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Whatâs the fastest way to lose a sale? Having your best-selling item out of stock.Inventory replenishment methods, strategies, and models are the behind-the-scenes heroes of any product-based business. They ensure stock availability across locations and keep your shelves from being empty. When done correctly, replenishment helps you stay ahead of the competition by miles.In this guide, weâll break down the core inventory replenishment strategies, show you how to pick the right one for your business, and walk you through the best models to keep your stock and profits right where they should be.
Before you can optimize anything, you need a game plan for inventory replenishment. This becomes the foundation for determining when to order, how much to order, and why, which is a critical part of effective stock control.
Periodic replenishment refers to the practice of restocking inventory at fixed intervals, such as weekly or monthly, regardless of actual demand. Itâs a great starting point for businesses with predictable cycles and tight schedules.
Unlike periodic replenishment, continuous replenishment maintains a constant monitoring of inventory levels in real-time. Once stock dips below a certain point, it triggers restocking based on inventory thresholds automatically.This method is highly responsive because it adjusts to inventory changes in real-time, avoiding delays, stockouts, and disruptions in customer order management.
Push replenishment sends inventory based on forecasts, while pull replenishment relies on actual sales data to determine restocking needs.
You can also blend them. For example, use push to prepare for a product launch and pull to adjust once sales data comes in. A hybrid system works well to replenish stock in line with seasonal trends while still adjusting to real-time demand.
Just-in-Time (JIT) is exactly what it sounds like: inventory arrives right before itâs needed. This minimizes overstock through demand-based ordering.
With vendor-managed inventory, your suppliers are the ones who monitor inventory levels for timely replenishment. This creates smoother supply chain management and reduces guesswork.VMI ensures a supply-aligned approach to replenishment, syncing supplier actions with your inventory needs and sales velocity to support broader supply chain optimization.
Next, we need to choose our replenishment model. This depends on your product type, customer behavior, and operational capabilities. Choose a strategy that aligns replenishment with demand forecasts and data analysis so you avoid overstocking slow movers and understocking best-sellers.To do so, work on the following first:
Start simple. Use one model, track your performance metrics and KPIs, and adjust as you scale.
Now, letâs get into the models to choose from. These models use data-driven insights for order quantities, making restocking more predictable and precise.
EOQ helps you calculate the ideal order size that minimizes both holding and ordering costs. Itâs great for stable, predictable demand.Formula: EOQ = â((2 Ă Demand Ă Ordering Cost) / Holding Cost)When used effectively, EOQ can significantly enhance your cost management and return on investment (ROI).
Reorder point models are straightforward: they trigger restockingwhen the stock level reaches a minimum threshold. The ROP formula takes into account average demand and supplier lead time.ROP = (Average Daily Usage Ă Lead Time) + Safety stockDynamic inventory software automatically updates reorder points based on sales velocity and inventory data, so fast-moving items never fall behind. That way, youâll avoid stockouts while keeping your stock levels lean and efficient.
Many businesses use ABC classification or analytics tools that track item popularity for more accurate restocking. This classification sorts inventory by value. To do so, base your inventory plan on your itemâs worth:ClassificationValueRecommended QuantityReplenishment StrategyA-itemsHigh valueLow quantityMonitor closelyB-itemsModerate valueModerate quantityPerform regular reviewsC-itemsLow valueHigh quantityManage in bulk
Safety stock is your insurance against supply delays or demand spikes. It helps maintain quality control and smooth order processing times.To calculate safety stock in the simplest way, use this formula:Safety Stock = (Maximum Daily Usage Ă Maximum Lead Time) â (Average Daily Usage Ă Average Lead Time)Keeping a buffer boosts customer satisfaction and avoids you telling your customers that youâre out of stock.
A solid replenishment strategy balances lead times with stock levels, helping you stay agile without overcommitting to inventory. In fact, having real-time inventory systems led to a 25â30% reduction in stockouts, 15â20% fewer overstock incidents, and a 30% increase in customer satisfaction, according to the Journal of Recent Trends in Computer Science and Engineering.Hereâs why you should implement your own inventory replenishment strategy:
A proper resource allocation strategy helps you stay stocked, cut costs, and keep customers happy. So, don't just manage your inventory. Optimize it. ShipHero's fulfillment platform offers real-time inventory visibility, predictive stock replenishment, and seamless NetSuite integration to automate your workflows and eliminate costly stockouts. With over $8B in GMV shipped annually and a 99 %+ shipping accuracy rate, weâre the trusted partner for over 6,500 brands.Get a free quote today.
Yes. Demand forecasting is necessary for inventory replenishment because it anticipates future product needs. This enables businesses to align their inventory levels with expected demand, particularly in high-volume or seasonal markets, thereby reducing stockouts and excess inventory.
Yes. Automated replenishment reduces inventory costs by minimizing human error, streamlining decision-making, and preventing overstocking or last-minute orders. Automation leads to leaner operations and consistent stock availability.
Yes. All businesses that sell physical products need a replenishment plan to avoid stockouts or overstocking. While the tools and complexity may differ, a structured approach helps manage inventory effectively across all sizes and industries.
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While your team is still walking aisles, your competitors are cutting pick times in half with automation. Guess whoâs shipping faster and stealing market share?
Automation isn't the future anymore. It's the present. For growing eCommerce brands or fulfillment centers under pressure to deliver faster, cheaper, and more accurately, automated warehouse picking systems are no longer a luxury. They're a necessity.
In this guide, you'll learn how automated picking systems work, the types available, how to choose the right one, and how ShipHero can help you streamline fulfillment processes with confidence.
Automated warehouse picking systems use software, robotics, and real-time data to locate, retrieve, and prepare items for shipment, without relying solely on human labor. Instead of employees walking long distances and manually selecting items, automated systems bring items to workers or direct them with tools like lights, voice commands, or mobile robots.
For example, in the eCommerce space, brands use Goods-to-Person (GTP) systems to increase operational efficiency and efficiently handle large catalogs of SKUs. In retail, where seasonal order surges can overwhelm manual processes, automated solutions help companies double their picking speed and maintain consistent fulfillment even during peak demand.
The process is surprisingly seamless:
This flow is driven by smart software that integrates with warehouse management systems and supports key warehouse processes, including picking, packing, and tracking real-time inventory.
Want a deeper look at the tech behind it? Read this guide on warehouse automation software.
Thereâs no universal solution for warehouse automation. The best picking system depends on your space, order volume, and the variety of products you offer. Some work better for high-SKU, high-volume operations; others are ideal for smaller, more focused setups. Below, we break down the top systems and which warehouse types theyâre best suited for.
GTP systems deliver inventory directly to a stationary picker, eliminating walking marathons. This setup enhances inventory management, reduces physical strain on workers, and improves worker safety.
It also optimizes order accuracy by minimizing human error. By minimizing walking time and keeping pickers in one place, GTP systems significantly boost pick rates while also cutting down on labor fatigue.
Pick-to-Light is an automated solution that uses LED light bars to guide workers to the right location for picking items, enhancing accuracy, speed, and efficiency while reducing errors.
When paired with Pack-to-Light and Receive-to-Light, your entire workflow is streamlined. Pack-to-Light ensures precise packing, while Receive-to-Light optimizes inventory storage and retrieval. Together, these technologies simplify inventory management, reduce labor costs, and accelerate fulfillment.
At ShipHero, we offer all three solutions, Pick-to-Light, Pack-to-Light, and Receive-to-Light, under one roof, seamlessly integrating with your existing systems to optimize warehouse operations. The combination can help boost efficiency by 20% while also cutting costs by up to 30% for batches of 10 to 30 orders.
Pickers wear headsets and follow voice commands to locate items, like a GPS for your warehouse. This hands-free approach automates repetitive tasks, shortens training time, and reduces picking errors, even in noisy environments. It also improves accuracy, even in noisy environments where traditional methods might fall short.
AMRs, or autonomous mobile robots, navigate the warehouse floor independently, delivering items or bins to human workers or packing stations.
Unlike fixed systems, AMRs offer greater flexibility and adapt to varying warehouse sizes, support scalable operations, and offer the flexibility to grow without major infrastructure changes. Theyâre also highly scalable, which makes them a smart choice for warehouses looking to grow or adjust operations without major infrastructure changes.
These are high-tech racking systems equipped with robotic cranes or shuttles that automatically store and retrieve inventory. Theyâre especially well-suited for large warehouses with high inventory turnover, where speed and space efficiency are critical.
Businesses that need to maximize vertical storage find these systems invaluable, and industries such as pharmaceuticals, automotive, and electronics often benefit the most from their precision and scalability.
Still not convinced? The real-world benefits speak for themselves. Automation significantly reduces human error, particularly in fast-paced warehouse environments where accuracy is crucial. It also speeds up fulfillment, often cutting pick times in half or more.
By streamlining operations, businesses can lower labor costs by either reducing headcount or reassigning team members to more valuable tasks.
By transitioning to automation, companies often see dramatic improvements in efficiency and cost savings. For example, automation can reduce warehouse labor costs by up to 60%, allowing businesses to reallocate resources and scale more effectively.
Itâs not always smooth sailing when implementing automated picking systems. One of the biggest hurdles is the high initial investment, as hardware, software, and integration can come with a steep upfront cost.
Staff training is another challenge, as teams need time to learn how to use the new technology effectively. There can also be short-term disruption; installation and onboarding may temporarily slow down operations. But the long-term gains are often worth it.
For example, James Enterprise struggled with paper-based picking and processing delays before switching to ShipHeroâs Warehouse Management System.
The transition required workflow changes and staff training, but with proper planning, such as going paperless, reorganizing their layout, and utilizing smart pick paths, they boosted productivity by 38%. New hires cut their pick time from 55 to 34 seconds in just five days, proving that smart automation pays off.
Finding the right automated picking system starts with understanding your specific needs. Warehouse size plays a big role, as larger spaces often benefit most from solutions like AMRs or AS/RS that can cover more ground efficiently. If your business manages a high variety of SKUs, systems like GTP or voice picking can offer the flexibility and accuracy you need.
For those working with tighter budgets, starting with light-based or voice-guided systems can provide a solid foundation without breaking the bank. Regardless of your starting point, scalability is crucial; your system should be able to grow in tandem with your business. Partnering with ShipHero ensures you get expert, customized guidance and future-proof solutions designed specifically for your operation.
Implementing warehouse picking automation isnât just about installing new tech; itâs about doing it strategically. To get the most out of your investment and avoid common pitfalls, follow these proven best practices:
âBest Practices for Successful Warehouse Picking Automation
For example, Black Wolf Nation and its 3PL arm, ONE23 Fulfillment, partnered with ShipHero to scale their operations. By adopting ShipHero's warehouse management software, they increased their order volume from 10,000 to over 25,000 per month in less than a year. This strategic implementation allowed them to efficiently manage growth and expand into the 3PL space.
Most companies see a return on investment within 12 to 24 months, depending on the system and order volume.
Yes. Many automated systems are designed to be scalable and cost-effective, which makes them ideal for small warehouses. Solutions like Pick-to-Light and voice picking can start small and expand as your operation grows.
Yes. Advanced systems feature adjustable grippers, sensors, and packaging logic to safely handle delicate or irregularly shaped products.
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Warehouse management systems make daily warehouse operations efficient. And wave planning is at the heart of it.
As part of the supply chain industry where efficiency is of utmost importance, the fast-paced environment of warehouse management requires every aspect of operations to work on schedule. This is where wave planning comes into play and brings efficiency to the table.
It integrates with warehouse management systems and streamlines end-to-end warehouse operations to meet customer expectations of fast shipping and real-time updates.
Wave planning batches orders for optimized picking routes, shipping, and priority. It supports operational workflows and integrates with warehouse wave picking strategies to maximize productivity, reduce errors, and improve overall daily warehouse output.
This turns warehouse operations into an organized process of handling and systematizing hundreds of orders a day.
Applying the best practices for wave management allows for maximum efficiency in managing daily warehouse operations. Start with these:
Not all orders need to be shipped at the same time. Some can wait, others canât. Strategic planning means prioritizing orders based on shipping deadlines to ensure they are shipped out and delivered on time. This increases customer satisfaction and overall operational efficiency. To better understand the core workflows that make this strategy effective, explore how we have explained the six key warehouse processes.
Accessing real-time data allows you to monitor every wave thatâs happening, from orders getting picked up to those that are delayed. This lets you take action accordingly, especially when spotting issues as they are happening.
Downtimes are red flags in wave management. They are equal to unproductivity and possible shipment delays, both affecting operations to meet quotas and customer satisfaction.
Reduce idle time in operations with these methods:
High-demand periods like holidays, promotions, and occasional spikes can cause chaos, especially if you donât have a plan in place. That chaos can overwhelm your normal operations and lead to delays and unsatisfied customers.
Avoid this by ensuring scalability for peak periods with effective wave planning:
If youâre preparing your warehouse for high-volume fulfillment, it may be worth exploring how automated warehouse picking systems can make wave execution more efficient and adaptable.
Warehouses have different zones to which pickers are assigned.
Having specific picking zones gives structure to the picking process, making it easier to execute even through high-volume orders.Having defined picking zones helps:
Wave management gives you the flexibility to adapt quickly when an unexpected change occurs during operations.
A common issue often faced in wave management is the sudden changes in order volume. This disrupts the flow of current waves and may have an avalanche effect on the whole operation if not solved immediately.
Hereâs how wave management adjusts operations to meet demand fluctuations:
A warehouse management system creates an overall plan that controls the flow of a warehouse's production. Using tools and automation, a WMS simplifies and streamlines wave management to execute warehouse operations from fulfillment to packing and delivery.
The main difference between wave planning and wave management is that the former is where the strategizing happens, while the latter is the execution and overseeing that the plan takes place.
Wave planning is the strategic part of grouping what orders should be fulfilled together, setting the time for wave releases, and adjusting them based on warehouse capacity and labor availability.
Wave management is the main operational part where the production happens. It tracks the real-time progress of wave execution to ensure things are running smoothly according to plan.
The main difference between digital and wholesale waves lies in their order size, wave planning, and operational goal. Due to their differences, each wave type requires different planning and strategy.
Digital waves service the B2C channel, are high in volume, and often have small, single-item orders that require urgent or same-day deliveries. The wave strategy used is frequent and short for flexibility. For this wave type, warehouse managers use WMS-integrated mobile devices for tech support
Meanwhile, wholesale waves are for bulk orders, often for retail distribution, resellers, or B2B supply chains. Wholesale waves have a lower order volume with large shipments and more flexible timelines.
Yes, it can be used if they have large volumes of orders per day, orders with time-blocked pickups, or group orders with shipping deadlines.
Yes. eCommerce and retail, grocery and food distribution, healthcare and pharmaceutical, industrial supply, and consumer packaged goods industries are industries that benefit from wave planning. These are industries with high order volume, delivery sensitivity, and high operational complexity.
Yes, wave management is designed to make warehouse operations, including same-day shipping, possible. Wave management creates a structure that speeds up the order fulfillment, speeding up the process for all warehouse operations, such as same-day shipping.
Your warehouse isnât slow because your team isnât working hard. Itâs slow because theyâre working inefficiently. When every picker is chasing orders in random directions, you lose time, increase errors, and risk customer satisfaction.
Wave picking fixes that by turning chaos into coordination. By grouping orders for optimized picking routes and releasing them in scheduled âwaves,â you can streamline picking, reduce walking time, and enhance picking speed, especially in high-volume eCommerce environments.
In this guide, weâll explain what wave picking is, how it works, and how to use it to run a faster, leaner, and more accurate warehouse.
Wave picking is a warehouse picking strategy where orders are grouped and released in scheduled âwavesâ throughout the day. Each wave organizes orders based on factors like delivery time, product type, or warehouse zone, to help your team pick faster, move smarter, and stay organized. When paired with automated warehouse picking systems, wave picking becomes even more powerful, and minimizes manual effort while maximizing speed and accuracy.
For example, a warehouse might group all orders that need same-day shipping into a morning wave, while standard shipping orders are picked in the afternoon. This keeps the flow structured and reduces chaos on the floor.
Brands using wave picking have seen measurable results. A study published in Acta Logistica found that accurately batching and releasing orders in structured waves reduced cycle times by more than 13% compared to unplanned methods, proving how it standardizes warehouse processes and improves resource utilization. This demonstrates how even modest changes in picking structure can lead to significant gains in warehouse efficiency.
Wave picking operates through a structured, three-phase process: pre-wave, wave, and post-wave.
Each stage plays a critical role in coordinating order fulfillment, from organizing batches of orders to guiding pickers efficiently through the warehouse and ensuring fast, accurate packing and shipping. Understanding how each phase works is key to unlocking the full efficiency potential of wave picking.
Before picking begins, the warehouse management system (WMS) organizes inventory for efficiency by grouping orders into waves based on factors like shipping deadlines, SKU type, or zone. It then generates batch pick lists, allocates resources, and ensures that equipment and carts are ready, laying the groundwork for a smooth picking process using proven picking strategies.
Good Company, a 3PL provider, exemplified this by leveraging ShipHero's multi-item batch feature. This streamlined their pre-wave setup, enabling them to group multiple orders with shared items into single picking runs. This drastically reduced picker travel, and as they scaled from 500-600 to 6,000-10,000 units daily within 18 months, allowed them to halve their pick time. This demonstrates the immense power of an optimized pre-wave process.
Once a wave begins, pickers follow optimized routes through the warehouse to collect items. The goal is to reduce backtracking and congestion by assigning pickers to specific zones or paths.
E-Commerce Xpress, an eCommerce fulfillment provider, has significantly streamlined its picking process by adopting ShipHero's Warehouse Management System (WMS). Their previous manual methods caused inefficiencies and excessive picker travel. By using ShipHero's multi-batch order feature, they transformed their picking phase. This technology groups multiple orders into single runs, creating highly optimized routes and eliminating unnecessary trips. The result was profound: E-Commerce Xpress could fulfill 200 orders in just 2 hours with one person, a task that previously required four staff members 4-5 hours. This showcases how wave picking handles peak operational loads and supports multi-order fulfillment with ease.
After items are picked, they move to packing and shipping. This phase includes labeling, verifying accuracy, and dispatching the final product. A well-organized post-wave process ensures orders are completed on time and without mistakes.Consider Vareya, a 3PL and fulfillment company, which dramatically improved its post-wave efficiency and client satisfaction by adopting ShipHero's Warehouse Management System (WMS). Previously, Vareya struggled with disconnected systems, resulting in significant errors and excessive paperwork. By migrating to ShipHero, they automated workflows and shipping labels, ensuring efficiency and accuracy in packing and dispatch. This allowed them to triple business volume and meet customer service levels consistently.
To get the full benefits of wave picking, itâs essential to follow proven best practices that align your people, tools, and workflows. From using the right technology to organizing pick paths and handling carts efficiently, these core strategiesâlike those in our warehouse picking strategies guideâwill help you maximize speed, accuracy, and productivity in every wave.
A powerful WMS like ShipHero automates wave creation, drives real-time decision-making, and optimizes paths. It ensures every wave is precisely executed and synced with inventory.
Calculating optimal picking routes is one of the most effective ways to reduce travel time on the warehouse floor, a major contributor to inefficiency. By using route optimization software, pickers follow the shortest and most logical paths through the facility, thereby avoiding unnecessary backtracking and congestion. This not only speeds up fulfillment but also reduces fatigue and boosts overall productivity, especially in high-volume environments where every second counts.
Efficient cart handling is key to successful wave picking. Organizing carts by order, zone, or SKU reduces sorting time and speeds up packing. This keeps the workflow smooth, reduces errors, and enhances overall fulfillment efficiency.
Wave picking comes in different forms, each suited to specific warehouse needs. Whether youâre handling large SKU volumes, urgent orders, or multiple zones, choosing the right strategy can boost speed, accuracy, and efficiency.
Organizing wave picking by product type allows warehouses to group similar SKUs into the same wave. This reduces picker travel time, as items are often stored near each other, and enables faster, more efficient picking by creating consistent, repeatable paths through the warehouse. Itâs especially useful for high-assortment operations where grouping like products streamlines the process.
Wave picking by order priority ensures that urgent orders, such as express shipments or VIP customers, are grouped and processed first. By releasing these high-priority orders in the earliest waves, warehouses can ensure faster turnaround times and meet strict delivery deadlines, thereby maintaining high customer satisfaction and consistent service levels.
Dividing the warehouse into picking zones allows each wave to focus on a specific area, reducing unnecessary movement and streamlining the picking process. Assigning pickers to dedicated zones allows waves to run simultaneously in different zones, reducing congestion and enabling scalability in operations.
Wave picking is a fulfillment strategy designed to group orders into scheduled "waves" based on factors like shipping deadlines, product locations, or customer types.
This method is especially valuable in high-volume or time-sensitive operations where precision and speed are critical. Below are four key benefits of using wave picking in your warehouse:
Wave picking keeps operations structured, which allows you to process more orders per shift without expanding your physical footprint.
By reducing idle time and unnecessary movement, wave picking streamlines the entire fulfillment process. After adopting ShipHeroâs WMS, American Tall saw a 275% increase in picking efficiency and cut fulfillment errors by 50%, allowing them to scale operations by 400%âclear proof of how structured picking methods lead to faster, more reliable order delivery.
With batch pick lists, scanning, and real-time tracking, wave picking drastically reduces errors in item selection and order completion.
Fewer errors, faster picks, and optimized labor use = lower costs. Wave picking helps you do more with fewer resources.
The main difference between wave picking and batch picking lies in their timing and level of structure. Wave picking organizes and releases orders at scheduled times throughout the day, which is ideal for high-volume warehouses where precise timing and a smooth workflow are essential. This method offers a structured approach that reduces errors and supports scalability, but it requires more upfront planning and a reliable warehouse management system.
In contrast, batch picking allows warehouse staff to pick multiple orders in a single trip without being tied to a specific schedule. Itâs a simpler, more flexible method thatâs well-suited for smaller operations with lower order complexity.
While batch picking is easy to implement and has a lower barrier to entry, it becomes less efficient when dealing with large volumes or time-sensitive orders. Choosing the right approach depends on your warehouse size, order volume, and fulfillment goals.
Yes. Wave picking can scale down for smaller operations to help them improve organization, reduce picker confusion, and streamline fulfillment.
No. Only certain WMS platforms, such as ShipHero, offer full wave picking functionality, including automated order grouping, routing, and inventory syncing.
Absolutely. Wave picking was designed for fast-paced, high-volume environments where timing, accuracy, and scalability are critical.
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