Process improvement: Innovating pick and pack.

Imagine an order fulfillment center for a big online retailer. How does it work? One can probably think about hordes of people running with order lists picking items and putting them in a bin: pick, bring, pack, ship. This looks like a labor intensive process and it is. In fact this labor intensity was one of the factors that led to demise of Webvan – online grocery store. Fortunately, people learn from mistakes and sometimes change such a mundane process as pick&pack in a bold way. This video explains how (hat tip to Benn Konsynski for posting the link).

It is quite astonishing. The company that provides this sort of solutions is Kiva Systems and apparently Staples uses it in their fulfillment center. What made me think though is the simulation of shelves moving on the warehouse floor. It looks like the system is actually self-organizing: the most popular items will naturally be situated closer to pick workers, just because they are frequently demanded and will not have much time to drift away. More over if demand changes over time, the system will reorganize itself. Perhaps it will still make sense to put Teddy bears out front for Valentine’s day, but if you forget about chocolates they will get there anyways.

One thing that is not shown in the video is how do you replenish inventory. A solution it seems would be to ‘decomission’ an empty shelf and replace it with a full one. Given that all pick operations are logged, it should be fairly easy to figure out when the shelf is about to empty and prepare a replenishment. What happens if there is more than one kind of items on the shelf? It’s inevitable that one SKU will be sold out before the other, but I imagine grouping complementary products can help.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s