Wednesday, June 24, 2015

Logistics – Warehouse Management (Material Handling & Order Picking) – Part VI

In this session we will be learning more about order picking method and equipment used in the warehouse.  

What is Order Picking ?  It is the process of retrieving/picking right products of specified quantity from the storage (Inventory) location and move it to the shipping dock (outbound area) for shipment, in response to a customer order.  It is the

  • most labour intensive operation in those warehouse where the manual operation is followed
  • high capital intensive operation where the automated operation is followed

The methods of order picking vary greatly.  Choosing the best order picking method for your warehouse will depend on the Product character, type of business operation followed and customer order character.  Many times a combination of picking methods is needed to handle diverse product and order characteristics.

Let us see few factors that will affect your decision on a method for order picking for a product.

   a)   The characteristics of the product being handled.  (eg., solid , liquid or gas, fragile, hazardous, weight etc)

b)    Whether your business process follows piece pick, case pick, or full-pallet loads.

For example, Glaxosmithkline company who is the manufacturer of Horlicks 2Kg bottle, may dispatch this item in cases only (6 pieces in a carton box) to their distributors, as per their business polices.  Hence the company is following case pick as order picking method for that product.  Whereas the distributor may sell the Horlicks 2 Kg bottle to retail shops either in cases or in pieces according to their business policies / process.  Retail shop can sell the same product to consumer in  pieces.  Hence the retail shop follow Piece Pick as order picking method.

From this example one can easily understand that even though the product is same (Horlicks 2 Kg) but the order picking method (Pallet /case / piece picking)  varies according to the product character and the business operation followed ie., manufacture / distributor / retailer.

c)   Customer Order Character (Refer the given below example) 

     -Total number of orders – Number of customer orders received per day.
-     picks per order (highlighted in black color in the below example)
-     quantity per pick (column 4)
-     picks per SKU(column 7)  
-     total number of SKUs (Number of products in the given order ie 5 items)

d)      Value added processing such as private labeling.  For example AIIMS Hospital, Delhi places an order of 10 lakhs bottle of Crocin Syrup 60 ml from Glaxosmithkline with AIIMS logo stickers on the top of the crocin pack. 

We will learn customer order character in details with an example for better understanding.  Please note that the data given below are meant for illustrative purpose only and not the actual company process.

In the above example Glaxosmithkline received only one customer order from ABC Ltd on a particular day.  Hence total number of customer order received on that day by the company is 1.
Column 1 - The product name 

Column 2 explain how many units of each product packed in a case eg., 24 units of Horlicks 500g bottles are packed in a carton box or case.  The company can sell products in case lot as per their business policy

Column 3 gives approximate weight of the carton of each product.  For example Horlicks 2 Kg bottle case weight 12 Kgs when 6 units are packed inside the case.  

Column 4 - The weight of carton given in column 3, enable the warehouse manager to decide how many cases can be picked and carried (column 4) by a picker / loader with less effort in a single trip.  In the above example we can understand that 1 case of Horlicks 2Kg can be picked by picker / loader in a trip, whereas the same person can pick 2 cases of Crocin tablets per trip due to less weight.  

Column 5 is the customer order of each product in units and column 6 is the customer order of each product in case lot.

Column 7 indicate how many picks from storage area and trip to shipping dock area a picker / loader has to make to complete one particular SKU / product in a given customer order.  In the above example a picker / loader has to pick 20 times of  Crocin syrup case to complete that particular SKU in a given order.  Please note that the picker / loader can carry 2 cases of Crocin syrup in a single trip as per norms due to less weight.

Picks per order is the sum of the column 7.  In other words it is the number of picks a picker / loader has to make to complete all SKUs / products in the given order.  In the above example, a picker has to pick 385 times of all products in order to complete the dispatch for a given order.  Please note that one pick means the picker has to pick one (for Horlicks 500g Bottle) or two cartons (for Crocin Tablets) according to picking capacity at one time from the storage location and move it to shipping (outbound) area.

In our subsequent sessions, we will learn the following :

  • how the customer order character affect the decision on order pick method with example
  • learn more about different order pick methods and selection of equipment
  • how to measure (Key performance Indicator) the efficiency of Order pick methods.

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