Order preparation is a critical section of transport and logistics. According to various studies, order preparation can account for up to 65% of total warehouse costs. For this reason, companies that prepare shipments must take into account the following basic concepts to improve their results and optimize the necessary costs.
It is also a growing need. Order preparation is gaining importance due to the increase in references in company catalogues, due to the reduction in stocks -which causes more shipments and, therefore, more handling- and due to the decrease in the size of shipments -which It has an impact on more picking tasks and fewer shipments of single-reference full pallets-, fostered by the rise of e-commerce.
What to take into account when preparing orders
The best way to start off on the right foot is to ask yourself what needs you have and how you are going to respond to them with the design of your warehouse. Here you will have several objectives: make the most of the available space, reduce investment in land as much as possible (think about height, calculate how much merchandise and space we are going to need, including the possible growth of the company and customers, in addition to seasonality), make sure there is enough space for the mobility of people and machinery (the use of stackers can help you reduce the space needed between racks) and reserve places for different activities (consolidation, beach, unloading, etc. .).
The types of shelves is another fundamental section. These will depend on the type of merchandise you have, its dimensions and the number of references you handle. Other aspects to consider are whether you work under FIFO parameters (the first merchandise in is the first to leave), LIFO (the last merchandise to enter is the first to leave) or if you or your clients work in batches, which influences handling, or if the pallets or boxes are multi-reference -to which your management software must also be able to adapt-.
Other important factors are:
Storage unit: If your merchandise will be stored on pallets, in boxes or in loose units.
Picking unit: that is, the smallest size to which we take the pick. In some cases it will never get off the pallet, but in others we will go to the box and to the unit.
Number of lines and orders: how many orders we serve per day, how many lines on average an order has and, therefore, how many lines we process each day. These variables will give you a lot of information about the complexity or simplicity of your picking and about your productivity.
Dividing stock into ABC references is one of the tasks that can best optimize your work
In the warehouse, as in the rest of logistics, streamlining is synonymous with success. One of the sections most likely to be optimized and streamlined is the journey of the operators when carrying out picking. The most modern warehouse systems create routes that minimize the distance traveled. The ideal is to start close to the starting location of the warehouse operators, avoid backtracking and end close to the destination area of the merchandise (usually the consolidation and/or dispatch areas).
Among the most rational things in a warehouse is the division of stock into ABC references. This means classifying your references according to their level of rotation, so that you have those that are used the most close at hand and those that have less movement are further away, which will save you meters traveled.
When classifying and deciding which are the fastest access locations in your warehouse, you will have to assess (and measure) from which point it is convenient for you to work at height instead of in a more distant ground position. Also note that this ABC is not set in stone; it monitors its variations over time and also in specific periods -seasons that have more sales of a specific product and in which it goes from being a C reference to an A-.
During the preparation of orders, there are many points where we can save costs: location of the merchandise, placement of the excess once the order has been placed, order processing, necessary packaging tasks, labeling, weighing, measurement, displacement, routing (by destination, by carrier, by type -pallet, package, full load-), etc.
If you want to take advantage of all these opportunities to be more efficient, the first step is going to be to measure how long it takes you in each of them and see what mistakes you may be making. However, sometimes it is not about errors, but about lack of resources. In other words, it is not necessary for you to make a mistake so that going by car from Madrid to Barcelona is slower than doing it by plane, you are simply using a less fast method.
Warehouse management systems and picking aids can be the way to these savings and are not based on solving things that are being done wrong, but on moving on to doing them better.
Being exact is one of the maxims of every warehouse. And from that taste for accuracy will come the benefits of your processes. You will need precision in the information that reaches the operators for the preparation of orders, as well as in the information and files on the products that we have stored.
For example, a hypothetical order for 814 units of a specific reference indicates to the operator how many pallets, boxes, packages and units make up those 814 requested units. To do this, you must have in your system the data of the units per package, the packages per box and the boxes for each pallet of each reference that you store in your warehouse.
Stock accuracy is also key. In other words, what your digital management system indicates is in your warehouse matches what is physically. To find out what your precision is, you can carry out random checks, in addition to recording all the imbalances that are detected during your day to day.
In picking, technological tools are going to make a difference in many cases. Assisted picking is a great help for operators and, although the level of automation can reach very expensive extremes that are not affordable -or profitable- for all companies, the simplest versions are already going to represent a leap in quality.
From the moment the operator receives the order, the system must inform him if it can be carried out in whole or in part. There are companies that will prevent you from terminating an order partially, while others do accept it. This is the case, for example, of e-commerce purchases in which they notify you that a part of the order can go out now but that you will have to wait for the rest. All this must be accompanied by a system that records and updates how we are completing the order, tells the operator where to go and, if possible, designs an intelligent route.
One section in which there are discrepancies is in the review of orders. While there are companies that choose to carry out random samples of orders to verify that they are carried out correctly, others consider that the cost of these reviews is better used and gives more results if it is used to improve picking instead of reviewing it afterwards.
In any case, leaving this debate aside, it is important to avoid double manipulations. In other words, someone other than the person who has to load the merchandise in the vehicles handles the order again.
The possibilities to optimize picking are great. To reduce the number of transits, you can study whether it is more convenient for you to wait until there are several pending orders and that the operator can complete several at the same time. This will prevent repeat visits to the same position in short periods of time, which is inefficient.
You can even try to “force” these efficiencies. You can do it, for example, by offering volume discounts on some references, since you will increase the number of units sold for each operator trip.
We have previously commented that it is desirable that the operator does not have to reverse his path. However, this factor is not the only one to take into account. The weight and the possibilities of raising merchandise are another very relevant aspect when preparing orders. If we are completing a pallet, the heaviest and bulkiest items should be at the bottom, while the smallest and lightest items will be on top. This aspect can also influence the way you order the references in the warehouse.
The displacements can suppose 50% of the total time of the preparation of the order
Phases of order preparation
Although when we talk about order preparation we think directly of the operator picking up merchandise, order preparation has processes before and after that moment, and it is very important to know how to take care of them:
The preparation of an order begins even before your request. First of all, you must have the necessary tools and resources to do it. Software, the type of forklift suitable for your case (order picker, reach truck, stacker…), assisted picking devices (by voice, by light, etc.), designated and delimited areas for each task, materials for packaging, for labeling , etc.
This section, together with the picking itself, is one of the ones that offer the most possibilities for optimization, since it can take up to 50% of the total time. Here we can distinguish between two types of movements: those that are carried out from the different areas to the picking place and, on the other hand, those that are carried out between the different products of the picking. In the first case, a rational design of the warehouse and its areas will help you improve your ratios. When it comes to improving the picking routes themselves, picking assistance software will be a great ally.
In this section, precision picking comes into play (taking the correct reference and quantity) and everything we do to make picking easier and, at the same time, give better results: choosing the correct types of racks, hit with the ABC distribution and the location of materials, etc.
It is also necessary to include here the return of the product to its location, so that there are no damages, no errors and the merchandise ends up in the wrong place (on another pallet, box or different reference) or hinder the work of the next operator who goes to that point.
Finally, there is the process in which the operator has to place the merchandise inside the support in which it will travel during the rest of the process. It can be a box, a pallet, on the same truck, etc. But it is necessary to establish the indications of how it should be done.
Conclusion of the order
Once the materials have been collected, we still have the final packaging and conditioning work pending, in which we will leave the merchandise as it will travel. It is important to do it in a specific area for this, so that it is not carried out anywhere in the warehouse and hinders other operations. We will also have to measure and weigh it, and not only to have that data recorded but because in some cases the choice of logistics provider may vary depending on the kilos and centimeters.
In the labeling it is important to differentiate two parts: the packing list, in which the content of the merchandise is specified and is intended for the recipient, and the identification labeling (which serves to differentiate what order it is, the transport provider that is going to be made charge of it, shipping data, etc.).
Now all you have to do is take it to the dispatch area, where, as we have already seen, it will be classified by type of package (pallets, boxes…), by destination, by carrier… for its final departure. Everything that you have managed to optimize during the entire order preparation process will be savings for your company.