Optimal picking policies in e-commerce warehouses

In e-commerce warehouses, online retailers increase their efficiency by using a mixed-shelves (or scattered storage) concept, where unit loads are purposefully broken down into single items, which are individually stored in multiple locations. Irrespective of the stock keeping units a customer jointly orders, this storage strategy increases the likelihood that somewhere in the warehouse the items of the requested stock keeping units will be in close vicinity, which may significantly reduce an order picker’s unproductive walking time. This paper optimizes picker routing through such mixed-shelves warehouses. Specifically, we introduce a generic exact algorithmic framework that covers a multitude of picking policies, independently of the underlying picking zone layout, and is suitable for real-time applications. This framework embeds a bidirectional layered graph algorithm that provides the best known performance for the simple picking problem with a single depot and no further attributes. We compare three different real-world e-commerce warehouse settings that differ slightly in their application of scattered storage and in their picking policies. Based on these, we derive additional layouts and settings that yield further managerial insights. Our results reveal that the right combination of drop-off points, dynamic batching, the utilization of picking carts, and the picking zone layout can greatly improve the picking performance. In particular, some combinations of policies yield efficiency increases of more than 30% compared with standard policies currently used in practice

Hybrid order picking : A simulation model of a joint manual and autonomous order picking system

Order picking is a key process in supply chains and a determinant of business success in many industries. Order picking is still performed manually by human operators in most companies; however, there are also increasingly more technologies available to automate order picking processes or to support human order pickers. One concept that has not attracted much research attention so far is hybrid order picking where autonomous robots and human order pickers work together in warehouses within a shared workspace for a joint target. This study presents a simulation model that considers various system characteristics and parameters of hybrid order picking systems, such as picker blocking, to evaluate the performance of such systems. Our results show that hybrid order picking is generally capable of improving pure manual or automated order picking operations in terms of throughput and total costs. Based on the simulation results, promising future research potentials are discussed

Design and optimization of an explosive storage policy in internet fulfillment warehouses

This research investigates the warehousing operations of internet retailers. The primary physical process in internet retail is fulfillment, which typically involves a large internet fulfillment warehouse (IFW) that has been built and designed exclusively for online sales and an accompanying parcel delivery network. Based on observational studies of IFW operations at a leading internet retailer, the investigations find that traditional warehousing methods are being replaced by new methods which better leverage information technology and efficiently serve the new internet retail driven supply chain economy. Traditional methods assume a warehouse moves bulk volumes to retail points where the bulks get broken down into individual items and sold. But in internet retail all the middle elements of a supply chain are combined into the IFW. Specifically, six key structural differentiations between traditional and IFW operations are identified: (i) explosive storage policy (ii) very large number of beehive storage locations (iii) bins with commingled SKUs (iv) immediate order fulfillment (v) short picking routes with single unit picks and (vi) high transaction volumes with total digital control. In combination, these have the effect of organizing the entire IFW warehouse like a forward picking area. Several models to describe and control IFW operations are developed and optimized. For IFWs the primary performance metric is order fulfillment time, the interval between order receipt and shipment, with a target of less than four hours to allow for same day shipment. Central to achieving this objective is an explosive storage policy which is defined as: An incoming bulk SKU is exploded into E storage lots such that no lot contains more than 10% of the received quantity, the lots are then stored in E locations anywhere in the warehouse without preset restrictions. The explosion ratio Ψo is introduced that measures the dispersion density, and show that in a randomized storage warehouse Ψoo\u3e0.40. Specific research objectives that are accomplished: (i) Develope a descriptive and prescriptive model for the control of IFW product flows identifying control variables and parameters and their relationship to the fulfillment time performance objective, (ii) Use a simulation analysis and baseline or greedy storage and picking algorithms to confirm that fulfillment time is a convex function of E and sensitive to Ǩ, the pick list size. For an experimental problem the fulfillment time decrease by 7% and 16% for explosion ratios ranging between Ψo=0.1 and 0.8, confirming the benefits of an explosive strategy, (iii) Develope the Bin Weighted Order Fillability (BWOF) heuristic, a fast order picking algorithm which estimates the number of pending orders than can be filled from a specific bin location. For small problems (120 orders) the BWOF performes well against an optimal assignment. For 45 test problems the BWOF matches the optimal in 28 cases and within 10% in five cases. For the large simulation experimental problems the BWOF heuristic further reduces fulfillment time by 18% for Ǩ =13, 27% for Ǩ =15 and 39% for Ǩ =17. The best fulfillment times are achieved at Ψo=0.5, allowing for additional benefits from faster storage times and reduced storage costs

From bricks-and-mortar to bricks-and-clicks: logistics networks in omni-channel grocery retailing

Purpose: The advent of grocery sales through online channels necessitates that bricks-and-mortar retailers redefine their logistics networks if they want to compete online. Because the general understanding of such bricks-and-clicks logistics systems for grocery is still limited, the purpose of this paper is to analyze the internal logistics networks used to serve customers across channels by means of an exploratory study with retailers from different contexts. Design/methodology/approach: A total of twelve case companies from six European countries participated in this exploratory study. Face-to-face interviews with managers were the primary source for data collection. The heterogeneity of our sample enabled us to build a common understanding of logistics networks in grocery retailing on multiple channels and to understand the advantages of different warehousing, picking, internal transportation and last-mile delivery systems. Findings: Bricks-and-mortar grocery retailers are leveraging their existing logistics structures to fulfill online orders. Logistics networks are mostly determined by the question of where to split case packs into customer units. In non-food logistics channel integration is mostly seen as beneficial, but in grocery retailing this depends heavily on product, market and retailer specifics. The data from our heterogeneous sample reveals six distinct types for cross-channel order fulfillment. Practical implications: Our qualitative analysis of different design options can serve as decision support for retailers developing logistics networks to serve customers across channels. Originality/value: The paper shows the internal and external factors that drive the decisionmaking for omni-channel logistics networks for previously store-based grocery retailers. Thereby it makes a step towards building a contingency and configuration theory of retail networks design. It discusses in particular the differences between grocery and non-food omni-channel retailing, lastmile delivery systems and market characteristics in the decision-making of retail networks design

Improving order-picking operations with precedence constraints through efficient storage location assignment: evidence from a retail company

This paper is inspired by a manual picking retail company where shape and weight constraints affect the order-picking process. We proposed an alternative clustering similarity index that considers the similarity, the weight and the shape of products. This similarity index was further incorporated in a storage allocation heuristic procedure to set the location of the products. We test the procedure in a retail company that supplies over 191 stores, in Northern Portugal. When comparing the strategy currently used in the company with this procedure, we found out that our approach enabled a reduction of up to 40% on the picking distance; a percentage of improvement that is 32% higher than the one achieved by applying the Jaccard index, a similarity index commonly used in the literature. This allows warehouses to save time and work faster.info:eu-repo/semantics/publishedVersio

Robotized Warehouse Systems: Developments and Research Opportunities

Robotized handling systems are increasingly applied in distribution centers. They require little space, provide flexibility in managing varying demand requirements, and are able to work 24/7. This makes them particularly fit for e-commerce operations. This paper reviews new categories of robotized handling systems, such as the shuttle-based storage and retrieval systems, shuttle-based compact storage systems, and robotic mobile fulfillment systems. For each system, we categorize the literature in three groups: system analysis, design optimization, and operations planning and control. Our focus is to identify the research issue and OR modeling methodology adopted to analyze the problem. We find that many new robotic systems and applications have hardly been studied in academic literature, despite their increasing use in practice. Due to unique system features (such as autonomous control, networked and dynamic operation), new models and methods are needed to address the design and operational control challenges for such systems, in particular, for the integration of subsystems. Integrated robotized warehouse systems will form the next category of warehouses. All vital warehouse design, planning and control logic such as methods to design layout, storage and order picking system selection, storage slotting, order batching, picker routing, and picker to order assignment will have to be revisited for new robotized warehouses