy has been used in production lines for its self-balancing functionality. When the operator completes his request, he moves on to the next one that was previously started by another operator, who will consequently move on to the next request. Simply put, one operator helps the other. The team has to be very finely tuned for this to work as expected.
• Large volumes (Bulk Picking) — this is a model where large quantities of a given SKU are transported from inside the warehouse to a picking area, where they are fractionated to meet a high number of orders for that product.
•  In two steps (Two Steps Picking) — modality that rationalizes the use of forklifts or stacker cranes, grouping a certain number of orders that need these equipments for the removal of products that are in less accessible places of the warehouse, to later move them to another sector, On the first floor, where they will be separated again for final shipment.
• With confirmation (Pick and confirm / Picking by scan) — in this strategy, operators use radiofrequency equipment, performing bar code reading to identify the product and its location within the CD. With this equipment, it is possible to evaluate the operator’s performance in real time and practically eliminate errors in the collection and separation of products for the consumer, before they enter the last mile.
• Goods to Person Picking — this is a modern method, where the product is picked up by machines and taken by conveyors to the operator, thanks to the WMS command, which gives the order to the equipment as soon as the order arrives at the warehouse. Indicated for low and medium turnover products, and also for having little physical space for storage.

But which Picking model to choose? It all depends on your field of activity, warehouse dimensions, type of product stored, number of SKUs, volume of orders, seasonality of sales, as well as the financial energy to implement specific tools.

Once this information has been collected, look for which model has the best cost/benefit ratio for your business, highlighting the agility of the chosen strategy. The faster the operation, the greater the customer satisfaction.

Also pay attention to the daily life of your Picking area. See how the addressing (location), replenishment, cubing (the relationship between weight and space occupied in the warehouse), count back (counting of items), checkout (checking of items) , kanban (control of the flow of processes), active call (MLog system feature that automatically coordinates the distribution of internal activities to operators), visual management (management system where the entire team visualizes everything that is being done) and line balancing. This last point concerns not only the location of the products within the DC, but also the warehouse replenishment policy.

To monitor this multifaceted performance, it is necessary to use verification metrics, that is, KPIs (Key Performance Indicator), such as, for example, time from receiving to pick location, time from receiving to pick location, order (Picking Time), perfect order (Perfect Order), complete orders on time (OTIF — On Time In Full) and cost per line item shipped (Cost per line item shipped), in addition to inventory accuracy (Inventory Accuracy), regarding the synchronization of physical stock information with the data present in the virtual system. 

All this monitoring is easier with technological tools, with radiofrequency equipment (to read bar codes), Voice Picking (command system based on verbal instructions, transmitted through headphones), Pick-to-Ligh (control of the number of items per lighted panel) and automatic systems. This without leaving aside, of course, a good WMS (Warehouse Management System).

But is all this necessary? Usually yes. Just look at the most common problems in the day-to-day life of a Distribution Center: employees can’t find the product, make mistakes when separating items, slowness when orders are passed on pieces of paper, lack of priority in the sequence of orders, excess of manpower to compensate for low productivity, flaws in the internal addressing of the product (that is, the location in the warehouse) and the inability to know who made a mistake in this whole tangle. Without the organization of the flow of goods and the support of the IT Department, everything is more difficult. The good news is that solutions are available on the market. At Águia Sistemas , we can help you, talk to us.