Consumer behavior is rapidly evolving in favor of e-commerce, supply chains are facing unprecedented disruptions and distribution channels are getting incredibly complex. The much faster than anticipated progression towards online ordering is also resulting in a complex order mix. It isn’t uncommon to have toilet paper and breakfast cereals in the same order.
The shifting paradigm is forcing a change in the fulfillment processes at warehouses and distribution centers. Warehouses today are under immense pressure to deliver goods nationwide within two days if not the same day. Hence it is more important than ever for the Warehouse or Logistics managers to get their picking right. While there are various modes available today to automate and digitize picking ranging from a wearable scanning device to smart glasses, it is the ability to measure key metrics that make all the difference between an efficient and suboptimal picking process.
So what should the warehouse manager measure? Below are some of the key metrics that customers using Hopstack’s Digital Warehouse Software can track to keep a tab on their picking process:
Pick rates
The picking rates are often benchmarked as Order line items picked per hour.
Pick rates can be additionally normalized with the following variables:
- Distance traveled per line item picked.
- Importance of SKUs based on-demand frequency.
Order Picking Accuracy
Picking error is an important phenomenon which if not corrected in time can result in incorrect items being shipped to the customers.
The accuracy can be measured as: (Number of Accurate Orders Picked / Total Number of Orders Picked) *100
Picking errors are often detected in the subsequent step through visual verification, and the inaccuracies typically stem from either of the following:
- Partial Picks
- Inventory unavailability
- Wrong SKU picked
Average pick dwell time
The time interval between the picklist generation to final pick confirmation
Longer pick times indicate suboptimal inventory placement. Shorter pick times, on the other hand, help identify labor cost optimization opportunities
Picker utilization
Measuring picker utilization is essential to understand staffing needs to match the expected warehouse throughput.
Utilization is computed as (Time spent picking /Total working hours per picker)*100.
The time spent picking is easily available from the picking module of the software.
Low utilization rates present labor cost improvement opportunities. Whereas, high utilization rates combined with an increase in order picking error rates indicate the need for additional hiring and training.
Cost per line picked
The metric is often overlooked but is the key component in optimizing the overall distribution cost for every fulfilled order.
It is measured as a Cumulative sum of labor and equipment cost per line item picked.
For further reading on how Hopstack’s platform can move the needle on these picking metrics, check out this article.
