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What are the Different Types of Order Picking?

When fulfillment operations are considered as a whole, it’s easy to see why shipping and warehousing receive most of the technical praise.

Shipping is the face of every e-commerce delivery, and fulfillment warehouses are incredibly advanced structures capable of housing an astonishing amount of inventory.

Behind the scenes of e-commerce is a series of sophisticated fulfillment operations that ensure the successful delivery of online purchases, and therefore the continued business of online customers.

What Is Order Picking?

Few, if any, consumers consider the complicated operations that ensure the successful delivery of an e-commerce package to their doorstep.  Most are simply happy to receive their online purchase on time and in one piece.

However, the backbone of every successful online shopping experience is not shipping, warehousing, or even the internet, but order picking, which accounts for more than 50% of all fulfillment center operations.

Order picking refers to the process of removing items from inventory to fill customer orders.

Order picking is a fulfillment center’s most complicated, labor-intensive, and essential operation; therefore, it’s also its most expensive.

Different Types of Order Picking

Consequently, fulfillment centers who conduct their order picking operations with the utmost speed and accuracy are, unsurprisingly the most successful.

There are several different types of order picking methods, all of which are engineered to increase the speed, accuracy, and overall efficiency of fulfillment operations.

Single Order Picking

Single Order Picking refers to the picking process wherein a “picker” journeys into a vast warehouse to pick order items from inventory to fill a single order at a time.

Though the single order picking process is the most commonly employed picking method, it is not the most efficient. In most cases, the sequence in which a picker is likely to find, pick, and fill SKU items is not optimized to increase speed or accuracy, thus wasting time and money.

A Warehouse Management System (WMS) provides the exact location of SKU items in a warehouse and optimizes a pickers route to retrieve it.

Batch & Multi-Batch Order Picking

Fulfillment centers who employ Batch and Multi-Batch order picking methods enjoy a step up on those who employ a single order picking method.

Pickers utilizing a batch order picking method utilize a WMS to pick SKU’s from the warehouse to fill more than one order at a time, thus eliminating unnecessary trips to the same area of the warehouse.

Batch & Multi-Batch order picking methods are, in most cases, compatible with automated systems.

Zone Picking & Passing

Different SKU items have different storage requirements; thus most warehouses are divided into specific zones that are specially equipped to house different SKU items.

Warehouses that utilize the zone picking method typically “pick and pass” SKU items from zone-to-zone to be packaged and shipped from a central order consolidation location.

However, it’s not uncommon for different zones to function independently of other zones in the warehouse.

A refrigerated warehouse, for example, may include a “frozen” zone that consolidates and ships frozen orders independently of the “dry” and “reefer” zones to maintain the integrity of frozen SKU items.

Autonomous Order Systems

Automation technology has significantly affected how fulfillment centers pick and fill SKU items. In fact, a growing number of fulfillment centers have become fully, or partially autonomous.

Autonomous Order Systems generally include a sophisticated array of tracks and automated pickers who utilize artificial intelligence to find and retrieve specific totes from inventory and deliver them to designated consolidation areas.

Within the consolidation area, an employee or another automated system selects the requested SKU item and positions the tote on a track to be returned to its designated position within the warehouse.

Final Thoughts

Fulfillment centers are incredibly sophisticated operations that support the astoundingly vast e-commerce industry, but without an equally sophisticated order picking system, even the most well-funded fulfillment center is bound to fail.

The best way to ensure your fulfillment operations are optimized for speed, accuracy, and success is to trust them to the fulfillment experts here at Flowspace. Click below to get a quote today!

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E-Commerce is an industry driven by speed, efficiency, and convenience.

If e-Commerce is how you make your living, then everything depends on the cost of storing, filling and transporting your inventory, and how fast you can deliver it to your customers.

Where to Position Your e-Commerce Fulfillment Shipping Locations

Product sourcing and efficient shipment delivery are the biggest obstacles for e-Commerce retailers large and small.

When combined with the rising cost of transportation and a crippling lack of available warehousing space it can be nearly impossible to turn a profit and provide quality service to your customers.

What to Consider

According to Annual State of Logistics Report, compiled by the Council of Supply Chain Management Professionals, of the $1.45 trillion spent on warehousing and shipping in the United States, $900 billion is spent on shipping and transportation costs.

The substantial cost in transportation comes from the increase of e-commerce shipments to customers who do not live within a feasible range of the warehouse that stores and distributes the product.

To stay competitive e-Commerce retailers must offset the cost of transportation and warehousing.

The larger online retailers accomplish this by positioning their e-commerce shipping locations as close as possible to their customers.

The largest online retailers also possess the buying power to dictate shipping costs to shipping providers like UPS, FedEx, and DHL.

However, the vast majority e-commerce retailers do not have the buying power to dictate the cost of transportation; nor do they possess the means to open a new fulfillment center every time they expand their customer base.

Thus, the solution to the rising cost of e-Commerce shipping and fulfillment for many online retailers is outsourcing their logistics to a third-party fulfillment center.

How to Find the Best e-Commerce Fulfillment Shipping Locations

Third-party fulfillment centers are springing up all over the United States to meet the rising demand for efficient, cost-effective fulfillment services.

However, as the old saying goes, the most important thing to remember when choosing a third-party fulfillment center is “location, location, location.”

An e-commerce fulfillment shipping location that is too far from your customer base will increase the cost of shipping.

Whereas a fulfillment centers at the heart of major population centers are likely to cost more in terms of the cost per square foot of warehousing space.

Where you decide to position your fulfillment shipping location is essential to success as an e-commerce retailer, but to find the right place you need to start with some data

Ship-to Location Data

Ship-to location data enables e-commerce retailers to determine the viability of utilizing a specific e-commerce fulfillment shipping location and the associated costs such as:

Freight & Fuel Market trends – Market trends determine the availability of carrier service providers in a geographic area.

Proximity – The proximity of a warehouse to major population centers and transportation hubs are critically important in determining the cost of land, labor, and transportation.

Land, Labor & Transportation – Real-estate is always more costly near the water and major population centers.

Warehousing space and labor are in short supply and high demand in the areas that are in close proximity to major population centers, and transportation hubs.

Storage & Inventory Costs

In general, an e-commerce retailer should position their fulfillment shipping location as close to their customer base as possible to offset transportation costs.

However, e-Commerce retailers typically service customers in a range of different locations. Therefore, many e-Commerce retailers are forced to store their inventory in multiple locations.

Unfortunately, for many small to medium size businesses restructuring an entire distribution network to service a small number of far-flung customers is rarely a feasible business strategy.

Considering the rising cost of transportation and warehousing space, the cost of storing inventory in multiple locations can grow to unmanageable levels very quickly.

The only solution e-commerce retailers in need of multiple fulfillment centers is to unleash the power of on-demand warehousing.

The Solution is On-Demand Warehousing

On-Demand service is quickly becoming the new standard for transportation and warehousing.

On-demand warehousing enables a business to quickly increase their warehousing and distribution capacity in regions expecting a drastic increase in demand, or the opposite should they be expecting a drastic drop in demand.

By utilizing on-demand warehousing, e-Commerce retailers can position their fulfillment shipping locations where they will most effectively respond to demand without exerting the extra cost, time and effort of securing additional warehousing and transportation for their inventory.

Flowspace will help you get into a fulfillment center that will be close to your customers to save on shipping costs. Get a free quote today!

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The holiday season is full of cheer, presents, and tasty food for consumers across the country.

However, for the retailers charged with keeping store shelves stocked with inventory, the holiday season is a frenzied scramble to forecast, service, and adapt.

How Do Retailers Prepare For The Holiday Season

If you’re a retailer looking to sail through the holiday season without any significant disruptions or hiccups, then you probably haven’t had the pleasure of working in the retail business during the holiday season.

The holiday season brings joy and happiness to most Americans, but it also delivers high consumer and market demands, unpredictable weather, rapidly changing buyer forecasts and unexpected delays in the supply chain.

As a retailer, the best way to ensure a smooth transition through the holidays is to prepare for the worst and hope for the best.

Extend Shipping Cut-Off Date

The two most important shopping weeks of the holiday season are the final week before Christmas (accounting for 12-14% of overall transaction), and the Cyber 5 stretch.

The Cyber 5 stretch refers to the five days between Thanksgiving and Cyber Monday that are critical to driving sales over the holiday season.

Top retailers prepare for these hectic shopping periods by extending shipping cut-off dates for as long as possible.

Extending the shipping cut-off date enables a brand to increase its expected shipping allowance and capitalize on a larger section of final order volume.

It also decreases the time from when a shopper confirms their purchase online, and when the order is shipped.

Stress-Test Your Infrastructure

Purchase intent is high during the holiday season which makes it a great time to capitalize on consumer interest in your brand.

Most retailers experience strong sales performance during the holiday seasons which can put an overwhelming amount of stress on any system.

Before the holiday season, e-commerce retailers should stress test their systems and ensure they will have the ability to adapt to and overcome the excess stress exerted by the outsized demand.

Forecast From Last Year’s Data

Accurate forecasting during the holiday season is exceptionally important. It reveals consumer buying patterns and enables retailers to predict the sales and plan for a surge in consumer demand.

Retailers should utilize their sales data from previous holiday seasons to establish deals with vendors and place bulk orders at a discount.

Discounted bulk orders enable retailers to offer better holiday deals without taking a loss, and ensures enough inventory for the holidays.

Secure Transportation Ahead of Time

If you think finding transportation for your palletized inventory is difficult throughout the rest of the year, then you are in for a surprise when the holidays roll around.

Come October, truck markets dry up faster than mugs of eggnog at the family Christmas party.

Top retailers like Amazon, Walmart, Kroger, and Costco buy up all the available trucking capacity to ensure they will have the logistics infrastructure to deliver orders to their customers.

To avoid being left in the cold without the means to ship products to customers, retailers should reach out to their shipping providers before the holiday season to secure transportation.

Don’t forget to utilize shipping data collected from previous holiday seasons to forecast your logistics requirements accurately.

Develop Battle Plans

In the world of retail, things tend to go from bad to worse during the holidays. It is essential for retailers to develop battle plans and prepare for a worst-case scenario.

Weather Related Shipping Delays – It is not at all uncommon for the weather to delay the supply chain.

The winter regularly buries retailers, trucks, and fulfillment centers in feet of snow that shuts down operations and halts shipping of any kind.

Retailers should be prepared with alternate shipping, storage, and inventory options for when the weather invariably exerts itself on your holiday operations.

Let’s not forget that treacherous conditions may also prevent your team from making it work. Retailers should have a plan such a scenario as well.

Demand is Higher Than Forecasted – What is your team going to do if they run out of inventory? How do you plan on compensating customers who were oversold?

These questions and any related to out of stocks missed transfers, and broken vendor promises should be answered before the holidays.

Systems Crash – Does your team have the ability to receive, fill, and ship orders without an order fulfillment or transportation management system?

Retailers should prepare for a systems crash and train their employees in alternate methods of collecting, filling, and shipping customer orders.

In Summary

The holiday season can bring high sales, increased brand awareness, and define a company’s strategy for the on the coming year.

Therefore, it is essential that retailers do everything they can to prepare for the frenzy of the holidays and ensure that their infrastructure, their forecast and their team are ready for anything.

Flowspace can assist retailers with their holiday warehousing and fulfillment needs. Get a free quote today!

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The San Francisco Bay Area is the second largest port area in California, which puts it in league with some of the busiest ports in the world.

The Bay Area is centrally located on the west coast, conveniently nestled between Los Angeles in the South, and Seattle to the North.

Thus, the Bay Area serves as the logistics, warehousing, and supply chain hub of Northern California and the majority of the west coast of the United States.

What Are the Top Warehousing Locations in the San Francisco Bay Area

The Bay Area of Northern California is an ideal location to find cost-effective warehousing with features beneficial to e-commerce fulfillment, and an efficient supply chain.

What to Consider

Location & E-commerce – E-commerce is reshaping the way supply chains need to think in order to compete on the global scale.

Now, more than ever supply chains must consider the location of their warehousing as it pertains to transportation, warehousing, and fulfillment costs.

Distance from Port – An important aspect of any warehousing & fulfillment operations is the distance of the fulfillment center from the port where their freight is offloaded.

In general, the closer a fulfillment center is to a commercial port the lower its transportation cost.

However, warehousing in close proximity of a commercial port is generally more expensive than warehousing further away.

Due to its proximity to the Port of Oakland, the Bay Area is ideally located to serve as a supply chain hub for businesses with customers anywhere along the west coast.

Port of Oakland – According to the California Department of Transportation, the Port of Oakland is the fourth largest port in the nation, handles trade from Pacific Rim countries, and delivers 99% of ocean containers passing through Northern California to the rest of the nation.

Land, Labor, and Transportation- The Bay Area of Northern California is centrally located along the west coast. Interstates 80, 580, 280, 505, and a plethora of state freeways intersect in the Bay Area enabling easy transportation anywhere in the state of California and the Western United States.

Land and labor costs are generally more expensive the closer one gets to the Port of Oakland; however, cost-efficient commercial areas surround the entire Bay Area.

Warehousing Locations in the Bay Area of Northern California

San Francisco – The cost of warehousing space anywhere in San Francisco is bound to be more expensive due to its proximity to the Port of Oakland.

A 2010 Bizcost report found warehousing in San Francisco to be the most expensive in the country, with new construction costs as high as $24.4 million.

Businesses who choose San Francisco as their warehousing location are recommended to lease space rather than begin new construction.

San Jose – Located a mere 45 miles from the Port of Oakland, San Jose is a cost-effective alternative to warehousing space in expensive San Francisco.

East Bay – According to CBRE, the East Bay industrial market vacancy rate fell to 4.2 percent in the first quarter of 2015, averaging $6.72 per square foot of warehouse space and $8 per square foot of manufacturing space.

Oakland – Oakland is home to the Port of Oakland. Due to proximity to the port, transportation costs for warehouses in Oakland are often very low.

However, the cost of warehousing space per foot is on average more expensive than Bay Area cities further inland.

Stockton – Stockton California is home to one of the busiest intermodal rail hubs in the country as well as one of its largest inland ports.

Stockton is little more than an hours drive from the Port of Oakland and located with easy highway access to Northern, and Central California.

Other cities in the Bay Area that are conveniently located and offer a cost-efficient ratio of transportation and warehousing costs include:

• Richmond
• Hayward
• Alameda
• San Leandro
• Sacramento
• Modesto

The Bay Area of Northern California may not be the most cost-effective location to establish one’s warehousing and fulfillment operations.

However, some would argue that the Bay Area efficient and convenient transportation of goods anywhere along the west coast.

E-commerce is growing at the rate of consumer demand, and whether your product is on its way to Florida, or Chicago, there is a good chance it came through the Port of Oakland and the Bay Area of Northern California.

Finding warehousing locations in the Bay Area could be strenuous work. Flowspace is here to make warehousing and fulfillment easy. Get started today!

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The terms “warehouse” and “fulfillment center” are often used interchangeably. The buildings share similar functions, and physical differences between the two are slight.

However; they are not the same. The buildings differ drastically concerning utilization and the goals of their operations.

What is a Warehouse?

A warehouse is a large, spacious building where finished goods are stored until redistribution to the consignee. (retailers, wholesalers, distribution centers)

The shape, size, and function of a warehouse are, in part, determined by the type of inventory that it is meant to house. (retail product, CBG’s, etc.) In general, there are six different types of warehouses.

Private Warehouse- A warehouse, or network of warehouses owned by one organization and used in support of that organization’s supply chain.

Public Warehouse- Public warehouses are typically sub-leased to retailers in need of extra inventory space.

Automated Warehouse- An automated warehouse utilizes technology, robotics, and even some forms of AI (artificial intelligence) to automate their processes and minimize the number of employees required to conduct operations.

Climate-Controlled Warehouse- A climate-controlled warehouse is designed to house refrigerated, frozen and temperature sensitive inventory.

On-demand Warehouse- The function of an on-demand warehouse is to provide short-term storage, transportation, and service of inventory for retailers on a month-to-month basis.

Distribution Center- The terms “distribution center” and “fulfillment center” are interchangeable. A distribution/fulfillment center is a type of warehouse, but a warehouse is not a fulfillment center.

What is a Fulfillment Center?

A fulfillment center is similar to a warehouse, and often referred to as a distribution center (DC). Like a warehouse, a fulfillment center is a building in which retailers, and similar organizations, store their inventory until distribution to the customer.

Unlike a warehouse, however, a fulfillment center is typically operated by a third-party logistics provider (3PL) who provides inventory storage and host of other operational functions, including freight transportation, handling cross-docking and, most importantly order fulfillment.

What’s the Difference? Fulfillment Center vs. Warehouse

The most significant differences between a fulfillment center and a warehouse are the extent of the operations carried out within and the customers they are intended to serve.

Customers- Warehouse operations generally serve B2B customers.

Fulfillment centers, however, are designed to service direct-to-customer, and online orders, better known as e-commerce and B2C.

Operations- Inventory ships in and out of a warehouse on a shipping pallet. Thus the majority of the logistics operations that take place at warehouse concern a freight carrier, or even an intermodal provider.

Inbound inventory shipments arrive at fulfillment centers palletized, but they ship out as a parcel sized shipment.

E-commerce retailers manage to ship products to customers across the country, and the world because they utilize a network of fulfillment centers.

A fulfillment center is intended to store inventory for a minimal amount of time, fill e-commerce orders and ship orders directly to the customer.

Goals- The goal of a warehouse is to safely and efficiently store inventory for an extended amount of time, typically several months to a year.

A warehouse is generally limited to housing no more than a handful of different inventories, for an extended period.

The goal of a fulfillment center, on the other hand, is to fill and ship orders in the least amount of time possible.

Fulfillment centers are not designed to store inventory for more than a few months; they are very expedient and streamlined in their operations.

Thus, it is possible for a fulfillment center to manage the operations for countless e-commerce retailers.

Fulfillment centers and warehouses are very similar, and it’s easy to confuse the two. The best way to remember their differences is to consider geometry class.

Comparing a fulfillment center to a warehouse is like comparing squares and rectangles. All squares are rectangles, but all rectangles are not squares.

Every fulfillment center is a warehouse, but a warehouse is not a fulfillment center.

Flowspace has hundreds of warehouses around the country who can handle your inventory. Get started today!

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California’s economy is the 5th largest in the world. Nearly 40% of all imported freight into the United States funnels through California, and nearly half of that product is consumed in California.

These statistics are in part due to California’s large population, which qualifies it as the most populous state in the U.S. Such a large population is bound to consume a lot of resources.

However, many are surprised to discover that much of California’s economic activity takes places in the greater Los Angeles area.

What are the Top Warehousing Locations in the Los Angeles Area

The reason why Los Angeles is such a hot spot for commerce is the area’s proximity to the two busiest ports in the United States; The Port of Los Angeles and The Port of Long Beach.

The two ports combined funnel approximately 30% of all freight into the U.S, which is a statistic that is estimated to grow exponentially with the evolution of e-commerce.

In fact, according to the CBRE more the 1.2 million sq. ft. is needed to accommodate the rapidly growing warehousing needs of the e-commerce industry.

Before you flock to California in a 2018 rendition of the California gold rush there are several warehousing facets that first needs to be considered.

What to Consider

Port Proximity- The proximity of a warehouse to the Port of Los Angeles or the Port of Long Beach is critically important to determining the cost of land, labor, and transportation.

Land, Labor, & Transportation- Real-estate is always costlier near the water, and the same rule of thumb applies to warehousing in Los Angeles.

Warehousing space and labor are in short supply and high demand in the areas that are in close proximity to either port.

However, due to the proximity of warehouse spaces in the area surrounding the ports of LA and Long Beach, transportation and drayage costs are often significantly lower.

Inventory Turn Rate- In general, the quicker a warehouse turns its inventory the closer it should be in relation to a port. A quick inventory turn-around amounts to a constant flow of containers and trailers from the port.

Businesses can reduce the cost of transportation by locating their warehouses as close as they can to either the Port of Los Angeles or the Port of Long Beach.

Los Angeles

Los Angeles is home to the nation’s two busiest ports; the Port of LA and the Port of Long Beach. Because both ports reside entirely within the city of Los Angeles, a number of areas have developed into prime warehousing locations.

• Carson
• Rancho Dominguez
• San Pedro
• Santa Fe Springs
• South Gate
• Torrance

However; the two areas that are in closest proximity to either port is the South Bay area and Long Beach.

South Bay

South Bay encompasses the area immediately surrounding the Port of Los Angeles. Drayage and transportation costs are low; however, land and labor costs can be exuberant, if you can find them.

Long Beach

Long Beach is obviously the ideal location for warehouses with a steady supply of freight from the Port of Long Beach but, like the South Bay area, labor and vacant space is challenging to find.

Orange County

Orange County encompasses the region just south of Los Angeles and falls within 25-50-mile port proximity. Orange County is home to more than 300 million sq. ft. of warehousing space which is distributed between the towns of:

• Irvine
• Anaheim
• Buena Park
• Brea
• Foothill Ranch
• Fullerton

Inland Empire

The Inland Empire lays sixty miles east of Los Angeles and comprises the towns of:

• Chino
• Corona
• Fontana
• Mira Loma
• Ontario
• Rancho Cucamonga

Inland Empire offers much in terms of available warehousing space, modern warehouses, competitive real-estate costs and a low cost of living. Accordingly, drayage and transportation costs are approximately 30% higher than warehouses with closer port proximity.

E-commerce is growing at the rate of consumer demand, and whether your product is on its way to Maine, or Texas, there is a good chance it came through the Port of Los Angeles.

Those looking to capitalize on the growth of e-commerce should do so as close to the action as they can. For warehousing in 2018, the Los Angeles area is the place to be.

Flowspace has multiple warehouses in Los Angeles who can handle your inventory. Get started today!

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