Outlook Series Podcast: Logiwa DTC Picking Strategies
Originally published on October 18, 2022 by Logiwa Marketing, Updated on March 3, 2023
As the ecommerce market continues to grow, and direct-to-consumer (DTC) trends surge, those overseeing warehouse picking and fulfillment operations are turning to WMS software and advanced inventory picking strategies to maintain speed and accuracy.
Logiwa is thrilled to have had Jamie Bobka, Director of Product Operations and Analytics, be invited back as a returning guest to the Outlook Series Podcast to talk in-depth about WMS Systems, warehouse picking strategies, and more! Below is the transcript of the conversation between Jamie and the podcast’s host, Michael Lippis, Editor-in-Chief of the Outlook Series.
Lippis: We’re here for another edition of the Outlook Series. And I’m your host, Mike Lippis.
It has become essential for warehouse management systems to operate as efficiently as possible from end to end. The main goals of warehouse operations are efficiently utilizing space, labor, and equipment while minimizing costs and meeting customers’ expectations. The most efficient picking strategies require complex planning and adapting to ongoing changes. There are many procedures and workflows that occur daily in a warehouse such as dock operations, receiving, storage, picking, packing, shipping and returns. Strategic planning for all of these workflows provides a foundation for successful warehouse operations. Now joining us to discuss DTC picking strategies is Jamie Bobka. Jamie is the Director of Product Operations and Analytics at Logiwa. Jamie Bobka, welcome to the Outlook Series.
Bobka: Thanks for having me.
Lippis: Hey now, Jamie, how does order picking impact warehouse labor costs?
Bobka: Well, it’s one of the largest contributors to labor costs, if not the largest. Obviously, this varies a little bit by operation (things like square footage, the types of products being stored and fulfilled, walking distances, etc.). These all play a part, but having an efficient tool and an optimized process is critical for trying to keep those labor costs in check. Oftentimes when we’re onboarding new customers and working through setup and configuration, defining their workflow processes, etc., we can see labor efficiencies just by implementing good practices of around 40%. And a lot of that is just from underperforming processes and tools, or just needing to implement a better strategy.
Lippis: All right. Now, what order picking goals are firms looking to achieve?
Bobka: Well, the ultimate goal is to ship orders on time with the minimum number of pickers to minimize your labor costs. Typically, at Logiwa, we’re working with high volume direct-to-consumer (DTC) warehouses where your average picker picks between 50 to 150 lines a day. It depends on the operation, of course. Since each operation is different, sometimes that industry standard number might not be the best target or goal to aim for. Personally, I think the best goals here are defined by understanding your processes, what your bottlenecks are, which of those are inside of your control, and then implementing plans to improve them.
Usually that improvement plan is your goal. It either involves minimizing walking paths or batching orders in a smart way that allows pickers to pick the maximum number of orders in a single run. There are other factors too. We recently talked about this topic on one of our QuickTake webinars called, “How Smart Picking Drives Warehouse Efficiency.” You can see it on https://www.logiwa.com/resources and it’s a good resource to learn a little bit more about it. But we can talk more about some of the common ones here, too, if that’s helpful.
Lippis: All right. Now, what is discrete order picking?
Bobka: Discrete order picking or single order picking is the simplest order picking strategy out there. It’s typically the case if you’re using spreadsheets, paper pick lists, maybe you have a very light inventory management system, etc.. But overall, it works exactly like it sounds. A picker receives a task to pick an order. They pick the items explicitly for that order. They pack it, ship it, and then repeat. Most operations start here and with good reason: it’s an extremely safe, very risk-averse practice. It’s a good way to prevent errors. It’s simple to implement. And easy to train new or even temporary seasonal employees. However, as you can imagine, there’s a lot of room for improvement and efficiency over a strategy like that.
Lippis: I see. Now, how does batch picking methodology fit into order picking strategies?
Bobka: Batch picking is usually your next evolutionary step away from discrete and single order picking. Orders are grouped into batches based on some attribute of theirs. Pickers will pick those in larger groups before returning to the packing station. This reduces walking time and thus improves labor efficiency. But the key with batch picking is around which attribute you’re going to use to group your orders to ensure you’re getting the maximum benefit. For example, you can group all of your single-item orders with identical SKUs together, so one picker can go and grab all of those items in one go… Then you can create another group of say multi-item orders, assign those to someone else, and so on and so forth. Being able to define multiple grouping methods in an algorithmic way can be tricky to implement, and not all tools are capable of that level of sophistication. But this is where we provide a lot of value to our customers. The multiple layers of batching is really important for a batch picking methodology to really fit.
Lippis: OK, Jamie, now what can you tell our audience about wave picking?
Bobka: Sure, this is a method where orders are going to be released to warehouse staff in waves based on similar attributes. Like the time that it’s supposed to be shipped or the types of items that need to be picked, or even the zone of the warehouse from a location perspective. This has a lot of pretty obvious planning advantages, like being able to concentrate on your critical orders first and then regrouping and swarming on the next wave of the orders that are meant to go out the door… or being able to concentrate on a particular zone for a period of time and then clear out the area of foot traffic, so you can have efficient inventory replenishment going on while pickers are in a different area. This is a very effective method, but it requires a pretty significant amount of planning and management. So you need a good plan to be able to execute this efficiently or you’re going to end up with a lot of labor waste. You might have idling employees, things like that, if it’s not executed correctly. But it’s a very valuable strategy if you can manage it.
Lippis: Oh, I see. Now, what are the advantages and disadvantages of zone picking?
Bobka: Zone picking is similar to an assembly line process and more of a location-focused method where pickers are dedicated to specific storage zones in the warehouse and orders are sorted and packed after picking. This is really effective in cases where it’s possible to pick all of the items for an order out of just one zone, or maybe if a zone in particular requires extra equipment like a forklift, or maybe you just have a very large square footage of your warehouse. It’s another common strategy and another common next step after batch picking as operations and square footage continue to increase. This method is really good at reducing travel times, but like wave picking also requires some pretty significant coordination to implement effectively. And you need to have the right layout, like where your items are located and where your location zones are, in order to really reap the benefits from it. But overall, if this can be implemented effectively, you can really get some high labor efficiency out of it.
Lippis: How would you counsel a firm looking to acquire order picking equipment?
Bobka: I’m a big believer in really understanding what your challenges are before you try to buy or implement a tool to address them. Order picking equipment and warehouse robotics and automation solutions are no exception to that. There are a ton of really cool and extremely effective tools out there. But I think first, from a counseling perspective, you need to understand what your problems and bottlenecks are. For example – if you have a smaller warehouse with smaller items you’re fulfilling, your primary bottleneck is probably not going to be walking time but probably something like sorting or item identification. So once you know what your primary bottleneck is, you can look into solutions that address that issue that will give you the best return on investment and pick a tool from there.
Lippis: Now, what is the role of voice technology and mobile picking in DTC picking strategies?
Bobka: These are just some great examples of tools aimed to reduce bottlenecks and increase the picking efficiency. The voice technology? This is a great improvement for high volume fulfillment operations where you’re spending a lot of time reading screens, looking up and down, looking down at a device, looking up… Voice technology is really great for being able to communicate those audibly so that you can move a little bit quicker. These are great tools to consider if you have a reliable data source and the proper software to help facilitate its usage. And you can get a lot of benefits of your picking times by reducing visual screen limitations.
Lippis: How can an integrated warehouse management system help pick, pack and ship faster?
Bobka: Well, I think the key to that question is the integrated part. It’s one thing to have a simple WMS that can store your data (like what orders you have to fulfill, how much inventory you have, where the inventory is stored, etc.), but an advanced, integrated solution can improve fulfillment operations beyond that in a couple of key areas. First, like workflow automation – the ability to coordinate your staff to complete your tasks efficiently with reduced risk of errors and eliminate basic decision making. If you have a tool that can automate your workflows and make some of those non-critical decisions for users, you’re going to eliminate a lot of that and really improve your labor efficiency. I think second, with advanced reporting and analytics, there’s a lot of tools out there that are able to spit out some data for you to look at. But to do really advanced reporting and analytics, to integrate all of your data sources together to a consumable, easy-to-read format that allows you to make quick decisions. That’s really going to help you eliminate your bottlenecks and also avoid future issues like stock or packing item shortages. And then finally on the connectivity part of an integrated WMS, having software platforms in your technology ecosystem that can communicate with each other in real time to help keep things in sync (like inventory levels in order statuses) – this can ensure that your operations are getting executed at the right time. So having an integrated tool that can integrate with your workflow, that can integrate with your other systems, that’s able to pull data together to give you good reporting and analytics – you have those things. You can really avoid a lot of bottlenecks and identify where your efficiencies can be had.
Lippis: All right. Now, can smart picking improve cluster picking?
Bobka: I think there’s a couple of ways to answer this. First, generally speaking, any picking strategy more advanced than a basic single order picking strategy has to be smart. Like I mentioned before, without a smart system coordinating these advanced strategies, without a good plan behind them, you actually run the risk of decreasing efficiency with idle staff or unnecessary stage gates in a workflow. For example, like with zone and wave picking, you’ve got to at the right moment release a new wave or ensure that you have proper resources in a particular zone. So unless your system and your process is smart you’re going to run into some issues, and that’s applicable for all of these.
Secondly, I’d say there are a couple of different categories of smart picking when it comes to automating picking strategy and things like cluster picking, etc.. Having one or two just predefined configurations for clustering orders together isn’t necessarily smart, but it is commonly marketed as smart. So we recognized that a long time ago that having a very simple configuration option for these types of strategies, it’s never going to be enough, just due to the complexity and variability of different warehousing operations, which is why we’ve created a fully tailored system to support algorithms that we can configure, you know, for each custom and unique implementation. Only by digging into those specifics for an operation can you really get the optimal improvement. So I’d say smart picking or having a smart system to improve your picking strategy is critical. Otherwise you might end up being better off with something a little bit more basic like single order picking or batch picking if you can’t get the operations down right.
Lippis: I see. Now, how would you characterize the main smart picking strategies?
Bobka: So I like to think about it like the primary challenges the strategy is best suited to solve, not necessarily a category, but more like a tag or a label. For example, you could enable some strategies that are risk-reducing or air-reducing strategies (things like single-item order picking) – those are great strategies to use if errors are particularly costly for your operation and not something that you’re willing to risk.
Maybe a primary challenge, though, is replenishments due to locations or location, size constraints, etc.. Maybe you can then label a strategy like wave picking or zone picking as, you know, replenishment friendly or replenishment supportive type strategy. I like to look at these as like what is the major bottleneck that you would face as an operation, and then looking at the strategies that help support that to minimize any inefficiencies that you might have.
Lippis: Now, is there an efficiency difference between cluster picking and smart DTC picking?
Bobka: Yeah, and actually we have a pretty good whitepaper on this called, “Selecting the Best DTC Picking Strategy.” I’d encourage anyone listening to check it out and take a look for more specifics. But we walk through a scenario, calculate some efficiency numbers, but I’ll share some of those notes here. Overall, we find that using a smart picking method, you can see up to a 50% improvement in time spent on the picking part of the fulfillment operation and packing improvements of nearly 70%. So again, every operation is different, but there’s a really clear takeaway from our whitepaper: the more that you can finally tune your picking strategy to the specifics of your operation, the more benefits you’ll be able to reap from it.
Lippis: How advantageous is Logiwa’s smart DTC picking solution?
Bobka: Having a tool like Logiwa’s that allows us to configure truly smart picking solutions for customers is a huge advantage for our customers, but also for us. But it isn’t the entire equation. Software can only be as smart as the people that are configuring it and using it, which is, to me, really the great advantage. We have a great implementation and support team of actual engineers who understand the industry and the challenges our customers face. We use that experience to maximize the benefit of what our platform and our software can do. And as a fast company, this is critically important for us. Even our commercial model is based on long-term customers versus short-term setup fees and one-off projects that are pretty common in this space. This requires us to ensure that our platform is providing actual long term value. We’re motivated to ensure that whatever it is that we’re implementing is extremely valuable for our customers. And to me, that’s a big advantage for us as a business, but also for our customers how much effort we put into it.
Lippis: Okay, Jamie, would you like to add anything else to our discussion before we wrap up for today?
Bobka: I think it’s just to talk for a moment about Put Walls and our Mobile U-Shape Cell approach. I think they’re pretty relevant for picking strategies. These are a great strategy for optimizing labor efficiency if you haven’t seen these before. In short, Put Walls are dedicated storage systems that support things like order consolidation and sorting after picking. This model eliminates the need to sort during the picking run, which can drastically reduce picking task execution times. Similarly, another efficient model we’ve had a lot of success implementing in the past is what we call the Mobile U-Shape approach. We’ve implemented this with customers that needed the flexibility of a mobile system, have a high variability of order volumes, but also didn’t necessarily have the space to implement a proper Put Wall. With this model, you’re using moving shelves that are brought together into a u-shape for increased consolidation capacity.
This allows a batch picker to go out and efficiently pick mass amounts of items in one run and sort them all once they come back. So they’re not wasting that time during picking and then easily move the entire system over towards the packing station to complete packing. If you want to learn more about that, we have a Put Walls whitepaper about this on our website, as well a QuickTake webinar on Put Walls and optimizing picking operations. These types of strategies are also extremely efficient for maximizing labor costs.
Lippis: All right. Now, Jamie, where can our audience get more information on Logiwa’s order picking strategies?
Bobka: I feel like I talked about a lot of these already, but you can check out our blog and the resources section at www.logiwa.com. Our team is always putting out new content on these types of topics, so hopefully you can find some valuable information there. We’ve got whitepapers and several webinars that you can go and check out and learn some details about some of the successful methods that we’ve seen in the past.
Lippis: All right, Jamie, I certainly do appreciate you joining us here today for another edition of the Outlook Series and wish you the best of luck with your future endeavors over there at Logiwa.
Bobka: All right. Thanks for having me!
Lippis: Thanks for joining us today. And be sure to log on to the Outlook Series site for your business and technology news.