The explosive rise in E-fulfillment requirements for warehouses due to developments in the retail sector puts pressure on warehouse processes. Is pick and pack the right warehouse strategy for your operation?
Retail fulfillment has two typical strategies. On the one hand, products are allocated on the basis of forecasting and pushed to the stores. Replenishment orders are picked and shipped per store. Because they are different processes with specific properties, it is often difficult to merge them in the warehouse.
The warehouses in retail chains are increasingly under pressure from a number of important factors.
Store openings: in the run-up to the store opening, many processes are started that take up a lot of space in the warehouse and disrupt the daily flow. Orders are laid out and reserved but are held until opening. A larger inbound is necessary to be able to provide the store with the desired products at once. This requires a lot of storage capacity and a higher labor intensity and thus higher costs.
Product launches: The number of product launches continues to increase. This means that large volumes of products have to go through the warehouse in an increasingly shorter period of time and excess stock is also returned. As with store openings, this requires more capacity in terms of storage, labor capacity and time.
SKU: Products are made increasingly specific and customer-oriented before they reach the store. As a result, the number of similar products with a distinctive SKU is increasing sharply in Warehouses. This also has an impact on the pick and pack process which is becoming more complex in nature. Additional picking routes are plotted and thus the number of replenishment movements, from reservation to pick location, by the warehouse.
It is easy to imagine and for many warehouse managers it is a daily occurrence that bottlenecks will arise at various points in the warehouse process. Due to the complexity of routes in the process, this does not have an effect on, for example, the docking areas and reservation zones. The overall congestion in the warehouse will increase and traffic handling will become more complex. Due to the increasing pressure on the pick location, there is insufficient staff that can process the routes simultaneously. Slowly, more and more capacity bottlenecks are emerging. Many warehouses are therefore modernizing their WMS system to manage this complexity before the warehouse completely crashes. But often very little is needed to achieve this as yet. A small downtime of your WMS can be fatal.
Pick or Put.
Most warehouses have gone through the same development path. From the simple pen and paper to voice and conveyor systems. And with each step, the warehouse was able to process more order lines and improve its productivity.
There is also another option to prevent a warehouse crash. Return to the Put system as a warehouse strategy. Or how can we avoid needing pick and pack? Where Put integrates and processes orders, the Pick system leads to multi-processes and lower integration. Eliminating the separate receipt, storage and picking of orders at store / customer level has a clear advantage.
The level of automation and the technology required to implement this methodology depends on the number of stores and / or customer destinations, the number of reserved product received and the total number of units per day that is prepared. On the one hand, it is possible to work with a relatively low degree of automation, such as the use of packaging boxes with shop or customer ID labels or both that are placed on the floor to support the process. For more destinations, put-to-light walls with bin positions that can hold packaging boxes can be used to enhance the low end process. On the other side of automation, advanced technology is deployed such as conveyor belts and sorting systems, integrated with put-to-light technology, tapers capable of handling high volumes in units with hundreds or even thousands of destinations with extremely high productivity.
Whether you use Pick or Put is not a simple analysis. There are a number of factors, in addition to warehouse specific issues, that are included in the analysis:
- Percentage of the total number of lines and units that are allocated and pushed to the shops versus percentage of replenishment based on demand.
- The frequency of product launches and the order profile for retail order allocation.
- Space availability to increase picking footprint in the warehouse.
- The current level of productivity for put-away, stocking and picking activities.
Annual labor costs.
An in-depth analysis is required of the various pick and put options to understand the space efficiency, labor requirements and investments required for each option and to ensure the best outcome.
- There are a number of questions that the warehouse manager must ask in any case when drawing up his analysis.
- Is it a high percentage of unit throughput allocated at the time of receipt?
- Is it possible to fill one or more boxes per day with assigned product for a shop / customer?
- Are there regular product launches that require shipments to arrive on a common date?
- How much SKU do the usual pick patterns and paths in the warehouse exceed?
Are the pick zones limited by this product volume and throughput?
Defining the business case of converting to a put system, as well as determining the right technology, requires an in-depth analysis of the current business model, expected growth and expected changes in the company. An analysis of the need for space, personnel impact and investment / operational costs, comparing more conventional options, along with multiple put system options, are necessary to provide the warehouse manager with the correct information in determining his strategy.