BUS104 Supply Chain Management Warehousing Operations Certification Track

BUS104 Supply Chain Management Warehousing Operations Certification Track Learning Block 4 – Picking and Packing James Jennings

Common Learning Block Description • As with other activities that take place in DCs, it is important to understand what is involved in picking and packing goods to relate to customers and their needs. • Associates working in this area must have a solid understanding of the process and tools they use and a solid focus on perfect execution because picking and packing operations are often the source of the greatest number of customer order errors in a warehouse.

What is Picking? • The process of converting products from the form in which they are held in DCs to the form required by the customer is known as order selection. • Picking is essentially a short-hand descriptor for the order selection process. • There are different methods for picking, and a combination of these methods can be used within a single DC.

What is Picking? • The picking process includes selecting goods to fulfill customer orders. • Personnel who fulfill orders travel through a facility to pick goods and pull the requested quantity of each product identified on a pick list. • The pick list shows customers’ orders and may take the form of a paper checklist, labels placed on cartons, a computer display, or a voice-activated picking system . • Once picked, the items may be labeled and put on a conveyor system to be transferred to the shipping area or assembled on a pallet or cart designated for a customer.

What is Picking? • For many organizations, order picking is the most labor-intensive and expensive distribution activity. • This function requires; • a great deal of travel throughout a distribution facility • and a great deal of handling individual cases or units within cases. • It is important for this operation to be: • productive, • safe, • and accurate.

What is Picking? • In general, when an order is received, the locations of the products required to fill that order are determined, and a list is generated to direct the picker to locations within the DC where the products may be found. • If an automated device is being used, it may bring the item to the order picker. • If picking is done using a computer, the software will evaluate the most efficient route for picking the desired products. • Replenishment operations is also important to picking operations, which entails moving product from storage locations in a distribution facility to designated pick areas. • In some distribution operations, this might be a separate picking area. Specialized order picking equipment is often required to retrieve product. Replenishment equipment operators keep an adequate supply of product in the pick positions/areas.

What is Picking? • Objectives of Order Picking • When picking customers’ orders, the objective is to present a full range of stock in as small an area as possible without unnecessary replenishment and congestion. The basics of effective order picking include the following actions: • Minimize movement • Reduce order processing time • Reduce ineffective time

What is Picking? • Reducing Movement Time • Following are the methods of picking that are used to reduce movement time. • One method frequently used to reduce movement when picking orders is to use popularity storage. In most product ranges, 20% provides approximately between 60% and 90% of the throughput (most often 20:80). This ratio is used to concentrate together the fast movers and, thus, reduce walking/movement as shown below. Figure 33 shows splitting the range of products in plan only, but improved productivity can also be achieved by placing fast movers at the most convenient height (e.g., at ground level).

What is Picking? • Reducing Movement Time • Movement can be reduced in order picking by consolidating the “fast” movers together. • One system often used in DCs is to have a separate forward stock where part or all of a product range is duplicated in a separate picking area. If there is a separate forward stock, the advantage is a smaller picking area, thus, less movement. A smaller forward stock area can be used for picking in which all or part of a product range is duplicated. The advantage of this is a smaller picking area resulting in less movement, but the disadvantage is more difficult control and double handling in moving stock from reserve to forward storage. • The decision to have a separate forward picking area is based on a tradeoff in cost between the cost of picking from total stock and the cost of picking from a smaller, but representative, area, plus the cost of moving items from the bulk stock to a separate picking area. A reserve stock, which is separated from a forward stock

What is Picking? • Picking Techniques • Several techniques exist for picking orders, including the following: • Individual order picking: An order picker picks a complete, individual order on each circulation through the store/order picking area. • Batch picking: The principle here is to pick products for several orders at the same time on one circulation of the store/picking area and then to sort them by customer order. The sort may take place immediately (e.g., the picker may have a cart with separate compartments, each compartment holding one order). Alternatively, the sorting may take place in a separate order assembly area. • Zone picking: This system is typically used in DCs that have a large inventory range and where the throughput is high. Each picker looks after a small section of the store and orders flow from section to section, gradually being built up

What is Picking? • Picking Techniques • Goods to picker technique: • In this picking technique, the principle is to keep the picker in a fixed (or limited area) location and to deliver the goods to the picker by using a mechanical device. • The travel time, in this case, is for the mechanical device to bring the items, not for the picker to get them. • The advantage of this type of system is that it eliminates travel time for the picker almost entirely. • Wave picking: • This is a variation on zone picking and batch picking in which all zones are picked at the same time and the items are later sorted and consolidated into individual orders/shipments, rather than orders moving from one zone to the next for picking. • Wave picking is the quickest method for picking multi-item orders; however, sorting and consolidating can be tricky. • Operations with high total number of SKUs and moderate to high picks per order may benefit from wave picking. Wave picking may be used to isolated orders by specific carriers, routes, or zones.

What is Picking? • Types of Picking Systems/Equipment Used • Methods for order picking vary greatly, and the level of difficulty in choosing the best method for an operation will depend on the type of industry/operation. • Following are some factors that will affect decisions about methods for order picking: • characteristics of the product being handled, • total number of transactions, • total number of orders, picks per order, • quantity per pick, • picks per SKU, • total number of SKUs, • orders with value-added processing (e.g., private labeling), • and orders from piece pick, case pick, or full pallet loads.

What is Picking? • Types of Picking Systems/Equipment Used • In many instances, a combination of picking methods is needed to handle diverse product and order characteristics. Three key forms/systems of order picking are outlined below. • Piece picking: • Piece picking, also known as broken case picking or pick/pack operations, describes systems in which individual items are picked. Piece pick operations usually have a large SKU base in the thousands or tens of thousands, small quantities per pick, and short cycle times. Mail order catalog companies and repair parts distributors are good examples of piece pick operations. • Case picking: • Case picking operations are based on picking full cases of product and tend to have less diversity in product characteristics than do piece picking operations. Case picking operations also have fewer SKUs and higher picks per SKU.

What is Picking? • Types of Picking Systems/Equipment Used • In many instances, a combination of picking methods is needed to handle diverse product and order characteristics. Three key forms/systems of order picking are outlined below. • Full pallet picking: • Full pallet picking is also known as unit load picking. The systematic methods for full pallet picking are much simpler than either piece pick or case pick; however, there are many choices in storage equipment, storage configurations, and types of lift trucks used. • After the items have been picked, they are directed to their next destination via the manual or automated sorting systems described in Learning Block 3. Forklifts, conveyors, or AGVs deliver products directly to shipping or to an intermediate value-adding consolidation area before orders reach the shipping dock.

Packing Operations • Order Consolidation and Packaging • In its simplest form, order consolidation is the combination of products that have been picked to fill a unique customer order. This process of order consolidation brings together all the demand flows into an individual consolidated order and packs. • During the process of consolidation, several types of value-adding activities may be performed. Filling an order may require combining various quantities of a single item, mixing various quantities of different items, or kitting. • Kitting is a process in which a group of specific, individual items are packed together inside the container the consumer will handle to create one unique item. For example, kitting can happen when a company supplies nurses’ work stations, in hospitals, directly with kits of surgical equipment containing dressings, needles, syringes, swabs, etc. These kits are made from various line items within the DC and then supplied, as a kit, directly to the nurses’ work stations in a hospital on a JIT basis. Another example of value-added activity performed for customers could be applying customer-specific labels, price tags, or bar codes to cartons and/or using customer-specific cartons for packaging.

Packing Operations • Order Consolidation and Packaging • The items must also be checked against the order for completeness and for any damages. • Then, any damaged items are replaced before the order is packed and labeled. The objective of packaging is to ensure that the SKU is protected from damage during delivery and is received by the customer in satisfactory condition. • Smaller items may need to be placed in special cartons or containers and protected with materials such as foam or bubble wrap. • These cartons or containers are then sealed with glue, tape, or staples before they are labeled. Cartons that already have a bar code can be combined into pallets by using machines called automatic palletizers. • The pallets are then shrink- or stretch-wrapped and labeled for shipping.

What is Warehousing? • DCs perform necessary functions, such as creating a time utility for raw materials, work in process, finished products, spare parts, etc. • Proper placement of facilities allows companies to meet customers’ expectations of delivery time. • The proximity of market-oriented DCs to customers allows firms to serve customers with shorter lead times. DCs increase the time utility of goods by broadening their time availability. • This means that customers are able to obtain given products when and where they demand them, within a given timeframe. The distribution/warehousing function continues to be increasingly important as companies and industries use customer service to increase their competitive advantage.

Key Metrics Used in Picking and Packing • The key KPIs for picking and packing include the following: 1. Cost: cost of picking per order line 2. Productivity: order lines picked per hour 3. Utilization: picking labor and equipment utilization percentage 4. Quality: perfect picking lines percentage 5. Cycle time: order pick cycle time per order

BUS104 Supply Chain Management Warehousing Operations Certification Track