Assessing Efficiency in Warehouse Order Picking : A Simulation-Based Approach

This study presents a simulation model capable of evaluating order picking policies in warehouse operations. Order picking is the most time-consuming and costly activity in the warehouse, meaning efficiency improvements can lead to significant cost savings. Models in current literature mostly focus on a fix set of polices, where this study develops a simulation model that can test a wide variety of policies and can incorporate multiple relevant variables. A case study of a warehouse was performed, where a custom-made simulation model was developed, tailored to the specific operations of the warehouse. With this simulation model, a variety of policies can be evaluated on travel distance and other relevant variables. By gathering insights from a literature review and company experts, a set of polices was selected and simulated as scenarios using the simulation model. These scenarios are implementing class-based storage locations, splitting the warehouse into zones, and introducing a small bin. Only the split of the warehouse into zones and introducing a small bin show effective, and therefore they were further elaborated in business cases. This study validates the use of a simulation model for evaluating order picking policies, emphasizing the importance of tailoring models to specific organizational contexts. It identifies a new improvement area in picking cart capacity that is overlooked in current literature. For the case company, this study advocates a hybrid approach for storage location assignment, as a practical contribution. More general, this study contributes by demonstrating how companies can leverage data for decision-making, serving as a valuable example for those looking to become more data driven.