Order picking
Order picking is the process of collecting items from stock to fulfil a specific order. The picker removes the ordered line items in the correct quantity from their storage locations and stages them for packing and shipping – guided by a pick list or a mobile device.
Order picking refers to the order-based collection of items from available stock. For each customer order or production order, the ordered line items are removed in the correct quantity from their storage locations and consolidated into a unit ready to ship or produce. It is therefore the link between the unsorted storage of many items and the orderly goods issue of a single order – and in retail, e-commerce and manufacturing it is one of the most labour-intensive and cost-driving processes of all.
The task involves more than simply grabbing the goods. It begins with staging an order, moves through route planning and removal (the "pick") and ends with confirming the removed quantity and staging it at a packing station. Because in many warehouses half of all operating costs are tied to picking and travel time accounts for the largest single block of time, the way it is organised largely determines the delivery time, error rate and cost-effectiveness of the entire fulfilment operation.
At a glance
- Order-based collection of items from stock
- Core steps: staging, route planning, removal (pick), confirmation
- Methods: single-stage (order by order) vs. multi-stage (batch/zone)
- Principles: person-to-goods vs. goods-to-person
- Key metrics: pick rate, picking error rate, share of travel time
How order picking works
Every pick follows the same basic pattern. First an order is staged: the system reserves the required quantities in stock and generates a picking order with the line items to be removed. Route planning follows – the sequence in which the storage locations are visited so that the picker travels the shortest possible route. Then comes the actual removal: the employee grabs the item at the storage location, checks it and confirms the removed quantity. Finally the assembled goods are handed over at a packing or staging area.
Technically, the workflow is controlled by a pick list on paper or – predominantly today – by mobile data capture. Handheld scanners, tablets or voice-guided systems (pick-by-voice) and light signals on the shelves (pick-by-light) guide the picker line item by line item through the order and report each removal back to the system immediately. This keeps the book inventory correct in real time and surfaces mis-picks during removal rather than only at the customer.
Person-to-goods and goods-to-person
By staging principle, two basic forms are distinguished. In "person-to-goods" picking, the employee moves to the fixed or chaotically assigned storage locations and removes the goods there – the classic case in a shelf warehouse. In "goods-to-person" picking, conveyor technology, automated small-parts stores or shelf robots bring the goods to a stationary picking station. This eliminates travel time and significantly increases the pick rate, but requires high investment and pays off above all with large order volumes.
Order picking methods
By processing sequence, single-stage and multi-stage methods are distinguished. In single-stage (order-oriented) picking, one complete order is processed in a single pass by one picker – simple and clear, but with a high travel share for small orders. In multi-stage (item-oriented) picking, several orders are bundled: first all items are collected, then in a second step distributed (sorted) to the individual orders.
Two practical variants dominate in mail-order retail. In batch picking, the system combines several orders into a single collection run, so that an item appearing in ten orders is visited only once. In zone picking, the warehouse is divided into areas each staffed by fixed pickers; an order moves from zone to zone or is consolidated at the end. Both methods reduce the share of travel time, but require powerful control by a WMS or ERP.
Why order picking matters
Order picking is the process where the service quality and costs of logistics are decided. An item picked incorrectly or in the wrong quantity leads to returns, back-orders and dissatisfied customers – the picking error rate is therefore one of the most important quality metrics in the warehouse. At the same time the process ties up a large share of personnel costs, because visiting the storage locations and removing items is hard to automate and depends heavily on the range of goods and the warehouse organisation.
Order picking is measured above all via the pick rate (line items or units per hour), the share of travel time and the error rate. Optimisation levers start exactly here: an item-appropriate slotting of storage locations, where fast movers are placed near the goods issue based on an ABC analysis, shortens the routes; chaotic warehousing with dynamic slotting uses space more efficiently; and paperless methods reduce the error rate. Order picking is thus not an isolated action but the result of warehouse structure, order structure and IT control.
Order picking in the ERP system
In the ERP or merchandise management system, order picking is the step between order confirmation and goods issue. The system generates a picking order from the customer order, reserves the quantities in stock, assigns storage locations and provides the pick list or the mobile capture dialogue. Every confirmed removal posts the inventory forward, so that availability and book inventory are correct at all times. For items subject to batch or serial number tracking, the removed batch or serial number is already captured during picking and assigned to the order.
Smaller and mid-sized merchants often cover order picking directly in the ERP, which comes with mobile scanner apps and simple route optimisation. In high-volume or heavily automated warehouses, a specialised warehouse management system (WMS) handles the fine control of routes, zones and conveyor technology and reports the results back to the ERP. Once picking is complete, the system hands the goods over to packing and shipping – in e-commerce often as an end-to-end pick-and-pack process through to the shipping label.
Distinction: order picking, pick-and-pack and fulfilment
The three terms build on one another. Order picking means solely the collection of goods from the warehouse. Pick-and-pack combines picking and the subsequent packing into a single joint work step, as is common in mail-order retail. Fulfilment, finally, is the umbrella term for the entire order processing – from goods receipt and storage through picking and packing to shipping, returns and in part customer service. Order picking is therefore one building block within fulfilment.
Example
Example: online retailer with 12,000 items
An e-commerce retailer for household goods initially picked strictly order by order: for each of the roughly 400 daily orders, an employee walked the entire warehouse with a paper list. The share of travel time was over 60 percent, and transposed digits copied onto the lists repeatedly led to mis-shipments and returns.
After switching to paperless batch picking in the ERP, the system now combines up to 20 orders into a single collection run and guides the picker via handheld scanner along a route-optimised path through the warehouse. Fast movers were placed near the goods issue based on an ABC analysis. Every removal is scanned by barcode and posted immediately. The result: around 40 percent shorter travel times, a significantly lower error rate and an accurate real-time inventory at all times as a basis for procurement planning.
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