So you’re serious about improving picking efficiency in your building. You know that picking accounts for around 55% of labor in most operations.
Travel time is most of picking labor
Of that 55% we see the following distribution of activity:
It’s obvious from the table that since travel takes the most time, improvement efforts should focus on reducing that travel. And that’s what we see. Most picking improvement strategies focus on reducing travel time.
The techniques often include slotting, warehouse layout arrangement, and picking strategy improvement. If a site hasn’t yet considered layout or slotting at all in its picking strategy, it should definitely look at that.
SmartGladiator, for example, has a great article that covers strategic and tactical approaches to improving picking. 4 to 6 of the best practices cover travel reduction.
But let’s dive deeper on a fundamental point.
Travel time is not the whole story
There’s a caveat to focusing on travel time improvement, especially if the layout and slotting have already been reviewed. Most picking travel-time improvement strategies assume the inventory is in tip-top shape.
But you can’t pick what you can’t find. So the inventory has to be present and available.
What if it’s not?
It’s not just that the picker can’t find the item, which takes extra time and effort in searching and picking. Remember the “search” effort percentage in the chart above?
It’s that the picker can’t find the item, and has to travel to another location to find it. Or an extra replenishment is required. And now the inventory team has to go and cycle count the location, sometimes two or three times, to fix it.
By the time the problem is fixed, the effort for that pick–even if the first picker found a substitute in the same location– went up by at least 2x, more likely 4-10x since cycle counters aren’t as efficient as pickers. We won’t count the cost of shipping short due to picks shorts here, but if we did that number would go up even more.
So we see that bad inventory affects the picker travel time, picker search time, which add up to 70% of the pick time for the affected task. We see that it impacts other functions as well.
Inventory Accuracy’s impact on picking
Let’s run some numbers on the impact of inventory accuracy on picking.
Imagine a warehouse with 10,000 manual picks per day. In this warehouse, 100% picker efficiency means completing a pick every 30 seconds or .5 minutes, and all pickers are at 100% efficiency. And let’s define a “pick short” as: every time the picker is unable to find inventory to complete the assigned pick task, requiring another pick to fill the order.
Let’s also assume that the rework cost of fixing a pick short is 2x that of completing the pick without an error. Note, this is a very conservative assumption based on what we mentioned above!
So what we’d see for a range of pick short rates impact looks like this:
We see that right off, the pick short rework multiple times the pick short rate gives the percentage of wasted labor due to pick shorts.
Note that we don’t distinguish how the pick short is caused. It is different than an inventory error rate, so we don’t need to calculate number of items per pick location, interim visits by pickers, or other things. per pick location are stored on average.
When we put this formula into our imaginary warehouse we see that:
The formula is simple but its implications are surprising. A 1% pick short rate results in a 2% incremental extra labor cost. A 2% pick short rate results in 4% incremental labor cost. Other approaches or estimates can show non-linear impacts, but we keep it simple here.
Remember, this is only at a rework cost multiple of 2x. If it is higher then the cost climbs more quickly. And notice that the rework cost is often not fully counted in the picking efficiency numbers because some of it is absorbed by inventory control cost. The travel time and search percentages in Figure 1 include some amount of rework picks but they do not include the inventory correction efforts.
So strategies to improve picking efficiency must target overall picking efficiency, including rework. Start with understanding your pick short rate and the labor improvement it implies. Otherwise strategies optimizing for travel time may miss the bigger picture.
Start at the source
“Well, just have accurate inventory” and the problem is solved, right? Bingo! But not so fast – how do we do that?
We focus on accurate putaway. Putaway is the placement of inventory into the pickable location, either from reserve or receiving locations.
If you want accurate inventory, you must first have accurate receiving and putaway. The accurate placement of inventory into the pickable location is essential. If a put is inaccurate, it guarantees rework by either inventory control or pickers. And since many inventory programs only count locations once per quarter, you can be confident that many more bad puts cause picking errors, than are fixed before the pick.
So because putaway is immediately upstream of picking, let’s focus there.
The first step is to check that your bin configuration and putaway strategies support accurate puts. This means not too many items per bin and that there are enough bins available to do the putaways. If there aren’t, that is a larger inventory and forecasting issue, and it will affect accuracy.
Then the putaway containers from receiving should be accurate. Conduct audits on the put carts (or whatever the put unit is) before they go to be put away.
Then check on puts with with putaway audits and a proactive, diagnostic cycle counting strategy. This cycle counting strategy should visibility to sources of errors and support giving feedback to associates.
Sure, pickers can cause errors too. But most pick shorts come from not having the correct inventory at the location. If you want to fix that, start with putaway.
Conclusion
Picking is the largest labor center in most warehouses. Many strategies for improving pick efficiency focus on reducing travel time. But inventory accuracy is the critical foundation for optimizing picking. Poor inventory accuracy wastes huge amounts of effort, which needs to be accounted for in staffing models–see our article here for more on that.
This means that travel and picking improvement is important, but the first place to check is inventory accuracy and putaway.
If you found this approach useful, contact us for warehouse operations audit and improvement project support.