1. Order Processing Packaging & Shipment
Chapter 3
Chapter 4

2. Traffic Through Warehouse
Step 1 - Product enters a warehouse (Receiving)
Step 2 – Product is placed in appropriate warehouse location (Stocking)
Step 3 – Product is prepared to leave warehouse (Order Processing)
Step 4 – Product is placed in a vehicle for transport to next destination (Shipping)

3. Definitions
Order: Requirements & instructions for picking and shipping a set of inventory items
Stock Keeping Unit (SKU): unique alpha- numeric characters identifying an item
Line: Multiple requirements for an SKU
Pick List: Items in an order
Picking: Selecting, counting and dispensing items in an order
Order Pickers: People selecting, counting and dispensing items in an order
Value Added: Service that adds value

4. Order Processing Customer receives order Customer screens order
Customer inputs order into WMS
Order Picker retrieves pick list from WMS
Order Picker locates & picks items
Order Picker follows instructions for Added Value (packaging, labeling, assembly…)
Order Picker delivers prepared items on Pick List to staging area for shipping

5. Customer Receives Order
Order Processing begins when Customer (not warehouse) receives an order
Internal: Warehouse & Customer are same company
External: Warehouse & Customer are different companies
Customer: Internal or external owner of product in inventory

6. Customer/Order Examples
Amazon – Online purchase of product
Internal Customer – Operates own DC’s
Walmart – Automatic electronic store update of stock
SPECS – Allocation of inventories
External Customer – Uses 3PL Warehouse
Exxon – Manufacturing material request
Internal – Owns tanker terminal that feeds into refinery
Tanker Terminal serves
Same purpose as warehouse

7. Amazon Client’s Order

8. Screening an Order
Customer needs to assess if an order can be fulfilled
Quantity – Enough in inventory?
Quality – Order requirements met?
Time – Time parameters?
Value-Added – Other services
Since warehouse holds inventory, access to some of this information can be obtained through WMS

9. WMS Inventory List

10. Order in WMS Customer inputs order into WMS Order should/could include
Quantity – Number & types of items
Quality – Customer’s Vendor Compliance
Time – Scheduled delivery/pick up
Other – Assembly, packaging, labeling, testing and other services…
Amazon uses internet to receive client orders then software processes order into WMS

11. Pick List
The WMS transforms customer order into a Pick List customized for individual warehouse operations or systems

12. Picking There are 3 basic Picking systems
Area System/Single Order Pick
Zone Pick
Multi-order/Batch Pick

13. Area System/Single Order Pick
Order Picker moves throughout warehouse picking items for order (like grocery shopping)
Order Picker takes items in order and takes them to shipping area
The Gulf Winds warehouse system

14. Zone Pick
Warehouse items are added to single orders as they pass through different zones
Items related to each other (SKU, parts to assemble)
Warehouse equipment used (forklift, by hand, robotics)
Specialty storage (reefer)
Value-added services (assembly, packaging labeling)
Order Pickers only work in their own zone
Ford, Chevy, Chrysler assembly plant system
Parts of an automobile are stored in zones and added to the vehicle as it passes through assembly line

15. Multi-Order/Batch Pick
Warehouse is divided into zones
Items related to each other (SKU, parts to assemble)
Warehouse equipment used (forklift, by hand, robotics)
Specialty storage (reefer)
Value Added services (assembly, packaging labeling)
Order Pickers only work in their own zone

16. Definitions
Within each of these systems, picking can be carried out as:
Pick-To-Order: An Order Picker picks items for one order (each order handled separately)
Batch Picking: An Order Picker picks all items for a group of orders (reduce trips to warehouse by picking same items for group of orders)
Pick-By-Line/Pick-To-Zero: Exact number of items in one product line are available for picking (same type & number of items are delivered until line is exhausted)

17. Processes to Improve Accuracy
Processes with limited technology:
Pick By Label: WMS prints a label for item to be picked and attached to picked item
Issue Pack Optimization: Items in measured lots (pallets, cases, batches)
Pick Task Simplification: Eliminating & combining picking tasks
Order Batching: Grouping orders in a batch to reduce travel time by Order Picker
Move to Forward Pick Location: Large warehouses batch orders for a day and moved to staging area

18. Processes to Improve Accuracy
Processes with technology:
Bar Codes: Item identification in WMS linked to scannable barcodes (SKU, Model/Serial number)
Batch Picking: Radio data terminals in workstations communicate with WMS
Pick-To-Light/Put-To-Light: System scans barcodes to confirm accurate pick or , in a return, put back accurately
Voice Technology: Order Picker receives pick list and confirms pick via headphones

19. Staging of Picked Items
After picking, items are brought together, consolidated and prepared for delivery to customers
Kitting: Individually separate but related items are grouped, packaged and supplied together as one unit