Procurement- Lecture 10 Order picking and replenishment

1. Procurement- Lecture 10 Order picking and replenishment ABDIKARIM MOHAIDIN AHMED muhudiin@gmail.com

2. INTRODUCTION • Order picking represents a key objective of most warehouses: to extract from inventory the particular goods required by customers and bring them together to form a single shipment — accurately, on time and in good condition. • This activity is critical in that it directly impacts on customer service, as well as being very costly. Warehousing and Storage

3. INTRODUCTION Cont… • Order picking typically accounts for about 50 per cent of the direct labour costs of a Warehouse. • In general, picking still tends to be largely a manual operation. However, there are many technology aids in terms of information systems and equipment that may be used to provide high levels of productivity and accuracy. Warehousing and Storage

4. ORDER PICKING CONCEPTS • Pick-to-order. The simplest form of this is where one picker in one circuit of the picking area collects the items required for one order. • This may be appropriate when one order will typically fill the capacity of the picking trolley or truck. Warehousing and Storage

5. ORDER PICKING CONCEPTS Cont… • An extension of this is when more than one order is picked per circuit, but each of the orders is accumulated into a separate container so that at the end of the picking circuit each order is discrete. • Another form of pick-to-order is where pickers each pick part of a customer's order, for example where an order may fill several roll-cage pallets. Warehousing and Storage

6. ORDER PICKING CONCEPTS Cont… • Batch picking. For small orders it is not always economic to pick only one order per circuit. If it is not appropriate to pick multiple orders and to keep them separate during picking, a group of orders can be consolidated during order processing so that a picker assembles all the items required for that group of orders. • At the conclusion of the picking circuit, the bulk-picked items are then sorted down to individual order level. Warehousing and Storage

7. ORDER PICKING CONCEPTS Cont… • Pick-by-line or pick-to-zero. Under this concept, the exact numbers of cases or items are presented for picking. For example, they may be brought forward from the reserve storage area or they may be specifically ordered from suppliers for cross-docking. • In both cases, the unit load of one product line is picked to waiting customer orders (hence pick-by-line) and the picking continues until that line is exhausted (hence pick-to-zero). Warehousing and Storage

8. ORDER PICKING CONCEPTS Cont… • There are a number of factors that need to be considered in determining which of the above concepts to use, for example the product range, the size of order, the picking equipment, and the size of unit load or container into which orders are being picked. • In some situations it may be appropriate to make use of a combination of two or more of the above picking regimes within one picking system. Warehousing and Storage

9. ORDER PICKING CONCEPTS Cont… • A typical warehouse order will require just one or two slow-moving products, but a large quantity of fast-moving popular products. • Zone picking: This approach is relevant where individual orders are beyond the capacity of one picker to collect in one picking circuit, and where for reasons of meeting dispatch times it is not feasible to pick sequentially until an order is complete. Warehousing and Storage

10. ORDER PICKING CONCEPTS Cont… • It is also used where there are different zones for products, for example where products are separated for reasons of security, hazard or temperature regime. • With zone picking, stock is laid out in zones, each holding a specified part of the product range and staffed by dedicated pickers. Warehousing and Storage

11. ORDER PICKING CONCEPTS Cont… • Each incoming order is subdivided by zone, and picking then takes place simultaneously in all zones until order completion. • Wave picking: Orders may be released in waves (for example, hourly or each morning and afternoon) in order to control the flow of goods in terms of replenishment, picking, packing, marshalling and dispatch. Warehousing and Storage

12. ORDER PICKING CONCEPTS Cont… • The timing of the waves is determined by the outgoing vehicle schedule, so that orders are released to allow enough time to meet this schedule. Note that orders may not be released at the same time to each zone. • The use of waves allows for close management control of operations such as sorting and marshalling, which may be limited in terms of how many orders can be handled at the same time. Warehousing and Storage

13. ORDER PICKING EQUIPMENT • There is a wide range of order picking equipment types. Deciding the most appropriate for a given situation will depend on such factors as the types of product, product sizes and weights, product range, the picking frequency, order size range, number of items per order, and order frequency. • Discussion of methods of picking is presented under three categories — picker to goods, goods to picker, and automated systems. Warehousing and Storage

14. ORDER PICKING EQUIPMENT Cont… • Picker to goods: This category involves the order picker travelling to the goods in order to pick them. • As with all picking categories, consideration needs to be given as to what storage equipment the picker is picking from (eg shelving, flow racks or pallet locations), what equipment the picker is picking to (eg trolley or powered pallet truck) and what the picker is picking into or on to (eg wooden pallet or roll-cage pallet). Warehousing and Storage

15. ORDER PICKING EQUIPMENT Cont… • The following is a list of common picking equipment types, based chiefly on what the picker is picking to: • Trolleys and roll-cage pallets. With this method, the picker pushes the trolley (or roll-cage pallet) between shelving or pallet racking in order to access the goods. • Powered order picking trucks. These are electrically powered trucks that have forks, often carrying two wooden pallets or three roll-cage pallets, on to which picked goods may be placed. Warehousing and Storage

16. ORDER PICKING EQUIPMENT Cont… • Free-path high-level. picking trucks. For picking higher up from racking or shelving, high-level picking trucks incorporate a rising cab, which can lift the picker to the required levels. • Fixed-path high-level picking trucks. Crane technology is also used for picking from narrow aisles, with pickers in crane-mounted rising cabs. • Pick cars. A pick car operates up and down in a racking aisle, and is equipped with a rising cab linked by a hinged joint to an inclined conveyor, which moves up and down with the cab. Warehousing and Storage

17. ORDER PICKING EQUIPMENT Cont… • Conveyors. A number of picking operations make use of conveyors. For example, pedestrian pickers may select the required items from pallet locations, shelving or flow racks and place them on to conveyors to be taken away for subsequent packing and collation into customer orders. • Goods to picker: Various systems have evolved that are designed to reduce the very significant proportion of picker time spent travelling in picker-to-goods systems. Warehousing and Storage

18. ORDER PICKING EQUIPMENT Cont… • Generally, goods-to-picker systems involve significant mechanization and can therefore be linked in to computer control to present pickers with the required goods in the appropriate sequence. • These systems are generally suitable for small item picking. Warehousing and Storage

19. ORDER PICKING EQUIPMENT Cont… • Horizontal and vertical carousels. It should be noted that goods are presented at the ideal picking height for the picker in the case of vertical carousels. • Miniloads. These may be used for full carton picking or for presenting cartons, or tote bins, to a picker for the picking of individual units. The remaining goods are then returned to the miniload storage location. Warehousing and Storage

20. ORDER PICKING EQUIPMENT Cont… • Pallet AS/RS. These systems may be used in a similar way, as described above, with pallets being presented to the picker. However, care has to be taken that throughput requirements can be met and that storage utilization is not adversely affected by the return of many part-empty pallets. • A hybrid system that may be used is that of a dynamic pick face. Warehousing and Storage

21. ORDER PICKING EQUIPMENT Cont… • This is a 'goods to-aisle' system, combined with a picker-to-goods method. Frequently, orders are not received at one time for the full range of goods held in a warehouse. • The basis of a dynamic pick face is that only those goods that are required, for example in that picking wave, are placed in the picking aisles. This results in a condensed pick face and thus reduced travelling time. Warehousing and Storage

22. ORDER PICKING EQUIPMENT Cont… • Miniload systems may be used to pick the required tote bins and bring them forward to a pick face ready for picking. The picking may then be undertaken manually, for example from the tote bins brought forward on to a conveyor. Warehousing and Storage

23. ORDER PICKING EQUIPMENT Cont… • Dynamic pick faces are normally used for the slower-moving lines that are ordered infrequently, as the fast-moving lines tend to be required for every picking wave and are thus allocated permanent picking locations. Warehousing and Storage

24. ORDER PICKING EQUIPMENT Cont… • Automated systems: The picking systems described so far all require a person to pick the individual items that make up an order. This is not surprising, considering the range of items that may need to be picked and the different ways in which they may rest in the picking locations. • However, there are automated picking systems available that are suitable for certain applications. These include the following: Warehousing and Storage

25. ORDER PICKING EQUIPMENT Cont… • Layer pickers. Cases are normally stacked on to pallets in layers. In some industries, such as fast-moving consumer goods, price differentials are offered to customers based on whether they order in pallet, layer or case quantities. • In such cases, it may be beneficial to automate the picking of layer quantities. Typically, a pallet is brought forward from the reserve pallet store (eg by AS/ RS and conveyor) to a layer picking machine. Warehousing and Storage

26. ORDER PICKING EQUIPMENT Cont… • This machine would lift the top layer off (eg by suction pads) and place it on to a pallet that is being assembled for the customer order. • The product pallet would be returned to the reserve store and another pallet would be brought forward and the process repeated until the customer pallet was filled with all the layers required. Warehousing and Storage

27. ORDER PICKING EQUIPMENT Cont… • The layer picking machine often has three sections: one for the product pallet; one for the customer pallet being assembled; and one for empty wooden pallets that will form the next customer pallets. • Dispensers. A dispenser normally comprises lines of vertical magazines, on one or both sides of a belt conveyor. The magazines are loaded with SKUs, which need to be in regularly shaped packages for ease of movement down the magazines, and fairly small (eg pharmaceutical packs, cosmetics and beauty products). Warehousing and Storage

28. ORDER PICKING EQUIPMENT Cont… • As the conveyor moves between the two lines, the required order quantities of the required SKUs are dispensed under computer control, all items for one order being dispensed on to the same section of conveyor. • When the accumulated items reach the end of the conveyor, all the items for the order are together and fall off the conveyor into a carton ready to be taken away for packing. Warehousing and Storage

29. ORDER PICKING EQUIPMENT Cont… • Robotic applications. The use of robots for the routine stacking and de-stacking of cases on to and off pallets is well established. • Robots can be programmed to stack to prescribed patterns, to build up layers on a pallet, and to use different patterns on adjacent rows to assist pallet load stability. • They are often used at the end of production lines for this purpose. As regards order picking, there are a number of products on the market. Warehousing and Storage

30. SORTATION • If goods have been batch-picked, then they will need to be sorted into the relevant customer orders. • This may be undertaken manually (eg sorting to pigeon-hole or to roll-cage pallet) or by automated sortation equipment. Similarly, goods that have been zone-picked will need to be brought together into the relevant orders. Warehousing and Storage

31. SORTATION Cont… • Thismay be a much simpler operation (ie depending on the number of zones) but may still be undertaken either manually or with the assistance of some form of conveyorized sortation. • Sortation may occur immediately after picking so that items can be assembled into the appropriate orders ready for packing or dispatch. Warehousing and Storage

32. SORTATION Cont… • Where there is a separate packing operation, sortation may also occur after packing so that the packed goods can be assembled into vehicle loads. Warehousing and Storage

33. LAYOUT AND SLOTTING • The layout of the picking area is critical to achieving high levels of productivity. • One of the first decisions that needs to be taken is whether to have separate reserve inventory and picking locations for individual stock-keeping units (SKUs) or to combine all the inventory into a single location. • This will largely depend on the total amount of inventory for an SKU. Warehousing and Storage

34. LAYOUT AND SLOTTING Cont… • For example, in the case of small electronic items the total inventory may fit in a small tote bin and therefore it would be sensible to have a single location, whereas there may be many pallets held of a particular retail food line and it would not be practicable to hold all of these pallets in picking positions. Warehousing and Storage

35. LAYOUT AND SLOTTING Cont… • The general principle is that picking stock should be concentrated into the smallest feasible area, so as to minimize travelling time between the SKUs. Reserve inventory therefore needs to be held separately in many instances. • Where this is the case, a decision needs to be taken as to the amount of inventory to place in the pick location. Warehousing and Storage

36. INFORMATION IN ORDER PICKING • Accuracy and completeness of order fill, together with timeliness, are key factors in picking performance, and a good information and communication system is a prerequisite for meeting these objectives. Warehousing and Storage

37. INFORMATION IN ORDER PICKING Cont… • This includes appropriate presentation of the correct and sufficient information to the order picking staff, ideally with minimum clerical effort required from them, with the facility for them to communicate back to the managing system in the event of mislocated stock or shortage. Warehousing and Storage

38. INFORMATION IN ORDER PICKING Cont… • The information required by pickers is the picking locations they have to visit and the sequence of the visits, the SKUs to be picked and the quantities, and the destination or order reference for the picked goods. • The traditional way for pickers to receive picking instructions was by paper picking lists, which itemized the SKUs to be picked and the quantities, and left space for the picker to record differences between required and actual quantities. Warehousing and Storage

39. INFORMATION IN ORDER PICKING Cont… • There are numerous alternative methods available, supported by varying levels of complexity in information systems: • Pick by label. A gummed label is printed for each item to be picked, and the labels for one order are produced on a backing sheet in the sequence in which they are to be picked. The picker attaches the relevant gummed label to each item as it is picked, and any labels remaining at the end of the pick circuit show what shortages have occurred. Warehousing and Storage

40. INFORMATION IN ORDER PICKING Cont… • Bar codes. These are widely used in warehousing. One use is to identify uniquely every storage and picking location in a warehouse, and of course to identify products and product information such as batch identification. In picking operations this can be used to verify pick locations and the items being picked. • Radio data terminals. These can provide online communication between designated warehouse workstations and warehouse management computer packages and as such have an application in order picking. Warehousing and Storage

41. INFORMATION IN ORDER PICKING Cont… • Pick by light. Normally, in these systems, every picking location is fitted with an LED (light-emitting diode) display panel, controlled by computer. A common application is for a plastic tote bin, representing a customer order, to be taken by conveyor to a specific zone of the warehouse. Warehousing and Storage

42. INFORMATION IN ORDER PICKING Cont… • Put to light. This is similar to pick by light, except that it is normally used in the sortation process. For example, a picker may undertake a batch-pick and then return to an area of pigeon-hole shelving, with each pigeon-hole representing a customer order. • Voice technology. With this technology, the picker can hear voice instructions from the computer through a headset. The picker then selects the required items and speaks through a microphone to confirm the pick. Warehousing and Storage

43. E-FU LFI LM ENT • There has been a rapid growth in recent years in the use of the internet for ordering goods, both from the home and from businesses (eg individuals being able to order goods for their own office or department, rather than ordering through a centralized purchasing department that would consolidate such orders). Warehousing and Storage

44. E-FU LFI LM ENT Cont… • The orders that result from internet ordering tend to have rather different characteristics, in that they are often small orders, with few order lines (ie a small number of product lines being ordered), few items per line, and often requiring individual units rather than whole cases. Warehousing and Storage

45. E-FU LFI LM ENT Cont… • These characteristics increase the picking workload for a given throughput of goods. It is therefore important that the picking solutions adopted are well suited to the picking of large numbers of small orders at unit level. • For low-throughput operations, this may involve the use of multiple order picking using pigeon-hole trolleys, or trolleys containing a number of tote bins. Warehousing and Storage

46. E-FU LFI LM ENT Cont… • By these means, a dozen or more orders can be picked at one time, with the picker sorting the orders to pigeon-hole or tote bin. • An alternative is to batch-pick goods and bring them back to a manual sortation area, which may comprise a number of pigeon-hole shelves (each representing an order). • The goods are then sorted to these pigeon-holes. This may be assisted by a put-to-light system as described above. Warehousing and Storage

47. E-FU LFI LM ENT Cont… • For high-throughput operations, zone picking may be conducted with tote bins ( each representing an order or batch of orders) being circulated on conveyors to each zone that holds goods for that order (or orders). • Goods are then picked into the appropriate tote bin for that order from pallets, shelving or flow racks, and directed to the packing area. Warehousing and Storage

48. E-FU LFI LM ENT Cont… • Alternatively, a batch-pick can be conducted directly on to a conveyor, followed by automated high-speed sortation. • Both of these methods can be supported by pick-to-light technology where appropriate. • In addition, where there are large product ranges, dynamic pick faces can be used for medium- and slow-moving lines. Warehousing and Storage

49. E-FU LFI LM ENT Cont… • A particular characteristic of many internet operations is the high proportion of single-line orders (eg a consumer ordering just a digital camera). • There is no need to sort these goods in the same way as for multiple-line orders that need to be brought together, and therefore single-line orders may be subject to a separate process, bypassing order sortation and being sent directly to packing. Warehousing and Storage

50. PICKING PRODUCTIVITY • Perhaps the most common measure of picking performance is the pick rate, expressed as the number of 'picks' per person per hour. • Some companies mean by this the number of items per hour, and some measure the number of SKUs or order lines per hour. • This can lead to confusion, and it is important always to define the units. Warehousing and Storage