Order processing is a workflow that includes picking, and packing an item to prepare it for shipping. A pick-and-pack warehouse, also known as a distribution center (DC) is a necessary component for order fulfillment. Pick, pack and ship processes have wide variations in the degree of automation, ranging from completely manual, paper-driven workflows to fully automated, mechanized systems governed by a Warehouse Management System (WMS).
Successful e-commerce fulfillment requires DCs to do much more than simply organize their products neatly onto shelves, as the pick, pack, ship process is both an art and a science. The right software is essential for throughput of orders with maximum speed and efficiency.
In this comprehensive guide, you’ll uncover the step-by-step process, essential methods, warehouse organization strategies, and best practices to effectively execute the pick, pack, and ship process in your e-commerce business. Read on to learn more.
Pick, Pack Ship Steps
Pick-and-pack services include the three primary steps of picking, packing, and shipping, whether you use a third-party logistics (3PL) provider or perform fulfillment yourself.
Step 1: Picking
Pickers source products from a DC when fulfilling a batch of orders. A single picker may be responsible for picking products for the entire inventory, depending on the scope of the brand and size of the warehouse. For larger companies, multiple pickers may be assigned to their own picking stations in separate zones, helping to optimize order fulfillment.
Some e-commerce businesses utilize kitting fulfillment services for their products, which combine multiple items into a single unit for sale. This technique is most common for subscription orders consisting of a fixed set of items, such as a book series or a collection of beauty products. Some brands routinely use kitting fulfillment, while others only do so for special promotions. This approach is also more efficient during the holidays when many shoppers order the same group of items.
Step 2: Packing
Once pickers gather the products, they’re moved to a packing station. Packers separate items into their individual packaging, which is labeled and prepared for shipment. A lead packer also confirms all items for that order are included in the shipment.
A packer then includes a packing slip before sealing the package and affixes the shipping label to the outside of the package. This step is probably the most important part of order processing, as it contains the order’s tracking information. This data is vital for recovering a package lost or delayed in transit.
Step 3: Shipping
The first step in shipping is to send the package to a shipping bay, where the chosen carrier will pick it up. The DC then marks the order as out for delivery. Shipping is a conceptually simple process, but it requires planning to make it as efficient and consistent as possible. It must also require quality assurance to ensure the shipping department handles each step correctly. Common shipping problems include delays from backorders and missed orders, all of which reduce the probability of future purchases from that customer.
Modern shipping is based on a complex set of factors that determine the best procedures for optimizing operations. While this complexity is traditionally associated only with large businesses, mom-and-pop online stores are using it with increasing frequency to make their order fulfillment more efficient.
The best pick-and-pack method for your business largely depends on its size and products. Companies will often change these methods as they grow and their inventory expands. Standard pick-and-pack methods that companies use to fulfill orders include the following:
- Piece picking
- Batch picking
- Zone picking
- Wave picking
Piece picking involves using one packing slip for the whole order. The packing slip moves through the warehouse as pickers select items from the shelves. Once they have picked all the items for the order, they go to a packing station for packing. Small businesses that only fulfill a few orders each day often use piece picking since it’s the easiest to understand and implement.
Batch picking involves picking orders in groups, generally to reduce the route they must travel through the warehouse. This method works well if you have a large number of orders, especially if they require items from the same part of the warehouse. Batch picking is particularly useful when multiple orders require the same item because it dramatically reduces the time needed to walk between items.
This approach is more common with large businesses, but small companies may also use batch picking. In this case, the company would pick its orders simultaneously each day rather than picking each order as it’s received. Software is often necessary for optimizing the efficiency of batch picking.
Zone picking keeps pickers within a designated warehouse zone, where they only pick items within that zone. These pickers then pass the order to pickers in the next zone indicated by the packing slip. Once the order moves through all the required zones, it moves to the packing station. Zone picking is best for big warehouses, where the larger size justifies the complex coordination needed to perform this method efficiently. Software is essential for managing zone picking.
Wave picking combines batch and zone picking, such that pickers within a zone pick items for batches of orders. Once all the items in that zone have been picked for all the orders in that batch, the entire batch is passed to the next zone.
The way in which items are stored in a warehouse is also a critical factor for maximizing the efficiency of order fulfillment. Several such methods exist, each with its own set of pros and cons. Warehouse organization schemes include the following:
- Like with Like
Like with Like
The “like with like” inventory method means that similar items are stored physically close to each other. For example, all the blue dresses of a particular type would be stored together, sorted by size. Red dresses of that type would be stored next to the blue dresses, also sorted by size. This organization method is easy to understand and is the one most people use at home. As a result, most businesses start out with their inventory organized in this way.
However, the “like with like” approach also has disadvantages, especially as the inventory increases. For example, putting all dresses of the same color together increases the probability of a picker selecting the wrong size. Even if pickers catch their mistake, they must return the item to the shelf and pick the right one. In the worst case, the wrong item will be shipped, resulting in customer dissatisfaction.
The “like with like” inventory management system requires slower picking to maintain accuracy, decreasing profits. Maintaining picking speed in a larger warehouse requires a more chaotic approach.
Chaotic inventory management involves placing items in random locations in the warehouse as long as they aren’t next to similar items. This approach greatly reduces the chances of pickers selecting an incorrect but similar item by mistake, which is one of the most common causes of shipping mistakes. Chaotic inventory management requires software to make this method work efficiently since software is now needed to map the location of items in the warehouse. This software can also indicate the most efficient route for pickers to reach each item. In addition, the packing slip must include the item’s location.
Class-based inventory storage groups items into classes based on a shared attribute, such as packing requirements. This is a common way of classifying items, allowing pickers to group items that don’t need an overbox. Another option is to group items that need the same packing material, such as bubble wrap or kraft paper. Class-based inventory management is often combined with a chaotic approach.
Grouping items according to packing considerations offers several advantages for DCs, such as ensuring a box has adequate infill without adding more than some of the items may need. In addition, this method allows packers to use smaller boxes to reduce shipping charges.
Volume-based storage is another method that’s often combined with a chaotic approach. This system stores items with the highest turnover closest to the packing stations while placing items that sell the slowest further away. Volume-based storage minimizes the distance that pickers need to travel to retrieve items, especially when a small number of items accounts for a large portion of sales.
Pick, Pack, and Ship Best Practices
A few best practices in picking and packing can significantly reduce errors, especially returns and excessive shipping charges.
For example, all packing slips should include infill instructions, allowing packers to quickly fill each box with the proper packing materials. Once boxes are sent to the loading dock after packing, they should be grouped according to the carrier. This practice allows carriers to pick up their packages without needing to identify the ones that are theirs. DC should also use software to calculate the best size for boxes, eliminating the need for packers to guess. In addition, packers should rescan picked items before putting them in boxes to ensure they’re on the packing slip.
E-commerce businesses typically conduct pick and pack operations manually when they first start out, many stories exist of entrepreneurs starting their operation in their own giraffe=ge. At some point during their growth, you’ll usually need to implement a software-managed process, so they can scale their shipping capacity while remaining as lean as possible. Performing your own order fulfillment also allows you to choose a 3PL with greater confidence when it’s time to outsource this function.
Partner with Meyer for Streamlined Fulfillment Operations
Meyers has the experience needed to customize warehousing and distribution services to your needs. We can also support all aspects of your fulfillment operations, including assembly, kitting, packaging, distribution, and inventory management. Contact us today to learn more about how we can help you succeed.