One of the biggest cost contributors related to warehouse labor efficiency is order picking, contributing up to 36% of the overall labor costs.
The idea of electronic shelf labels (ESLs) is not a new one, and the application of the concept has become fairly common in Europe. But U.S. grocers have been slow to the uptake for a variety of reasons, including a perceived low return on investment. This, however, may be about to change as ESLs evolve to perform tasks that go beyond a quicker price change.
Best Practices and Recommendations to Improve Order Picking Productivity
In addition to reducing energy consumption, the flexible pricing enabled by ESLs enables retailers to strategically price perishable items throughout the day, encouraging customers to buy them before they spoil, said Milner. This freedom allows retailers to graduate pricing based on sales velocity and inventory levels. According to insight from Planet Retail, 65% of consumers would welcome such price changes throughout the day if a product is approaching its sell-by date.
In a highly technological and connected world, many still opt to use manual systems and used paper-based workflows in their warehouse operations. One big example is the use of paper-based pick which, is not only very tedious but is also highly risky and prone to errors. The simple fact of having to go to an office to have pick lists printed is already very cumbersome. Not only that, there is a big chance that the personnel will print the wrong list and go on spending a whole day picking inventories from a previous or totally wrong order.
Optimizing Inventory Management
In addition to labor costs and price competition, inventory management is a newer perk associated with ESLs. Out-of-stocks are a battle that retailers have been facing since the advent of grocery stores, with very few simple solutions in sight.
Cluster Picking Strategy
The key to an effective cluster picking strategy is to make use of multiple containers, usually a multi-tray trolley. In this strategy, an order picker will process multiple orders in one trip, assigning a different container for each order. He will then fill up each container according to the required SKUs as he passes through each picking section.
Batch Picking Strategy
The basic idea for Batch Picking is to have the order picker pick and process multiple orders which involve the same SKU, all at the same time. This will minimize the number of times he would have to return to the same SKU location to pick inventories from several orders.
This innovative system is growing in popularity and is known and proven to improve the efficiency of the picking process, and thus result in greater productivity. The system is easy to use and implement but will require the use of a centralized software that is integrated into the Warehouse Management System. The system then connects to an indicator light installed on the shelves or racks, or to the digital display and indicator LED of various Electronic Shelf Label configurations.
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