Spend any time an eBay recently? If so, then you’ve probably noticed the significance of user feedback scores. These ratings of positive, negative, or neutral are logged by eBay from buyers and sellers in order to measure user satisfaction. The votes are turned into numerical ratings that grade a transaction and its participants. Top ratings are coveted by eBayers, as high scores demonstrate a record of positive transactions-and low ones can get you booted off the site. A feedback score of at least 10 earns you a cute yellow star next to your handle, with the highest-rated participants achieving the much-sought-after shooting star.

Just as eBay "shooting star" power sellers aim for superior ratings, manufacturers try to develop a good reputation by giving customers a positive sales experience. One way they do this is through fast and accurate order picking. In fact, of all fulfillment processes, many industry experts consider picking operations the most important. This makes sense, seeing as satisfaction levels rely heavily on successful orders; and, quite simply, a firm has more outbound than inbound customer transactions. If this is not the case, that company certainly is on its way out of business.

A new kind of demand
One thing on which all businesspeople can agree is that customer expectations have changed. "The retail market is so competitive that, if the store doesn’t have a product on the shelf when a consumer walks in, they walk across the street," says Bill Hubacek, director of distribution technologies for automated material handling solutions provider FKI Logistex.

Shoppers see fewer items on the shelves because retailers no longer stock as deeply as they used to. Many of these stores follow the Wa1-Mart model and try to replenish inventory every night. "Being able to pick and replenish that stack by the end of the day is the ultimate," says Stephen Slade, Oracle Corporation senior director for marketing, adding that frequent replenishment also helps reduce pilferage, out-of-stocks, and spoilage rates.

Catalog and e-commerce shopping also have significantly altered the marketplace. In fact, Slade says online ordering has jumped about 25 percent in the past year. "Everybody wants everything now," he says. "Getting orders picked and shipped within 24 hours is really key ... If [manufacturers] can pick an order that day and get it off the docks, they can recognize the revenue. The goal is to be able to improve the revenue recognition, to get it out the door, and to get it to UPS by 5:00 every night."

Tom Giovingo, executive vice president for supply chain services provider Fidelitone Logistics, says his company deals with many of the same challenges. "Customers expect to have it shipped same-day or next-day so that they get it within a day, two, or three," he says. "They had a need or a desire to make a buy. [so they want to] receive that item as quickly as possible."

Giovingo also says imperfect, dirty, and misfiled orders are a major concern because of the lost customer satisfaction and loyalty, as well as the soaring cost of returns. Accordingly, if there’s any delay in getting that item shipped out, cancellation and customer remorse rates climb higher with each passing day. What’s worse, shoppers lose the excitement of receiving their purchase.

"When you really look at what it costs a company to ship the wrong thing, that’s where the big numbers come in," Hubacek says. "There’s a big payback with accuracy gains."

Methods and equipment
Order fulfillment techniques include piece, case, and pallet picking. Equipment involved consists of

carousels; conveyors; automated storage and retrieval systems; bar code, radio frequency terminal pick to light, and voice-directed picking systems; and lift trucks. These tools are used for numerous picking methods, the most popular of which include the following:

• Basic order picking is used for items kept in fixed locations, such as static shelves or racks. A worker picks customer orders one by one, walking the aisles until the entire order is assembled. This technique works heat for firms with fewer orders and many picks per order.

• Batch picking combines multiple orders into small groups. Workers reduce time and effort by consolidating all the picks in a batch and picking them during a single pass. Batch picking also significantly cuts down on the amount of warehouse travel.
  

• Wave picking enables workers to pick from all zones at tile same time. Afterward, the items are sorted and prepared for their specific shipments. This method is useful for businesses with a high number of both stockkeeping units (SKUs) and picks per order.

• Zone picking divides a warehouse into individual picking areas. Workers are assigned to a particular spot and only pick items that fall within their borders.

In addition, put-to-store systems are being used more and more commonly, says Ian Hobkirk, AberdeenGroup senior analyst, warehousing and transportation. "Let’s say I’m using a traditional pick system, and I have 10 store orders that I’m picking. I can pick them one at a time, or I can travel through the warehouse taking 10 boxes or 10 containers with me," he explains, "Put systems are kind of the opposite. With these, I’m going to go and pick all of the stuff 1 need for 10 or 50 or 100 store orders. I’m going to take a whole pallet of brown shoes, have a staging area in front of me for 10 orders and then go down the line saying, ‘This order gets 3 pairs of shoes, this order gets 10 pairs of shoes, this order gets 5 pairs of shoes.’ So I’m taking the same item, and I’m putting it to multiple different orders."

He adds that put-to-store is especially effective for manufacturers shipping to a large number of retailers. Because the stores are likely to have very similar orders, shippers can expect to handle a lot of the same items. "You can pick a relatively low number of SKUs and do this high-speed put system that distributes them to all the correct store orders," Hobkirk says.

Another methodology is put-to-light picking, which is similar, in that an employee walks down the line pushing a full pallet of the same goods. Lights come on over every location where there’s an item to be put. The three main benefits of put-to-light are its speed, the fact that workers don’t have to look down to read instructions, and that the system is hands free.

Defining the system
Business leaders should determine the correct picking solutions for their organization based upon many factors, including the particular warehouse environment; product characteristics, such as size and weight; the number and frequency of transactions; picks per order; items per pick; and so on. Often, a blend of picking systems is required.

"Each of the three basic types of picking in a typical warehouse has a different dynamic and different technologies that seem to make sense." Hubacek says. "The type of product and the physical characteristic’s of that product make a lot of difference in choosing a technology,"

Slade says he has installed numerous automatic picking systems throughout his career and, during that time, has seen great value in carefully considering all the available solutions. "It comes down to what your piece part assemblies look like and what kind of merchandise you’re dealing with – high-value, high-use or low-value, low-use." he says.

Most experts agree the trickiest orders to pick are smaller-sized eaches, also known as open-case orders. Because these individual items are considered one unit, it’s more difficult to pack and track what goes in each box.

"One way to [solve] that problem is with precubing. This is where the warehouse management system (WMS) knows the size, shape, and weight of every item," Hobkirk says. "If I’ve got 1,000 things shipping to Wa1-Mart, [the WMS] will, ahead of time, figure out how many boxes, what size boxes, and what’s going to go into every box. It effectively splits an order into smaller suborders that can be picked completely independently of one another."

Although it’s much easier to know in advance the configuration and shipping process for heavier and larger items, picking these products is far from trouble-free. "The challenge there is dealing with the bulk of it," Hobkirk says. "Those types of things usually aren’t as conveyable through a material handling system."

In addition, bigger items may require a two-person picking team and special equipment, such as a forklift.

"Why is all that important?" Giovingo asks, "Making sure the item is in a ‘pickable’ state when orders come in [enables] you to be efficient and timely with picking ... If I’m picking a case of picture frames that weighs 5 pounds versus picking a compressor or a big-screen TV that might be 150 or 200 pounds, there are different dynamics involved with both equipment and people."

Designing for the future
The beauty of automated order picking technologies is that human pickers no longer have to walk miles of warehouse aisles carrying paper-based orders. The process can improve productivity and accuracy and reduce labor costs. Still, automation is no guarantee of success. Choosing and implementing Picking solutions are confusing tasks that require a truly forward-thinking examination of where a company will be 5 or 10 years down the road.

"If you’re going to just replace paper picking with something that is automated without really evaluating your operation, you’re making a mistake, Hobkirk says, adding that the end result of such an effort would be automating the processes of today and expecting them to work tomorrow and beyond.
Likewise, Hobkirk says process must come before automation; otherwise you risk automating bad processes.

"The hardest challenge is defining what your business is today and then asking, ‘Will this technology accommodate my business as it may look in the future?’" Slade says. "Changes in quantity, size, pick dimensions, and frequency of pick could render your picking system obsolete."

Choosing and implementing automated picking systems calls for effective change, management. "The technology itself will not get you the big gain," Hubacek says. "The process change will get you the big gain."

As executives begin the process of defining the future of their picking operations. Slade says they should consider three main points – maneuverability, flexibility, and agility. In addition, company decision makers must use data on order profiles and order volumes over at least the last 12-month period.
"How much of a particular widget have you been selling? What’s the movement in velocity profiles? What are the characteristics?" Hubacek adds. "You have to design for that and figure out how you’re going to adapt."

In addition, Giovingo says an examination of the organization’s pick frequency undoubtedly should be part of the process. "The picking profile really plays a big part in it," he says. "You may be picking 1 [SKU] 1 or have 100 pieces going to a single location ... versus picking a direct-to-customer shipment with 100 pieces going in 100 individual packages and leaving the building to 100 individual ship points."
Data cleansing is another necessary part of this process. "There are consequences to bad information," Slade warns. "Anybody who’s putting a program like this in place has to have checks and balances to make sure the data [are] 100 percent correct."

In addition, accounting for demand ebbs and flows is crucial to system design. To remain competitive, a company’s automated picking system must have the horsepower necessary to manage these variances. "It’s making sure you have a blend of the proper systems and picking disciplines in place to be able to handle those peaks and valleys," Giovingo says. "A consistent warehouse discipline needs to be in place to maximize efficiency and flow."

Finally, executives shouldn’t rush into a decision. "Companies are always on the hunt for something new and something that’s going to save them some money, but they really need to do their homework," Hubacek says. "Too many times, they’re either presold on a technology ... or they have a vendor that comes in that sells a particular technology and paints it as ‘the cure for cancer,’ and they select it before they really figure out what they need to do. They start trying to make the operation justify the selection."

Pick prevention?
Some experts believe the best choice for fulfillment lies outside the walls of the manufacturer’s warehouse. Considering the high costs involved with receiving a box, opening it, verifying it to the packing list and the order, and then putting it into inventory, it might make good sense to assign those responsibilities to a partner organization.

"Before you go to a pick system, see if you can improve your flow," Slade says. "Put the responsibilities on the subcontractors to fulfill the assembly line, rather than you fulfilling your inventory and stocking up your inventory when it could be done through other processes."

He actually suggests "eliminating the pick completely" and giving it to a subcontractor. "You can say, ‘I use 10 bolts an hour, and I just want to make sure there’s a bolt out there. So you fill the assembly line, and I’ll pay you on the 10 bolts an hour I use.’ It’s as simple as that," he says. "Eliminating the pick is the optimum global advantage."

Fidelitone Logistics, also a third-party logistics provider, helps its customers do that by enabling the outsourcing of inventory management, distribution, and returns processing, among other functions. In addition, the company creates technology-based, virtual distribution systems with centralized order processing and data management. This automated approach consolidates clients’ supply chain functions via real-time, Internet-based communications, essentially taking the pick out of the process. "We try to manage the entire supply chain to make it the most efficient it can be on the receiving side, and [then we] coordinate the outbound shipping side," Fidelitone Logistics’ Giovingo says.

For now, these types of processes are probably smartest for firms that cannot include fulfillment among their core competencies. Still, it seems entirely possible that the future of picking will be a cohesive, centralized supply chain of technology-based, virtual fulfillment. "There’s no need to have to put an item into inventory and pick it," Slade says. "The best pick is no pick at all."

Elizabeth Rennie is senior editor of APlCS magazine. She may he contacted at editorial@apics.orq.