The Fulfilment Center is the heart of an e-commerce supply chain and also the origin of the outbound flow of a customer order. Order Picking in a Person to Goods Fulfilment center is a labor intensive process and also extremely critical as the entire order flow further downstream is directly dependent on successful and optimized picking. It constitutes of ~14% of the Order to Dispatch lead time, ~17% of the labor cost in the pre-dispatch cycle and contributes ~80% towards product quality. The sensitivity of the performance of the order picking has a non-linear impact on all the three metrics of the FC: Speed, Cost and Quality and hence order picking if done effectively can positively affect the aforementioned three metrics and eventually customer experience.
The efficiency of order picking is dependent on a few variables which depict the demand and supply cycles in a fulfilment center. Influential Demand variables include order density, category mix, unit to shipment ratio, physical layout area of the fulfilment center among others. Supply variables which affect order picking consist of put-away logic (zone based, chaotic, cube), pick-zoning, batching, routing, bin size and effective utilization rate, layout design (drop zone, pick zone aspect ratio), inventory density and the effects of automation implemented in the fulfilment center. All of these Demand and Supply variables are closely interdependent and their relationship can have a bi-directional impact on the performance of an FC, directly impacting efficiency of order fulfilment.
This paper sheds light on the interplay between the demand and supply variables in the order picking cycle. It identifies and examines the parameters which influence the behavior of these variables. Furthermore, it explains the sensitivity of each demand and supply variable towards each of these parameters and provides a mapping of the interdependency of the variables in a fulfilment center environment.
The correlation between the aforementioned variables helps in focusing on the optimized zone within a fulfilment center for order picking and thus moving the activity to the next level of optimality. A use case of Order picking in a person to goods fulfilment center has been analyzed in detail to provide insights into the impact of each variable on the fulfilment center metrics and the weightage of each parameter on the variable in an elaborate manner.