Order picking, packing and despatch

Problem 1 Problem 2

Problem 3 Problem 4

Problem 5 Problem 6

Problems
Problem 7 Problem 8

Problem 9 Problem 10
 NOT FINDING THE CORRECT
Problem 1 ITEMS IN THE LOCATIONS
 Problem 1

If an item is not where it should be in the warehouse, this means the

picker needs to spend time looking for it. This delays the order
Impact fulfilment, which can lead to an unhappy customer and negative
reviews. On top of that, it also makes for a highly inefficient warehouse
operation.

With a warehouse management system (WMS), every item is scanned

How to solve it? into a location. This means that when a picker is looking for an item, it
will always be exactly where it should be.
 PICKERS MAKE MISTAKES WHICH
Problem 2 MEAN THE WRONG ITEMS OR
QUANTITIES ARE PICKED
 Problem 2 – I

If the wrong items or quantities are picked, time is wasted at the pack bench
where, hopefully, the error is noticed. If the fault is not realised, the wrong
items are despatched which will then require a refund or replacement. As well
as costing money, it also paints a poor picture of your brand.

Impact To calculate the cost of those mispicks, multiply the number of mis-shipments
per week by the cost of a mis-shipment and you will see how much money is
wasted. When calculating the cost of a mis-shipment, don't forget to consider
shipping costs, returns costs, labour time to re-pick, customer service work,
and time spent rectifying bad online reviews.
 Problem 2 – II

Get goods-in right first time by scanning everything. Using barcode

scanners in your e-commerce warehouse should make it impossible to
pick the wrong item or the wrong quantity. With every incorrect pick,
the scanner will create an error message, alerting the picker to their
How to solve it? mistake.

As a final check for orders that have been picked in a batch, you may
also benefit from scanning the items again at the point of despatch to
ensure you match the right items to each shipping label.
Problem 3 YOU HAVE PAPER-BASED PICKING
 Problem 3

With this kind of operation, paper must be printed and carried with the
Impact picker. This is not only a lengthy process, it is also highly inefficient and
leaves a large margin for error due to lost or unfulfilled orders.

Quite simply: eliminate paper from your warehouse by using

warehouse management software with a mobile app. The mobile app
replaces the paper, a bit like your mobile phone replaced the
How to solve it? handwritten letter. When you remove the room for human error, you're
in a good position to ensure that you're able to ship every order on
time, and accurately, without fail.
 NO PRIORITIZATION WHEN
Problem 4 PICKING
 Problem 4

If your orders are not prioritised then often the most recent sales order
Impact items are picked first by default. This can mean that older orders or
more important orders are neglected or delayed.

To solve this problem, you should find a suitable method for sorting
How to solve it? your warehouse orders. Once you have a method in place, no priority
order will be left over at the end of the day.
 LABOUR-INTENSIVE PICKING -
'WE'VE ALWAYS HIRED MORE
Problem 5 STAFF AS WE'VE GROWN AND
THIS CAN'T GO ON FOREVER.'
 Problem 5 – I

If you have too many pickers working at the same time, you will likely
be spending more money on labour than you are getting back in return.
Impact Overtime is starting to creep in and sometimes deadlines for fulfilment
are missed.
 Problem 5 – II

The most efficient way to reduce the number of pickers needed for a single
shift is to introduce automation into your warehouse. Automation should
improve the efficiency of all your pickers, meaning that fewer of them are
needed to fulfil the same amount of orders. A watches and jewellery retailer
client of ours saw a 75% increase in picks per person per hour when using a
WMS.
How to solve it?
A good idea is to benchmark your picking against industry standards. 100 items
per picker per hour for small e-commerce order picks is a steady benchmark.
Additionally, with automated processes, you'll be well set up to take the panic
out of peak periods. With a WMS that's easy-to-use and easy-to-train, you can
get temporary staff working on the warehouse floor within minutes.
 NO DESIGNATED LOCATION FOR
Problem 6 HALF-PICKED ORDERS
 Problem 6 – I

Orders that are only half-picked are generally put back if the remaining
items are not available, and fulfilment is postponed. Doing this leads to
unhappy customers and potential negative reviews. However,
despatching half-orders increases your overall shipping costs.
Impact
If you often find that your systems say you have an item in stock when
you don't then forget Amazon and eBay. They will take you down if you
fail this fundamental test. We have known eBay Power Sellers who have
lost over £100k in revenue because of this.
 Problem 6 – II

The ultimate solution is to manage your allocation properly which

means orders are only half-picked if you're happy to do a partial
shipment. This is a business decision that can be set as a rule or
reviewed against each order that can't be fulfiled.
How to solve it?
Your e-commerce platform is unlikely to give you this. Without it, half-
picked and cancelled orders will be routine. With the right warehouse
workflows in place, you'll be able to improve warehouse efficiency for
good.
 YOU HAVE FIXED LOCATIONS -
'EVERY ITEM HAS ITS PLACE,
EXCEPT WHEN THAT SPACE IS
Problem 7 FULL, THEN IT'S STORED IN THE
OVERSTOCK
LOCATION...WHEREVER THAT IS...'
 Problem 7 – I

Having fixed locations eliminates the potential for flexibility to allocate

high-demand items closer to the pack bench when necessary. It also
means that warehouse space is not fully optimised, costing money and
resources.

Impact
Inefficiency here usually means replenishment is made into a bigger
issue, which itself results in more manual data entry to make stock
location and inventory changes. The ultimate sign this is costing you is
continuous stock takes that the team rely on for accurate inventory
updates.
 Problem 7 – II

Introduce a WMS that allows for dynamic locations. This will mean that
you can put multiple stock keeping units (SKUs) in one location, as well
How to solve it? as putting single SKUs in multiple locations. By doing this, you will make
much better use of the space in your warehouse, save money and
postpone the need to move to a larger site.
 YOU ARE RELIANT ON PEOPLE
REMEMBERING WHERE THINGS
ARE IN THE WAREHOUSE - 'MY
Problem 8 WAREHOUSE TEAM KNOW
EXACTLY WHAT IS WHERE.
CONTRACTORS AND TEMPS
NEVER SEEM TO WORK OUT.'
 Problem 8

Time is required to train pickers on the layout of the warehouse. When

peak season hits and temporary staff are taken on, the same training
Impact cannot be afforded. Having this reliance on your pickers to know where
everything is will cost time and money without providing a sufficient
return.

With a WMS, the location of every SKU should be recorded. This means
that when an item needs to be picked, the location is shown on the
How to solve it? mobile app, eliminating all need for pickers to memorise the locations.
This also means that temporary pickers can start using the system
immediately, without the need for involved orientation.
 PICKING ONE ORDER IN ONE PICK
Problem 9 RUN
 Problem 9

This is an inefficient process that wastes valuable time and resources. It

Impact also makes the order fulfilment longer leading to dissatisfied
customers.

The reason that one order is generally picked in one pick run is because
it is printed on a sheet of paper. However, by eliminating paper and
using WMS workflows instead, pick runs can be devised in the most
How to solve it? efficient manner, which can often mean multiple pickers pick items for
one order as part of a batch run. The order is then combined at the
pack bench, saving time and resources.
 YOU CAN'T TRACE WHO HAS
Problem 10 PICKED AN ORDER
 Problem 10

No accountability in a team is divisive, demotivating, and hard to mange. Your

warehouse manager needs to be in the thick of it to have his pulse on
productivity and even then he's open to personal bias. Not having this kind of
Impact visibility means that you are unable to assess the efficiency of your staff, as
well as tracking the progress of an order. This means that you can't
communicate with the customer regarding the status of their order.

A suitable WMS with focused e-commerce workflows should provide you will
full visibility on all inventory movements, including which member of staff has
How to solve it? performed each action. You need this focus in order to have full control over
your warehouse processes and to eliminate warehouse chaos for good.
Warehouse management system (WMS)
Definition

 It tracks materials from

 Receiving to shipping
 Manages warehouse activities and inventory
 Processes or generates business data and information

 Stand alone or part of an ERP system

Benefits
 Real-time stock visibility and traceability
 Improved productivity
 Accurate stock
 Reduction in mis-picks
 Automatic replenishments
 Reductions in returns
 Accurate reporting
 Improved responsiveness
 Remote data visibility
 Improved customer service
 Minimized paperwork
Selecting the right WMS

 Form a project team  Research and approach a select number

 Define, record, review and improve of vendors and select a small number
current processes. Don’t automate with experience of providing solutions for
redundant or poor processes your market sector
 Visit reference sites to look at
 Create a list of key functions required of
operational effectiveness and discuss the
the new system
benefits the WMS system has brought
 Incorporate any future growth plans in about since implementation
your specification
 Produce a return on investment (ROI)
 List the benefits to your company of a report
WMS
Case study
LPT, the Liverpool-based fresh-produce terminal, has partnered with ATMS, its WMS provider, to help to bring the ATMS GlobalTrack
service to market.

The ATMS STP WMS is a key part of LPT’s operation, helping to optimize the receipting, warehousing and despatching operations. LPT’s
warehouse is a state-of-the-art, brand new, temperature-controlled facility with 5,000 locations and caters for cross docking as well as
added-value services. ATMS’s system supports and optimizes all of these processes, including dock, yard and vessel management.

‘LPT needed to go one step further to provide a level of service for its customers far ahead of anything in the market place,’ states
Andy Rickard, operations director of LPT. ‘One of the reasons we selected ATMS was because of their strategy of developing their WMS
to become the core of a global tracking and supply chain visibility offering – in the form of GlobalTrack; we’re very pleased to be one of
the first companies to work with them to prove the benefits of GlobalTrack in the real world.’

Stephen Cross, ex-managing director of ATMS plc, says: ‘GlobalTrack is a hosted solution that provides improved control and visibility
across the supply chain. It is designed to be exceptionally easy to use and exceptionally low cost; for instance, users can pay for system
usage on a per transaction, pay as you go basis. It is fully multilingual and is supported by offices in UK, Dubai, Singapore, China and
Manila.’

The system helps users improve the control of their import-tracking process. Order and fulfilment requirements can be logged onto
the system. The system then allows producers and manufacturers, wherever they are in the world, to log their production and
productivity against these orders and call-offs. A facility is then provided for remote labelling of cartons, pallets and unit-load devices.
Labelling is
carried out to the global GS1 standard, the barcode on each label is unique and identifies the carton, pallet or other item and its
contents; the system records quality, traceability and other conformance information. Pack sizes, weights and dimensions can also be
recorded. The system can then be used to generate and share packing lists, manifests and advanced shipping information. Information
can also be provided to and from customs authorities, freight forwarders and logistics providers.
Pre-labelling and electronic advanced shipment notices help LPT receive stock accurately and swiftly. Any errors are alerted
automatically.

The system not only assists the upstream operation but can be used downstream as well, from the point of despatch from LPT, through
re-warehousing and crossdocking operations, to proof of delivery. GlobalTrack supports proof of delivery and has a remote warehouse
control module that allows warehouses to be controlled with the use of hand-held terminals communicating over mobile phone GPRS
networks.

The system is designed for in-house and third-party use – for instance, the system is designed to allow clients of third-party logistics
providers to view their own stock and their own supply chain information – and only their own. Information visible across the web
includes production information, receipt and despatch information, stock status, quality control status. Documentation can be
downloaded remotely. Stock call-offs and other action requests can be entered remotely.

David Hughes, who heads up business development at ATMS, comments: ‘We are proud to be a strategic partner of LPT. They are a
highly innovative operation with a superb management team, with the dedication and focus to deliver a first-class service from a first-
class facility.’

James Woodward, managing director of LPT, comments: ‘LPT is in a unique position geographically to reduce customer costs whilst
reducing their carbon footprint and now is in a unique position technologically to provide the highest levels of visibility, traceability and
control.’
Warehouse layout

 Inadequate Goods Inward Space

 No Thought Given To Picking Paths
 Warehouse Workers Not Consulted
 Inadequate Future Planning
 Forgetting Some Operational Requirements
 Inefficient Racking Placement
Warehouse management problems

 Accidental redundancy
 Messy warehouse layout
 Bad inventory management
 Poor preparedness for seasonal demands
 Unsatisfactory order management
 Excessive spending on labor
 Poor damage control
End of the lecture