Design of Order-Picking System and Selecting Picking Strategies in a 3PL Firm for Serving Fashion Retailing Companies

Abstract

This study considers a real-life, picker-to-part order-picking system employing humans with multiple picks per route in a third-party logistics (3PL) firm. The 3PL firm has many customers from different sectors. The customer, whose orders are subject to this study, is primarily engaged in retail sales in the fashion industry. Being competitive in the fashion market relies on the ability to be flexible and responsive to meet the customer’s demands. In the fashion business, lead time, delivery reliability, and stock availability are three key elements for satisfying the customer’s perceived service level. The effective management of these three elements is closely linked to the process of distribution and logistics, which implies that the fashion firms should choose and cooperate with an efficient logistics service supplier. To maintain the efficiency of the 3PL firm that directly supports its fashion retailing customers, an order-picking system for the customer’s fashion products is designed. To choose the most appropriate order-picking system, a process flow consisting of strategic decisions, operational implementation, and evaluation and selection (ES) sections is developed. In the operational level of the flow, the pick-and-sort batch-picking strategy with two different levels for the picker number and the synchronized zone-picking strategy with three different zone sizes are utilized as five alternative order-picking strategies based on the considered problem. For each alternative case, corresponding mathematical models of the order-batching problem are solved to maximize the total number of items fulfilled. In the ES section, the order-picking strategy with the lowest cost is selected based on the cost-centric analytical approach for alternative strategies.