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The Order Batching Concept Implemented In Real Smart Warehouse

Conference Paper · October 2020

DOI: 10.23919/MIPRO48935.2020.9245256

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 The Order Batching Concept Implemented In
Real Smart Warehouse
1,2 2,3 1
S. Delalić , E. Žunić , A. Alihodžić1 and E. Selmanović
1
Faculty of Science, University of Sarajevo, Sarajevo, Bosnia and Herzegovina
2
Info Studio d.o.o., Sarajevo, Bosnia and Herzegovina
3
Faculty of Electrical Engineering, University of Sarajevo, Sarajevo, Bosnia and Herzegovina
Email: delalic.sead@pmf.unsa.ba, emir.zunic@infostudio.ba, adis.alihodzic@pmf.unsa.ba, eselmanovic@pmf.unsa.ba

Abstract - Distribution companies often store goods in
large warehouses. Orders are collected and prepared for
transport. Large-scale warehouses are often divided into
sectors. Each worker collects a part of the order from the
assigned sector. In that case, workers often pick small orders
and the process is not optimal. Therefore, order batching is
done, where one worker collects multiple orders at a time. In
this paper, an innovative concept of orders batching in a
warehouse with a 48-hour delivery based on a metaheuristic
approach is described. The algorithm divides each order by
sectors. An analysis of each part of the order is done and the
possibility of batching based on the order content is checked.
The order batching is based on the discrete Bat algorithm.
The transport scheme and the order of loading goods into the
truck are observed. In the order picking process, a number
of standard constraints such as weight and item priorities are
considered. The concept has been implemented and tested for
50 days of warehouse operation in one of the largest
warehouses in Bosnia and Herzegovina. The algorithm is
compared with the earlier approach of collecting orders in
the warehouse, and significant progress has been observed in
the number of kilometers traveled on a daily basis.
Keywords - Order Batching; Order Picking; Smart
Warehouse Concept; Large-Scale Warehouse; Bat algorithm
I. INTRODUCTION
The workflow of distribution companies consists of
several significant processes. Companies order large
quantities of goods from manufacturers and store them in
the warehouse. Shopping centers, markets and other
customers order goods from a distributor. The goods are
collected from the warehouse, packed for transport, and
delivered to customers.
The operation of the warehouse also consists of several
processes, such as the process of recording and arranging
goods at the entrance, the process of goods relocation
within the warehouse, and the process of collecting goods
after orders are received. When the orders are collected,
items are controlled and placed on the final location for
transportation. Each of the above processes in the
warehouse can be optimized. Of all the above processes,
the process of collecting orders takes the most time. This
process is usually referred as the order picking and based
on [1], the retrieval of goods takes about 55% of the
operating costs.
The goods are stored in pallets in the warehouse. The
pallet places are arranged on racks that can consist of
multiple floors. The part of the warehouse where workers
can collect goods without the use of forklifts is called the
picking zone, while the other zone is called the stock zone.
Between the racks, there are aisles. Workers usually walk
through the aisles and collect the required items to complete
the order. As the orders usually consist of a large number
of items, workers use carts for easier transport of goods.
A large number of customers are served from the
warehouse on a daily basis. Orders may contain items
located at different locations in the warehouse. Therefore,
the order picking process can be a tedious process for one
worker. To simplify the process of collecting goods,
various solutions are available. One of the most common
solutions is the division of the warehouse layout into
sectors. Sectors are formed by article type or based on
physically separated rooms, such as temperature chambers.
Although the division into sectors has several
advantages, such as reducing psychological pressure for the
worker, and the fact that workers collect items in a smaller
part rather than in a complete warehouse, division into
sectors does not improve the efficiency in the order picking
process. After division, it is common to find a small number
of items in a sector. Workers then go through the sector to
collect only several items, and these new orders are not
balanced.
One of the most efficient approaches to order picking
optimization is to merge multiple orders within a sector. In
order for this process to be feasible, it is necessary to have
a cart with separate boxes for collecting multiple orders.
The rest of the process is no different from collecting orders
that are not merged. The process of collecting multiple
orders at once is called the order batching. One example of
the order batching is given in Figure 1.
Figure 1. Order batching in the warehouse sector (a) first order (b)
second order (c) batch
 This paper describes the concept of order batching
implemented for some of the largest warehouses in Bosnia
and Herzegovina. Warehouses are divided into sectors and
the process is adapted to the way warehouses operate,
although the same process can be used in warehouses not
divided by sectors. In this case, the entire warehouse can be
seen as one sector. The warehouse has a 48-hour delivery
system, where customers place their orders one day;
workers collect orders the next day and transport them a
day later. The algorithm for order batching is based on the
Bat algorithm.
The paper consists of five sections. In the current
section, a short introduction is given and the common
processes in the warehouse are described. In the second
section, a related work is described. In the third section, the
implemented concept based on the Bat algorithm is
described in details. In the fourth section, the results are
given, such as the comparison between implemented
algorithm and one of the most widely used practice
approaches. In the final section, a conclusion and future
work are observed and described.
II. RELATED WORK
In the paper [2], the concept of smart warehouse and
processes that can be optimized are presented. The
observed warehouses are picker-to-parts systems, where
the picker walks through the warehouse and collect orders.
In larger warehouses, it can be a tedious job and orders are
split up into smaller ones. There are multiple approaches
to divide an order, such as solution based on Ant Colony
Optimization presented in [3] or simply by dividing the
order after the picker route is created. However, in
practice, simple division into sectors is most commonly
used and easiest to implement among pickers. The smart
product positioning can increase the order picking
efficiency [4].
One of the most important factors for optimizing
warehouse operation is the arrangement of storage racks
and aisles. In practice, standard and traditional layouts
consist of racks that are lined up in parallel. The aisles are
lined up and they pass through the middle of the
warehouse. In paper [5], Flying-V and Fishbone layout are
proven to have advantages over traditional layouts. In
practice, some other non-standard layouts are encountered,
and it is essential to deal with them when planning
warehouse operations. In those layouts, racks are not
always parallel and aligned to start from the same position.
The problem of optimal order picking can be reduced to
the process of solving the Traveling Salesman Problem.
This problem largely depends on calculating the distance
in the warehouses. One approach for calculating distances
in the warehouse of general layout is described in [6]. The
algorithm is based on dynamic programming and the
efficient use of this algorithm is necessary for the order
batching process and the testing phase.
In [7], the order batching and zoning problems are
defined. Many benefits of using mentioned approaches
together are also described. The order batching problem is
a well-researched area in the literature as significant cost
savings can be achieved through process optimization.
Many different approaches have been developed and
described. As mentioned earlier, there are two standard
batching types: static (off-line) and dynamic (on-line).
When orders are not known in advance, the batching is
called on-line. Benefits of the integrated routing and order
batching are described in [8]. This paper focuses mainly
on static warehouses with 48-hour delivery, where the
orders to be picked are known in advance.
In the paper [9], a comprehensive description of the
problem and a classification of the solution algorithms are
given. The order batching in the NP-hard problem, so
many heuristics are implemented. These solutions can be
classified into constructive solution approaches and
metaheuristics. Priority rule-based algorithms, seed
algorithms, saving algorithms based on the Clarke and
Wright algorithm and data mining approach belong to the
first group of solutions. These approaches are mostly
simple to implement, but at the same time make significant
savings in the ordering process. The second group includes
various metaheuristic approaches such as Local search,
Tabu search or population-based approaches such as
genetic algorithm (GA), which can lead to additional
savings.
In the literature, many other metaheuristics are used for
order batching. Iterated Local Search and Attribute-based
Hill Climber are used in [10]. The last approach is based
on the Tabu search. Mentioned approaches can improve
picking process by 46% on average compared to the
standard constructive heuristics. In the paper [11], and Ant
Colony Optimization was implemented and compared to
the Iterated Local Search approach. In the paper [12], the
GA is used to solve the batching problem for different
warehouse layouts. Similar approach is described in [13],
where the grouping GA is implemented.
In the [14], a heuristic algorithm based on a general
graph model is described and implemented in the
warehouse for the large e-commerce business in Central
Europe. In the paper [15], a simulated annealing algorithm
combined with the A* algorithm is implemented. The
algorithm produced results that are 1.2% far from the
optimal. The algorithm was tested in a Finnish warehouse
and this algorithm has made a saving of 5000 kilometers
in distance traveled in 3 months (~16%). Simulated
annealing and genetic algorithm were also used to solve
the order batching problem in [16].
Many nature-inspired metaheuristics are developed.
Algorithms often mimic swarm traits and the collaboration
of individuals. The algorithms are based on directed search
of the solution space, which can be significantly reduced.
Some of the most famous algorithms are Particle Swarm
Optimization (PSO), Ant Colony Optimization (ACO),
Artificial Bee Colony (ABC), Bat Algorithm (BA), Firefly
Algorithm (FA), Elephant Herding Optimization (EHO)
and others. Some of these algorithms and their properties
are described in detail in [17].
III. CASE STUDY
This paper describes the complete order batching
concept implemented as part of the warehouse management
system (WMS) in some of the biggest warehouses in
Bosnia and Herzegovina. The complete workflow consists
of several steps, as shown in Figure 2.
Figure 2. The order batching concept
A. Customers make orders
Distribution companies usually have customers who
regularly place orders. Traveling salesmen visit customers
[18] and collect orders or they are placed online. In any
case, orders are saved in the WMS. The warehouses operate
on the principles of 24-hour or 48-hour delivery. Observed
warehouses operate on a 48-hour delivery principle, which
means that orders are created on the first day, collected on
the second, and transported on the third day. Therefore,
orders are delivered to customers within 48 hours. The
above practice allows off-line order batching principle to
be used, as the orders that are collected are known in
advance. The concept can also be implemented in 24-hour
warehouses with minor modifications to work
organization.
B. Vehicle routing
The biggest financial cost in the process of delivering is
transporting the goods from the warehouse to the final
locations of the customers. Therefore, the priority process
that needs to be optimized is the process of routing transport
vehicles, determining which vehicle should visit which
customer, and in which order the customers are visited in
the route. As part of this process, many constraints such as
time-windows, vehicle capacity, and driver working hours
must be respected. The ultimate goal is to create the most
cost-effective routes. In the literature, the mentioned
problem is called Vehicle Routing Problem (VRP). VRP is
one of the most difficult problems of combinatorial
optimization in the literature. In the smart WMS concept,
the transport optimization is a separate application module
that allows routes to be created by the transport manager
and allows manual modification of the routes created. At
the end of the process, the final driving routes are created
and the preparation of goods for collection and transport
begins.
C. Order splitting
When the orders are stored in the WMS and when the
transportation routes are created, orders are divided
according to the established principle. In practice, orders
are most often divided by sectors. This concept implies
division based on previously defined sectors.
For each article, the sectors has to be defined. In
practice, this concept allows two ways to determine sector
for each item. In the first case, articles are in fixed sectors
such as “food”, “cosmetics” etc. In each order and in any
moment, the article is in the same sector. In the second case,
the sector can vary for article in different moments. In some
warehouses, sectors are created based on the physical
location of racks. This means that sometimes sectors can be
determined only in the moment when the order splitting
process begins. In this case, the location (pallet place) from
which the item will be collected is determined. Then the
item sector is taken to be the pallet place sector.
Each order is divided by sectors and smaller orders are
created and labeled. As the process continues, the system
only observes newly created orders.
D. Order batching
The process of order batching is the main process to be
described in this paper. In this paper, the order batching
problem is solved using the metaheuristic Bat algorithm
(BA). To our knowledge, this is the first use of the Bat
algorithm to solve the order batching problem in literature.
The Bat algorithm was developed in 2010 and it
belongs to the group of nature-inspired metaheuristic
algorithms for global optimization. Algorithm was
developed by Xin-She Yang [19]. The algorithm was
inspired by the behavior of microbats. Microbats have
special echolocation behavior that can be presented through
a series of rules implemented as part of the algorithm. In
nature, bats send pulses into the environment with the
primary purpose of hunting and navigating through space.
After that, the bats listen to the echo and, based on the
signals they receive, determine their location, location of
obstacles and prey. The main inspiration for the bat
algorithm is the ability for each individual to find the best
area of the search space of all the bats in the swarm, and
direct their movement toward that area.
Although the Bat algorithm is primarily intended to
solve problems in the area of continuous optimization,
many examples can be found in the literature where the
algorithm is used to solve combinatorial optimization
problems. In these cases, a modification of the original
algorithm is required. In paper [20], an improved discrete
Bat algorithm is used for symmetric and asymmetric
Traveling salesman problem (TSP), which is one of the
most important problems in the field of combinatorial
optimization.
This paper is inspired by the use of the Bat algorithm to
solve the Traveling salesman problem, and in a similar way,
the order batching problem is approached. The complete
pseudocode for the implemented approach is given in
Algorithm 1.
Algorithm 1 The modified BA for Order Batching
function runBatAlgorithm
begin
Define the objective function 𝑓(𝑥)
Initialize the bat population 𝑋 = 𝑥 , 𝑥 … 𝑥
Find the best bat in population 𝑥
for each bat 𝑥 in the population 𝑋 do
Initialize the pulse rate 𝑟
Initialize the velocity 𝑣
Initialize the loudness 𝐴
end
repeat
for each bat 𝑥 in the population 𝑋 do
Generate new solution
Generate the random number 𝑟𝑎𝑛𝑑
if 𝑟𝑎𝑛𝑑 > 𝑟 then
Generate solution around the best bat
end
if 𝑟𝑎𝑛𝑑 < 𝐴 and 𝑓(𝑥 ) < 𝑓(𝑥 ) then
Accept the new solution
Increase 𝑟
Reduce 𝐴
end
end
As shown in the pseudocode, the implemented Bat
algorithm has been modified from its original form. Each
part of the algorithm should be tailored to the discrete
version, and it must reflect the core of the problem being
solved. Each bat represents one solution. The solution is
represented by the order schedule in each batch. Each order
belongs to exactly one batch.
First, the objective function has to be determined. The
objective function is the function that has to be minimize in
our implementation, and when the function is minimized,
the solution is acceptable (and ideally optimal). The main
goal is to decrease the walked distance for pickers. Because
in the batching process for one vehicle, the number of
locations to be visited can increase up to 1000 or more
different locations in the sector, the distance calculation
between each two location in the warehouse is not an easy
and fast task. In addition, in every execution of the goal
function, it would be necessary to solve the TSP problem
for optimal order picking. In this paper, the objective
function is calculated in a different way.
As part of the objective function, limitations are
included. First, the number of boxes in a picker cart is
limited. The picker is not able to collect more than a
constant number of orders at the same time. The volume
and mass of orders are limited, so the complete batch
cannot exceed the parameters determined by the cart size
and capacity. Because the total tour length is not calculated,
the goal is set to visit the minimum number of racks in a
batch, and at the same time to visit the minimum number of
racks for all orders. For each rack, the goal is to minimize
the distance between the farthest pallet locations. This way,
a fast and easy-to-implement objective function is created,
but the objective function that guarantees that the walked
distance is reduced.
In the case of fewer locations, the goal function can be
calculated as a solution to the TSP problem for a set of
locations. In doing so, a simple 2-opt algorithm can be used
to solve the TSP problem. In any case, this can be a
challenging task because of the number of invocations of
the goal function during the Bat algorithm.
When the objective function is determined, the
population is initialized. The initial population was created
by shuffling all orders, and shuffled orders were added to
the batch until the batch capacity was filled. When one
batch is filled, a new batch is created. This process
continues until all orders are assigned to a batch.
The best bat in the population is determined as the bat
with best objective function value. Pulse rate and loudness
are determined by the standard formula used for the BA. At
the same time, the velocity for each bat has to be
determined differently. The velocity of a bat depends on the
distance between the best bat, and the velocity in the
previous iteration. Each order is placed in one batch in one
population. Let 𝑎 and 𝑏 be the bats between which the
distance is calculated. For each order, a corresponding
batch in the bat 𝑎 and 𝑏 is checked. For each order in the
observed batches, if they are not contained in both observed
batches, the distance is increased by a constant value.
One of the steps is to generate new solution from the
existing one. When generating the new solution, one of
three methods with equal probability is used:
 two randomly chosen orders swap batches;
 one randomly selected order leaves the batch and
creates a new one;
 one randomly selected order leaves the batch and
joins another;
The process of increasing pulse rate and reducing
loudness is implemented in a standard way by the formula
given in [19] and [20].
At the end of the process of order picking, the best bat
is selected and used as the final solution.
E. Order picking
When the orders are divided into smaller orders, and
when the smaller orders are batched, the worker gets a list
and order of the final locations to visit. For each location,
the item information and associated order within the batch
are listed. The worker then walks through the aisles and
pick items into the appropriate box. Each box is labeled
based on the original order and contains only items from
the corresponding order.
When all locations are visited and when orders are
picked, workers leave the collected orders at the designated
loading points and start collecting the next free order.
As stated earlier, orders are collected for one vehicle for
ease of control. When all orders for one vehicle are picked,
the controller checks that all items have been correctly
collected and placed in the appropriate lading location. The

TABLE I. RESULTS OBTAINED FROM REAL-WORLD WAREHOUSE
Observed property Value
Number of days and orders 50 / 8200
Average number of orders per vehicle and day 28.38
Total tour length for APP1 2068.4 km
Total tour length for APP2 955.2 km
Total tour length for the Bat algorithm 802.3 km
Average BA route length improvement over APP1 61.2%
Average BA route length improvement over APP2 16.01%
cost of the controller does not increase the cost of
warehouse operation, as the controller is obliged to control
all outbound orders regardless of the earlier collection
process.
F. Transport
The day of delivery begins with loading of prepared
orders into previously specified vehicles. The vehicles
follow the routes created and deliver orders to end
customers. This completes the 48-hour concept, which
consists of creating routes for routing vehicles, splitting
orders, merging orders into batches, collecting batches
based on created routes for vehicles and the delivery
process.
IV. RESULTS
In this section, results of the previously described
algorithm for the order batching and the complete concept
are described. The concept described has been introduced
gradually in the smart WMS. First, the order picking
process was optimized and the algorithm for finding the
optimal picking route was implemented. Then, the vehicle
routing problem was introduced, and the complete process
of transport optimization, including the tracking system and
VRP solver improvements. When larger warehouses were
introduced, few approaches for the order splitting process
were implemented. The process of dividing orders into
sectors is mainly used because it is easiest to implement and
deploy among workers in warehouses. At the same time,
other algorithms described in [2] are implemented in the
complete concept of smart warehouse.
During the process, various and useful information
about the processes in the warehouse is collected. Some of
these are information about order details, order splitting and
picking process details etc. The order batching algorithm
was introduced as the last improvement of the complete
warehouse management system.
The results of the concept implementation have been
tested in one of the largest warehouses in Bosnia and
Herzegovina. The observed warehouse serves several
hundred customers daily. Once transport routes have been
created, each vehicle delivers orders for up to 30 customers.
Due to time constraints and limited capacity, the vehicle is
not able to visit more customers. Once transport routes have
been created, each vehicle ships orders for up to 30
customers. Due to time constraints and limited capacity, the
vehicle is not able to visit more customers.
The observed warehouse is divided into six sectors.
Each sector is created based on the type of items stored in
it. After the division of orders into sectors, the number of
orders increases. However, the number of orders cannot be
increased for each sector. In the next step, the merging of
orders for each vehicle and sector is approached.
Bat algorithm for the order batching process was tested
on different vehicles and sectors through 50 days of
warehouse operation. More than 280 vehicle routes and
8200 real orders were observed during the testing phase.
When implementing the bat algorithm, it is necessary to
adjust the parameters. The population size is set to be 50.
Initial loudness for each bat is set as a random real number
between 0.7 and 1. The initial value for pulse rate was set
as a random number between 0 and 0.4. Values α and γ
where set to 0.98. The bat algorithm was run exactly 10
times for each instance. The maximum number of iteration
was set to 30 000. The best result is further processed.
The algorithm assumes that four orders can fit in one
cart at a time, and that the total mass of coupled orders is
less than 100 kilograms. The volume is neglected due to the
dimensions of the carts and the dimensions of standard
orders in the warehouse.
The algorithm results were compared with two other
approaches. In the first approach, the orders were not
batched (APP1). In this case, the performance of the
warehouse was compared before and after implementing
the order batching algorithm. Orders were collected one by
one. In the second approach, orders are sorted by creation
time and batches are created by a simple rule: orders are
added to the batch until the batch is full, in which case a
new batch is created (APP2).
After the batches were created using all three
approaches, an algorithm was used to find the optimal order
picking route in the warehouse and the total length of the
routes obtained were calculated. A comparison of the
obtained values was made. For testing, an algorithm was
implemented that optimize the order picking process. The
route starts from the position of taking the order
documentation and ends at the final place for the order
picking process (place marked for loading in vehicles).
Complete results are shown in Table 1. As we can see,
the first approach is less efficient than other two. This was
to be expected, because the order batching has the main
goal to reduce the walking route length. The length of
routes obtained in the case of separate collection of each
order can be reduced by more than 50% in the case of
multiple orders being collected simultaneously.
In approximately 97% of tested cases, the Bat algorithm
performed better than the APP2 algorithm. The total path
length for collecting the tested orders was 16.01% shorter
for the BA than the path length for collecting the same
orders using the APP2 algorithm.
The Bat algorithm has shown stability in the solutions
obtained. Deviations from the best results were rare for
different runs. It has been observed that the algorithm often
View publication stats
finds the best solution when the number of iterations is
greater than or equal to 20,000.
As part of the test, 11 different vehicles were used,
including smaller transport vehicles and trucks. Of course,
the amount of goods and the number of orders required to
collect depends on the size of the vehicle. For the 50 days
observed, the average number of shipment orders was
164.13.
In the case of non-batching orders, the total length of
the picking routes to collect all orders in observed 50 days
is about 2068 kilometers. In the case of APP2 approach,
significant savings are achieved, with a total length of just
over 955 kilometers. In the case of merging orders based on
the Bat algorithm, additional savings of 153 kilometers
over APP2 are achieved. Compared to the previously used
APP1, it is possible to achieve savings of up to 60% using
the Bat algorithm.
After a thorough analysis of the proposed routes based
on the Bat algorithm, it was found that the routes are
practically usable and that they give satisfactory order
batches. Due to the number of combinations, it has been
noted that the routes obtained are difficult to test even for
experienced workers and managers.
V. CONLUSION
The paper describes the warehouse processes starting
from the concept of accepting orders, through the concept
of collecting orders, all the way to packaging and transport.
The focus of the paper is the concept of batching orders
implemented at picker-to-parts manual warehouses in
Bosnia and Herzegovina. The paper offers an innovative
approach to the warehouse operation process and
optimization of the most challenging order picking process.
The algorithm is based on the nature-inspired metaheuristic
Bat algorithm. The results of the implemented process are
satisfying and the concept gave good results in practice.
The problem of order batching is one of the problems
whose improved results can produce significant savings in
the speed of the warehouse operation process. Optimal
work establishment can also improve employee
satisfaction, further enhancing the importance of order
batching.
Future research will focus on implementing and testing
other nature-inspired metaheuristics to solve the order
batching problem, such as firefly algorithm, elephant
herding optimization etc. In addition, the objective function
will be further modified so that the implemented bat
algorithm can produce even better results. Other ways to
optimize warehouse performance and improve workflow
will be researched.
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