Hi Guys, Hope you have read my previous post where we discussed a distinguishing characteristics of a Retail Warehouse, especially if it offers or sells via the e-commerce channel, which is personalization. In this blog, we are going to discuss about another most important process in the Outbound side of a Retail warehouse which is similar to Picking because it also consumes a lot of labor and that is Packing. In fact, in many warehouses there’s as many people in packing as there are in picking. And so the process needs to be efficient.

Packing on the blueprint takes place obviously, after picking. So it will be down here again towards the end of the outbound process.

Products will flow in totes from the piece-pick area on carts to a packing station. At some places they might induct those totes and they’ll have a little cheap conveyor that drives them over to the packing station. But most places just park the pick carts right adjacent to the packing stations and pack them out. So let’s talk about in a little bit more detail what goes on and what the requirements are associated with packing.

Packing is a really important process because it’s the last point that an order can be verified that what’s in the box is actually what’s supposed to be in the box. There’s three things that have to happen at a packing station.

The first thing is that the order needs to be checked to make sure the items that were ordered are actually present. And there’s a couple of different ways to do that.

The second thing is that the box that the order is going to go into needs to be chosen in such a way that it’s not too big and it’s not too small. You don’t want to ship a little thing in a really big box because it’s expensive.

The third thing is the box needs to be labeled. And it can either be labeled with a carrier’s compliance label, if it’s being shipped by small parcel, or it could be a very simple label that has nothing but the barcode that represents the order number that’s attached to it.

Finally, the other thing that’s really important to talk about here is the packing slip itself because in some packing stations, it gets printed out at the packing station. But it can also be preprinted beforehand, and placed into the box at the time of packing. We are going to dig into that packing slip requirement as well as the cartonization requirement up next.

Packing Requirements | Cartonization

Cartonization is a fancy word for using the computer to figure out what size bag or box should be used for a given order.

You have to keep in mind that at most e-commerce companies and brick-and-mortar retailers, there’s a whole suite of different kinds of boxes that could be used for an order. And, the size of the box or the bag that’s chosen has been a decision that’s been left up to the packers.

And so they have been able to look at what they had to pack out, and then they had a suite of boxes overhead or below or whatever, and they would just grab what they wanted and stuff it into that particular size box.

That worked to some degree, but probably everybody has had experiences like in the picture where a lithium battery which is a little teeny-tiny thing, came in this gigantic box.

And that’s happened because, some packer either didn’t have a box nearby of the appropriate size, didn’t care, or whatever, they’re sometimes incented on the number of orders they pack an hour, so doesn’t matter to them if they grab a big box or a little box. So they just grab whatever was close by and packed it in that.

And you can see in this picture, it’s really important when you’re trying to pick into the shipping carton, that you choose the right box at the start; otherwise, at the end of the process, you have to tear it all apart and rebox it into something new and you waste a whole bunch of time. So the requirement here is that we need the system to choose a box of the appropriate size for the order. And this information needs to be communicated to the packer in some way. It needs to either come out on the invoice that’s showing you this is the box size you need to use or it needs to pop up on the screen when they scan the invoice so it says this is the kind of box you ought to use. Because the size of the box is really, really important.

Why Cartonization Matters?

The reason that cartonization really matters, is that the way in which small parcel carriers charge you for their services, has changed.

For few years, if you were shipping a package, really just about anywhere in the world, the costs that you were going to be charged were going to be driven off of two things: where that package was going and how much it weighed.

So as you can see in this zone chart above, if you have a DC in Miami, the cost of shipping a package to, say, Georgia or anywhere in the Southeast was quite different from, say, shipping it to Oregon or Washington or someplace very, very far away. Likewise, if it was a heavier package, it would cost you more as well. Now, what they didn’t charge you for was the size of the box. It didn’t matter. If you wanted to put it in a little box or a big box, they didn’t care. So the function of the cost or the shipping price was just a function of where it’s going and how much it weighs.

Price = f(destination, weight)

Well, when the small parcel carriers started looking at this and they realized that a lot of their trucks cubed out before they weighed out. And so they also realized that there were a lot of shippers who put things in boxes that were really inappropriate for the items. Kind of like you saw that lithium battery that was squeezed into that gigantic box. That just makes no sense. So in recent years, the game changed dramatically. And today the cost of shipping is now a function of destination, weight, but also the size of the box.

Recent Price = f(destination, weight, size of box)

Which means it’s really, really important to make sure that the products that are ordered by the consumer or the store go into a box of the appropriate size. So it’s really important to get the packers the information they need to decide what type of box this order needs to go into to avoid having to pay transportation charges that are above what you should be paying. So cartonization functionality is important. And don’t be surprised if warehouse managers want to know what can they expect about where does the packer get that information so that they will put the product into the proper size box.

Packing Requirements | Packing Slip

Now let us turn our attention to another detailed packing requirement, and that’s the packing slip. Some people call this the invoice; other people call it the pro forma invoice or collate. But this is the piece of paper that goes along with the merchandise ordered by a consumer when they’ve ordered something over the Internet or through a catalog.

This tends to be something that gets overlooked. And the effort required to make it work right is grossly underestimated. Because a packing slip is really more than a simple list of the items they ordered with the prices and maybe the pick location, that there’s all these little things that need to be built into this form that people tend to miss. For example, you have to have a peel-away return label. Well, that return label has to have the invoice number on it, as you see in the picture. So you’ve got to make sure that prints out. You also have things like the insert suggestion. See how it says send catalog? What that means is that this particular customer is a new customer and there’s been some kind of flag downloaded with the order or maybe it’s actual logic embedded in the WMS somehow to say this is a new customer so we need to make sure they get a catalog inserted into their order. Whereas somebody that’s already been ordering regularly, they don’t really need to have a catalog perhaps. So that’s a logic that you have to build into the packing slip.

Take a look at this one. And we’ll kind of go around and talk about each of these kind of individually. But this has got lots and lots of information on it that is unique logic. Let’s kind of go in a clockwise fashion.

Up here we have gift with purchase and backordered lines. Well, there’s sometimes products that will be given to a consumer for free without them even asking for it if they order certain things together. Well, you would think that would be something that the ERP system would download with the order, but sometimes it’s not. And so consequently what you have to have is some type of logic in the packing slip itself to tell the packer that they need to put that object inside of this order, and they’ll usually have a stack of them or something next to the packing station. So they’re used to doing this, but they need to be triggered to do it. Also if you have something that’s backordered, you need to be able to show that it’s backordered.

Gifts during Christmas time, Diwali and the holiday seasons, that go out, don’t need to have pricing to show up. So you might get two invoices or two packing slips – one that has the prices on it that gets sent to the person who bought the stuff via the regular mail in maybe an envelope, and then the packing slip that goes with the merchandise has no prices on it.

Certain companies will want to include a message line that is only seen by the packer. In this case this whole piece of the invoice gets torn off. So this isn’t going to go to the consumer, but over here they’ll have little messages that the person that took the order can put in there for the packer. Little things to help the packer know you really need to be careful or this is for an executive.

Also you’ll see that in some places they want to print out the carrier tracking label before they actually weigh the package and do everything else, and they want that in a fashion that can be peeled away by the packer and put on the package.

Here’s again all that important box size. If you want to send a gift message with your order, then you can put that in the gift message area down below and it will peel away and they can put it on a little gift card and put that in with the package.

Here’s something, very common is the return label. And, again, it has the invoice that you see down there or the invoice number. So if this merchandise gets sent back, it’s very simple to process it.

Indicating the shipment charges on the invoice. If you use two boxes versus three boxes, that shipping charge might be different. So the order entry system doesn’t know how many boxes you’re going to end up putting this stuff into, so that shipping charge might be something that’s calculated in the background before this is printed out.

All of these things make the packing slip really complicated. So I hope you got a better understanding on Packing business process and the importance of Cartonization and Packing slip for Packing, that’s what you should expect a Retail Warehouse manager to be asking about.

In the next blog, we’re going to look at Manifesting which is really the last step in the process of shipping a carton via small parcel at the Outbound side of a Retail Warehouse.

Feel free to reach out for any clarifications. If you like my blog posts then comment and subscribe to the blogs.

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