We streamlined warehouse order picking and movement in warehouse operations for this supply chain business partner, enabling them to boost their order batching efficiency and labor productivity.
Business Goals
The client is a third-party logistics service provider that faced significant challenges in efficiently driving its order fulfillment center operations. Though order fulfillment is an inherently labor-intensive function, the client had already implemented automation to a certain extent—a combination of bot-assisted and manual processes. However, current process automation initiatives had to be further streamlined to be deemed most effective for the following reasons.
- The fulfillment center laborers were still spending as much as 60% of their time in the picking process alone.
- Inefficient pick path and poor order batching since the existing pick logic and sequence were suboptimal.
- Pick rates were comparatively lower considering industry benchmarks, resulting in increased labor costs.
Solution
We joined forces with the client’s order fulfillment management stakeholders and became acquainted with their partner ecosystem, order workflows, and process automation mechanisms. We observed that most of the pick routes were suboptimal, leading to longer transit durations between pick locations. The pick sequence algorithm overlooked key order flow mechanisms, resulting in inefficient pick paths recommending multiple trips to the same pick-up locations. We introduced a new order-picking system focused on decluttering process efficiency gaps and enhancing labor productivity.
Key Highlights
- Created new warehouse route maps and pick path recommendations to ensure optimal routing for both manual and bot-assisted order picking.
- Developed new algorithms to identify the optimal SKU clusters and produce smart batching, which optimizes order consolidation, and labor allocation while reducing order pick time.
Outcomes
- 22% improvement in overall order pick rate.
- 6% improvement in labor productivity measured in Throughput Per Labor Hour (TPH).
