Pick Pack Ship - How it Works in Warehouse Fulfillment
What is pick pack ship and warehousing fulfillment shipping? We discuss challenges of pick & pack warehouses, 4 pick & pack methods, and which may be right for you.
Order fulfillment is one of the last steps in the sales cycle of a product. With nearly limitless numbers of different products and businesses, pick pack and ship can easily become complicated and overwhelming. Thankfully, there are a hand full of methods that simplify your fulfillment process regardless of the types of products you are shipping.
What is Pick Pack Ship?
Pick pack ship is the three step process to fulfill orders. Most often, fulfillment centers us the term to refer to the final shipment that eCommerce companies send to an end-customer. Therefore, you may consider pick and pack services a type of shipping process.
As customers tend not to order items in bulk, these orders must first be pulled (picked) from larger carton boxes or containers. Picked items are then placed (packed) in smaller boxes suitable for delivery services. Finally, shipping labels are applied to these boxes and small parcel or delivery service companies such as Fedex or UPS ship these boxes to the end-customer’s location.
Pick Pack Ship Challenges
Order fulfillment is all about efficiency. This is especially true as total inventory and number of SKUs and order volume increases. Challenges arise when the operational structure is insufficient to handle the increasing order volume or unit count. The result poorly planned fulfillment operations can be costly mistakes or long lead times. Today’s online brands expect a package to ship within 24 hours. When this doesn’t happen, customer satisfaction reduces, the brand suffers and negative feedback may result.
4 Types of Pick & Pack
However you skin it, pick and pack services always breaks down into 3-steps (picking, packing, and shipping). However, because of the varying types of products and industries, it helps to consider the 4 pick pack ship methods.
- Piece picking
Most consider piece picking the simplest form of pick and pack operations. After an order enters the system, team members pick individual items or products from the warehouse. Usually they are in carton boxes on shelves.
- Batch picking
As a warehouse grows, it may require better efficiencies to enable good customer service. Batch picking allows for this scalability by enabling team members visibility into multiple orders at the same time. This means a team member can pick the same item for multiple orders in one trip, but later on pack them separately. Whereas in the piece picking method, team members only have visibility into their order. The reduction in foot traffic and picking time under batch picking greatly increases warehouse efficiency.
- Zone picking
Another method for large warehouses is zone picking. As the name suggests, it splits the warehouse into areas called “zones”. Team members are responsible only for items in their areas. This is helpful for large warehouses where it may be difficult for individuals to learn the location of items. Whereas smaller zones are easier for team members to memorize and become more efficient at picking.
- Wave picking
Under the zone picking method, a particular zone may reach a critical size requiring even more efficiency. When this happens, batch picking can combine with zone picking. This pick and pack method is called wave picking. Team members responsible for a particular zone may pick the same item for multiple orders in their zone.
Optimal Pick & Pack Warehouse Flow
So which pick and pack method is right for you? Before you can answer that question, you must first determine what an acceptable level of service is. Often times, our customers determine this for their account with an SLA (service level agreement). If you are fulfilling orders, however, you need to determine what your customers want. Look at your competition and talk to your customers to find out what is most important to them. Do they want 24 hour shipping? Free shipping? Overnight shipping? What kind of packing or packing materials do they want most? Frustration free? Or do they simply want the cheapest option? These are all questions you will need to answer.
Whether you use piece picking, batch picking, zone picking, or wave picking, make certain that your operations are as streamlined as possible. You must identify and reduce unnecessary steps or distance as much as possible in your pick pack and ship process.
For example, if your most popular product is located in the back of the warehouse, the total time per order on the picking list may be longer than it could be. In this scenario, simply moving the location of this material closer to the fulfillment area could save vast amounts of time and increase efficiency. Order fulfillment software aids this process of determining the most efficient route in your fulfillment center. Usually, software solutions like this bundle with inventory management software, or warehouse management software.
At AMS, we employ a mixture of all of the 4 pick pack and ship methods. It is highly dependent upon which customer we have, but we remain flexible for all types of volume and service level requirements. This helps us create an environment that is successful for our customers regardless of the kind of pick and pack services we are doing.
When Should You Outsource Pick Pack and Ship?
As an eCommerce brand, you make decisions all the time about what kind of process you want to focus on. For example, some brands decide to do all of their marketing in-house. Others decide that they are not marketing experts and outsource this task.
When your ability to grow your business is limited because of your in-house order fulfillment process, it may be a good time to consider outsourcing.
Pick and pack fulfillment is not a creative process like marketing. It’s an operational process. If your company’s culture leans toward creative capability, then you may consider a process such as pick and pack fulfillment for outsourcing. Alternatively, you may decide that you are just not very good at running a pick and pack warehouse. There’s nothing wrong with this decision as all business outsource some portion of their tasks for this reason.
Considerations When Deciding to In-house Order Fulfillment
In order to help with this decision, involve your leadership team for your company. You should examine areas such as quality control, inventory storage, warehouse managers, and even supply chain managers. When you involve managers from all the areas of your company, you can make a decision with all the information at hand.
Make sure to leave no stone unturned in this process. Often companies make poor decisions simply because information was left out in their analysis. You will need a solid understanding of the pick and pack process including the packing, shipping, inventory management, and even basic things such as the appropriate packing materials required to complete this operation.
Infrastructure Requirements for a Fulfillment Center / Warehouse
One area that often catches businesses off guard when considering the proper warehouse setup is the capital expense for the warehouse infrastructure. There are many elements that are required for basic pick and pack fulfillment that may balloon costs if not considered early on. Infrastructure considerations go beyond just square footage requirements for inventory or packing orders. These include things such as requirements for a packing station, shipping orders, warehouse shelves, conveyor belts, and warehouse staff.
It’s important, even for larger businesses, to consider all the elements required for the entire order. This includes order processing (usually with a sales order) through after the shipment handling of returns or missing items.
Additional Considerations for In-house vs Outsourced Pick Pack and Ship
Whether you decide to develop your own picking packing, and shipping service or outsourcing, consider the following. Any good business must measure what success looks like for products or services. The same is true with a fulfillment centers. Most of the time these requirements are driven by the needs of the customer. However, you should also consider how you will measure success in the following areas:
Happy customers is usually the main measure of good results. You should ask yourself, “what do my end customers want and can I meet that demand?” If the answer is no, you may want to consider an outsourced pick and pack fulfillment company who can meet your quality control requirements.
Pick and Pack Stage
Determine which pick strategy listed above is right for you. Pack strategies vary depending upon the type of product in the picking list. The packing stage should be measured based on what your customer satisfaction requirements are.
While you may feel confident you can maintain good order accuracy in your pick and pack operation, you need to consider how this scales. Can you maintain success if you have more than one order at a time? Are you certain you wont mix up tracking number, inventory location, package quality, or even warehouse cleanliness?
Shipping Cost and Speed
One advantage that fulfillment centers have over businesses is a deep relationship with shipping providers. This is because a fulfillment center has a scale of volume that is usually much larger than a typical e commerce business. This discounted shipment is usually passed onto the customer through discounted shipping label costs and the total cost to ship an item. Speed is also a concern for shipping. From the time a shipping label is created, how long does it take before your item is shipped? From the time it is shipped, how long does it take to the package to deliver to the customer?
Warehouse Space and Flow
The correct amount of warehouse space for holding inventory can be difficult to estimate. If your inventory management teams do not have a good hold on seasonal inventory requirements, it can be disastrous. Inventory management software can help with this, but it is still dependent upon your company’s capability to determine the right inventory needs, packing process and location in the warehouse, and space requirements.
Total Order Cost
While you might be able to build out internal inventory management, pack strategies, and shipping process, that doesn’t mean it is cost effective. Once you have considered the total infrastructure cost, you must also consider the total cost per order. As with shipping cost, fulfillment centers often have volume discounts on things like packing materials. These are usually passed onto their customers, enabling a much lower cost per order than might be possible with in-house pick packing and shipping.
Conclusion: In-house Pick Pack and Ship or Outsource?
After reading this article, you should have a solid understanding of pick pack and ship. Furthermore, you should also know guidelines for deciding on whether you should do this service in-house or outsource it. If you discover that an in-house solution for your pick pack and ship requirements is favorable, you may find that there is tighter control and more profitability potential. However, deciding to outsource your pick and pack services, if for the right reasons, can renew your company focus and multiply your success in other areas.
Looking for a fulfillment partner?
Let AMS Pick, Pack & Ship
There was a time when businesses revolved centrally around the customer and their needs. Decisions were made based on what is best for the customer first. People did what they said they would, and jobs were completed on time. AMS carries on the tradition of customer service today.