Order ProcessingPackaging & ShipmentChapter 3

Chapter 4

Traffic Through Warehouse

Step 1 - Product enters a warehouse (Receiving)

Step 2 – Product is placed in appropriate warehouse location (Stocking)

Step 3 – Product is prepared to leave warehouse (Order Processing)

Step 4 – Product is placed in a vehicle for transport to next destination (Shipping)

Definitions Order: Requirements & instructions for picking

and shipping a set of inventory items

Stock Keeping Unit (SKU): unique alpha-numeric characters identifying an item

Line: Multiple requirements for an SKU

Pick List: Items in an order

Picking: Selecting, counting and dispensing items in an order

Order Pickers: People selecting, counting and dispensing items in an order

Value Added: Service that adds value

Order Processing

Customer receives order

Customer screens order

Customer inputs order into WMS

Order Picker retrieves pick list from WMS

Order Picker locates & picks items

Order Picker follows instructions for Added Value (packaging, labeling, assembly…)

Order Picker delivers prepared items on Pick List to staging area for shipping

Customer Receives Order

Order Processing begins when Customer (not warehouse) receives an order Internal: Warehouse & Customer are same company

External: Warehouse & Customer are different companies

Customer: Internal or external owner of product in inventory

Customer/Order Examples

Amazon – Online purchase of product Internal Customer – Operates own DC’s

Walmart – Automatic electronic store update of stock Internal Customer – Operates own DC’s

SPECS – Allocation of inventories External Customer – Uses 3PL Warehouse

Exxon – Manufacturing material request Internal – Owns tanker terminal that feeds into refinery

Tanker Terminal servesSame purpose as warehouse

Amazon Client’s Order

Screening an Order

Customer needs to assess if an order can be fulfilled Quantity – Enough in inventory?

Quality – Order requirements met?

Time – Time parameters?

Value-Added – Other services

Since warehouse holds inventory, access to some of this information can be obtained through WMS

WMS Inventory List

Order in WMS

Customer inputs order into WMS

Order should/could include Quantity – Number & types of items

Quality – Customer’s Vendor Compliance

Time – Scheduled delivery/pick up

Other – Assembly, packaging, labeling, testing and other services…

Amazon uses internet to receive client orders then software processes order into WMS

Pick List

The WMS transforms customer order into a Pick List customized for individual warehouse operations or systems

Picking

There are 3 basic Picking systems Area System/Single Order Pick

Zone Pick

Multi-order/Batch Pick

Area System/Single Order Pick

Order Picker moves throughout warehouse picking items for order (like grocery shopping)

Order Picker takes items in order and takes them to shipping area

The Gulf Winds warehouse system

Zone Pick Warehouse items are added to single orders as

they pass through different zones Items related to each other (SKU, parts to assemble)

Warehouse equipment used (forklift, by hand, robotics)

Specialty storage (reefer)

Value-added services (assembly, packaging labeling)

Order Pickers only work in their own zone

Ford, Chevy, Chrysler assembly plant system Parts of an automobile are stored in zones and added to

the vehicle as it passes through assembly line

Multi-Order/Batch Pick

Warehouse is divided into zones Items related to each other (SKU, parts to assemble)

Warehouse equipment used (forklift, by hand, robotics)

Specialty storage (reefer)

Value Added services (assembly, packaging labeling)

Order Pickers only work in their own zone

Definitions

Within each of these systems, picking can be carried out as: Pick-To-Order: An Order Picker picks items for one order

(each order handled separately)

Batch Picking: An Order Picker picks all items for a group of orders (reduce trips to warehouse by picking same items for group of orders)

Pick-By-Line/Pick-To-Zero: Exact number of items in one product line are available for picking (same type & number of items are delivered until line is exhausted)

Processes to Improve Accuracy

Processes with limited technology: Pick By Label: WMS prints a label for item to be picked

and attached to picked item

Issue Pack Optimization: Items in measured lots (pallets, cases, batches)

Pick Task Simplification: Eliminating & combining picking tasks

Order Batching: Grouping orders in a batch to reduce travel time by Order Picker

Move to Forward Pick Location: Large warehouses batch orders for a day and moved to staging area

Processes to Improve Accuracy

Processes with technology: Bar Codes: Item identification in WMS linked to

scannable barcodes (SKU, Model/Serial number)

Batch Picking: Radio data terminals in workstations communicate with WMS

Pick-To-Light/Put-To-Light: System scans barcodes to confirm accurate pick or , in a return, put back accurately

Voice Technology: Order Picker receives pick list and confirms pick via headphones

Staging of Picked Items

After picking, items are brought together, consolidated and prepared for delivery to customers Kitting: Individually separate but related items are

grouped, packaged and supplied together as one unit