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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.
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.
Thanks to recent technological advancements and the demands of omnichannel retail today, RFID technology is now seen in a whole new light within the speed-driven logistics landscape.
Here's what's driving all the attention: businesses today are under incredible pressure. Customers want their orders to be fast and accurate, and they want to know exactly where their order is at all times.
With rising costs, unpredictable supply chains, and customers who expect instant updates, businesses are increasingly turning to RFID technology for faster fulfillment, real-time accuracy, and smarter operations.
But is RFID truly the future of logistics? Or are we simply getting caught up in another tech trend?
In this article, we break down what RFID inventory management really is, how it works, and what makes it superior (or not) to traditional barcode systems. We'll also explore the benefits, challenges, and use cases that matter most to fast-scaling eCommerce businesses and 3PLs.
RFID (Radio Frequency Identification) inventory management uses radio waves to automate identification and tracking processes throughout a warehouse or supply chain. Compared to manual spreadsheets or barcode-based systems, RFID is faster, more scalable, and more dynamic.
Instead of having your team manually scan barcodes one by one, each item is tagged with a unique electronic identifier (RFID tag). This allows teams to track inventory wirelessly and with greater precision.
You donât have to shut down your operations to do a cycle count or use math formulas to determine the ideal order quantity. With RFID, your team gains real-time, accurate insights into the location and quantity of everything. All without the need for line-of-sight scanning.
In short, RFID inventory management enhances accuracy in inventory management, reduces manual counting and human errors, and improves visibility across supply chains.
Hereâs how an RFID inventory management system works in practice:
RFID makes an even more measurable impact when used for:
Before we dive deeper into RFID's benefits, let's break down the essential building blocks that make it all possible. Here are the three core components that power the system:
RFID tags are the identifiers attached to each inventory item. Tags can be embedded in labels, hangtags, or packaging and support item-level tracking for precise data.
They come in two main types:
RFID readers can be handheld devices or fixed-position scanners placed at warehouse entry points, loading docks, or packing stations.
Their ability to read data from multiple items simultaneously allows for faster cycle counts, pallet scanning, or outbound processing. However, its signal strength and reliability can be affected by nearby metal objects or liquids.
This is where all the raw tag information captured by RFID readers gets translated into actionable insights.
Modern RFID systems integrate with warehouse management systems and enable seamless integration with ERP systems, providing:
Very accurate, especially if implemented correctly. In fact, a study by Auburn Universityâs RFID Lab found that RFID systems can increase inventory accuracy from a rate of 63% to 95%.
This increased precision helps businesses:
Still, RFID isn't bulletproof.
Metal surfaces and liquid products can interfere with radio signal transmission, potentially causing read errors or missed detections. Although these issues are usually mitigated by strategic tag placement or the use of specialized tags designed for challenging environments.
Hereâs how RFID stacks up against traditional barcode systems:
Ultimately, the choice between RFID and barcode technology depends on your operational requirements, budget constraints, and the value placed on automation versus initial investment costs.
RFID offers significant advantages. But like any tech investment, it comes with a few hurdles. If you're considering RFID for your warehouse or fulfillment center, itâs important to weigh both the benefits and the potential roadblocks.
RFID isnât a plug-and-play solution. But for businesses with high throughput or complex inventory needs, the long-term ROI can outweigh the initial friction.
The total cost of a complete RFID system for most mid-sized businesses can range from $10,000 to over $100,000. But this can vary depending on the size and complexity of your operations. To give you an idea:
Yes, but with caveats. Metal and liquid materials can interfere with RFID signals. But specialized RFID tags, shielding materials, and strategic tag placement can address most of these challenges.
Yes, of course. RFID inventory management can benefit small businesses, particularly those handling high-value items and fast-moving inventory.
A phased implementation (starting with one location or SKU category) can make RFID more accessible for smaller operations.
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.
Thanks to recent technological advancements and the demands of omnichannel retail today, RFID technology is now seen in a whole new light within the speed-driven logistics landscape.
Here's what's driving all the attention: businesses today are under incredible pressure. Customers want their orders to be fast and accurate, and they want to know exactly where their order is at all times.
With rising costs, unpredictable supply chains, and customers who expect instant updates, businesses are increasingly turning to RFID technology for faster fulfillment, real-time accuracy, and smarter operations.
But is RFID truly the future of logistics? Or are we simply getting caught up in another tech trend?
In this article, we break down what RFID inventory management really is, how it works, and what makes it superior (or not) to traditional barcode systems. We'll also explore the benefits, challenges, and use cases that matter most to fast-scaling eCommerce businesses and 3PLs.
RFID (Radio Frequency Identification) inventory management uses radio waves to automate identification and tracking processes throughout a warehouse or supply chain. Compared to manual spreadsheets or barcode-based systems, RFID is faster, more scalable, and more dynamic.
Instead of having your team manually scan barcodes one by one, each item is tagged with a unique electronic identifier (RFID tag). This allows teams to track inventory wirelessly and with greater precision.
You donât have to shut down your operations to do a cycle count or use math formulas to determine the ideal order quantity. With RFID, your team gains real-time, accurate insights into the location and quantity of everything. All without the need for line-of-sight scanning.
In short, RFID inventory management enhances accuracy in inventory management, reduces manual counting and human errors, and improves visibility across supply chains.
Hereâs how an RFID inventory management system works in practice:
RFID makes an even more measurable impact when used for:
Before we dive deeper into RFID's benefits, let's break down the essential building blocks that make it all possible. Here are the three core components that power the system:
RFID tags are the identifiers attached to each inventory item. Tags can be embedded in labels, hangtags, or packaging and support item-level tracking for precise data.
They come in two main types:
RFID readers can be handheld devices or fixed-position scanners placed at warehouse entry points, loading docks, or packing stations.
Their ability to read data from multiple items simultaneously allows for faster cycle counts, pallet scanning, or outbound processing. However, its signal strength and reliability can be affected by nearby metal objects or liquids.
This is where all the raw tag information captured by RFID readers gets translated into actionable insights.
Modern RFID systems integrate with warehouse management systems and enable seamless integration with ERP systems, providing:
Very accurate, especially if implemented correctly. In fact, a study by Auburn Universityâs RFID Lab found that RFID systems can increase inventory accuracy from a rate of 63% to 95%.
This increased precision helps businesses:
Still, RFID isn't bulletproof.
Metal surfaces and liquid products can interfere with radio signal transmission, potentially causing read errors or missed detections. Although these issues are usually mitigated by strategic tag placement or the use of specialized tags designed for challenging environments.
Hereâs how RFID stacks up against traditional barcode systems:
Ultimately, the choice between RFID and barcode technology depends on your operational requirements, budget constraints, and the value placed on automation versus initial investment costs.
RFID offers significant advantages. But like any tech investment, it comes with a few hurdles. If you're considering RFID for your warehouse or fulfillment center, itâs important to weigh both the benefits and the potential roadblocks.
RFID isnât a plug-and-play solution. But for businesses with high throughput or complex inventory needs, the long-term ROI can outweigh the initial friction.
The total cost of a complete RFID system for most mid-sized businesses can range from $10,000 to over $100,000. But this can vary depending on the size and complexity of your operations. To give you an idea:
Yes, but with caveats. Metal and liquid materials can interfere with RFID signals. But specialized RFID tags, shielding materials, and strategic tag placement can address most of these challenges.
Yes, of course. RFID inventory management can benefit small businesses, particularly those handling high-value items and fast-moving inventory.
A phased implementation (starting with one location or SKU category) can make RFID more accessible for smaller operations.
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.
At first glance, inventory management and warehouse management might appear to be interchangeable terms, two sides of the same logistical coin. After all, both deal with products, storage, and the movement of goods.
But in reality, both are distinct systems, each with its own set of responsibilities, technologies, and strategic importance. Today, many businesses still struggle to distinguish where one system ends and the other begins.
In this article, weâll explore what each system does, how they complement each other, and how to decide which solution (or combination) best supports your business.
Ultimately, understanding the critical differences between them is the key to building a more responsive, efficient, and profitable operation.
Inventory management is the strategic process of tracking, ordering, and optimizing stock levels across multiple locations. Itâs the system that ensures your business always has the right products, in the right quantities, at the right time.
âAt its core, inventory management goes beyond simple counting:
Warehouse management, on the other hand, is all about how goods move within a facility, not just where they are. It focuses on the physical control and operation of storage spaces.
If inventory management is your brain, warehouse management is your hands and feet. It governs everything that happens inside the warehouse, from receiving goods to shipping orders.
âA robust warehouse management system (WMS):
The main difference between inventory management and warehouse management lies in the scope and focus areas. While both systems are integral to the supply chain, they differ significantly in their tools, processes, and use cases.
âAccording to Investopedia, inventory management focuses on maintaining optimal stock levels across locations, while warehouse management centers on the efficient handling and storage of goods within the warehouse.
Function
Inventory Management
Warehouse Management
TrackingProduct-level tracking across locationsPhysical location tracking within the warehouseReorderingBased on sales and forecasted demandBased on internal stock levelsFulfillmentSupports order routing and stock availabilityFocuses on efficient picking/packingValuationInventory costing and turnover metricsNot a focus
While inventory and warehouse management often overlap in function, the software systems that power them are designed with different goals in mind. Although both systems integrate with shipping and logistics systems to improve order accuracy and customer satisfaction.Inventory Management Systems (IMS)
Warehouse Management Systems (WMS)
Inventory management focuses on product-level data and availability across your entire operation. Basically, itâs concerned with what you have, where you have it, and when you'll need more.
âWarehouse management focuses on physical processes, location-level control, and movement within a specific facility. It's all about how efficiently you can move products from point A to point B within your four walls.
IMS platforms are typically cloud-based to maintain accurate stock levels across all sales channels. They often include tools for:
WMS platforms leverage advanced tech to run your warehouse at peak efficiency. They are specifically designed for handling warehouse operations and improving throughput.
Inventory management systems are often simpler to implement and scale. Most growing businesses can implement inventory management without major operational disruption.
âWarehouse management systems are more complex and require more setup. They are typically used in large-scale operations where the complexity of movement and fulfillment is much higher.
The main difference between IMS and WMS software solutions is what theyâre designed to optimize. It all comes down to their real-world applications and the problems they solve for different types of operations.
In many cases, businesses use both systems in tandem. This combination provides complete visibility and control, from procurement to picking to shipping.
âYou should consider an Inventory Management System (IMS) if:
You should consider a Warehouse Management System (WMS) if:
Choosing between inventory and warehouse management systems depends on your current scale, growth trajectory, and operational pain points.
PRO TIP: Start with the system that solves your biggest pain point today, and look for solutions that can scale with you.
Yes, IMS and WMS can be integrated for complete end-to-end visibility and control. This allows businesses to sync inventory data with warehouse operations, which improves both forecasting and fulfillment accuracy.
Not exactly. While the two are related, warehouse management is typically considered a complementary system to inventory management. Itâs focused on the execution side of the supply chain, specifically inside the warehouse.
It depends on your business priorities and current operational challenges. IMS is crucial for ensuring product availability and informed purchasing decisions. WMS is essential for fast, accurate fulfillment and warehouse efficiency.
Thereâs a lot that goes into fulfilling a customer order, way more than most people realize. From receiving the order to delivering it to your doorstep, order picking remains one of the most labor-intensive and error-prone processes in the warehouse.
In fact, so many warehouses actually struggle with picking and packing mistakes. Each of these mistakes not only comes with a heavy financial cost but also the potential of damaging customer relationships that took years to build.
In this article, weâll break down seven practical steps that can transform your picking operations, improving operational efficiency and customer satisfaction.
The average pick rate for most warehouses is 50 to 250 items per hour. But this rate varies because of so many factors, including industry, warehouse sizes, and the complexity of the operations.
This is why itâs important that you know where your operation stands based on benchmarks so you can identify areas for improvement, and in turn, you can set realistic performance goals.
Improving warehouse efficiency doesn't happen overnight. But what most operations donât realize is that there are many more actionable ways to make real progress.
The very first step is evaluating your warehouse operations because this helps you identify the bottlenecks and inefficiencies of your operations. Map out your picking process from start to finish, including picking paths, storage layouts, and order processing times.
By doing this, you can pinpoint areas of delays, for example, excessive walking distances, frequent stock-outs, or maybe congested picking zones.
If you havenât already, consider implementing ABC analysis. This prioritizes high-demand items for quick access, leading to quicker order fulfillment.
This layout reduces pick times through optimized layout, streamlines routes within warehouse zones, and overall improves the efficiency of picking processes.
Remember that even the smallest adjustments in your warehouse layout can really help reduce the travel time for pickers.
Different operations require different picking methods. This is why the best method for your warehouse will greatly depend on your order profile, inventory characteristics, and staffing structure.
Even basic technological integration helps streamline picking processes and reduces errors in order picking. Implement barcode scanning for accuracy and use tools such as mobile scanning devices to eliminate paper pick lists.
Integrating Warehouse Management Systems (WMS) can reduce travel distance by optimizing pick paths and ensuring real-time inventory updates. There is also a voice-directed picking that keeps pickers' hands free while providing clear instructions.
Remember that even the best systems and layouts still underperform without proper training. Companies that train staff on best practices in picking can help them understand all the standardized picking processes and become familiar with the technology in use, leading to more efficient operations.
ShipHero's intuitive system dashboards and automated workflows reduce the learning curve for new pickers. The clear visual guidance makes the training more effective, ensuring consistent performance across teams.
You can't improve what you don't measure. So, implement and monitor key performance indicators (KPIs) to identify improvement opportunities and recognize top performers, whose techniques can be shared with the team.
Here are some performance metrics to monitor:
When inventory is disorganized or inaccurate, pickers waste valuable time searching for products, waiting for bin filling, or replacing pallets. This is why inventory replenishment strategies are important for an efficient picking process.
âInventory management tools from ShipHero provide optimization across multiple warehouses and alerts for automatic replenishment. This makes sure that the right products are always available in the right locations.
You can also organize products by popularity, size, and other relevant picking factors to optimize storage for faster and easier picking.
ShipHero's Pick-to-Light system improves the overall picking efficiency through visual guidance. It uses LED displays to guide pickers to the exact location of items, accelerating the picking process and reducing errors at the same time.
Pick-to-Light stands out for a few key reasons:
In warehouse operations, speed and accuracy are often viewed as competing priorities. But in reality, speed without accuracy creates returns, customer service issues, and rework that ultimately affect overall efficiency.
When customers receive incorrect or incomplete orders, their trust in your business is immediately affected, regardless of how quickly you resolve the issue.
The most successful warehouses recognize that there has to be a balance in both because many of the same improvements that increase speed also enhance accuracy.
Order Accuracy Rate (%) = (Number of Accurate Orders / Total Orders) Ă 100
To calculate the order accuracy rate, divide the number of perfectly fulfilled orders by the total number of orders shipped, then multiply by 100 to get a percentage.
This metric directly impacts both customer satisfaction and your operational costs. This is why 99.5% or higher is the recommended target accuracy rate.
Error rate monitoring is critical because it can reveal patterns in your error rates. Maybe there are specific shifts or seasons where you are more error-prone, or products that are commonly confused.
Here are a few smart ways to reduce mistakes on the floor:
For manual picking operations, a good pick rate typically ranges from 80 to 150 items per hour. Note that for both manual and automated picking, the rate varies significantly based on warehouse size, item types, and complexity of orders.
Yes. Picking speed can be improved without automation simply by reorganizing high-velocity items, implementing batch picking methods, or redesigning pick paths.
That said, tech solutions offer far greater speed and accuracy benefits. For example, operations using advanced systems like Pick-to-Light can achieve a pick rate of 200-350 items per hour.
Automation enhances visibility of picking errors, tracks accuracy rates across orders, and even utilizes KPIs to improve picking speed.
Yes, mobile devices can help increase warehouse picking speed by eliminating time spent handling paperwork and manually recording picks.
ShipHero's mobile-optimized picking solutions provide improved pick paths, real-time updates for inventory changes, and immediate verification. Plus, it integrates seamlessly with handheld devices like scanners and smartphones, minimizing the learning curve.
From the moment stock enters your warehouse to the second it ships out, inventory control is the backbone of a smooth, error-free supply chain. Â
Done right, it prevents issues like mis-picks, spoilage, mis-shipments, out-of-stocks, overstocks, and costly delays. Done poorly and you'll be fighting fires daily: dealing with wrong shipments to customers, running out of bestsellers during peak season, watching perishable goods expire on shelves, the list goes on.
A strong inventory control system ensures that youâre always working with the right amount of stock, not too much, not too little. It enables your business to prevent stockouts with timely replenishments, reduce excess stock and shortages, and make cost-effective purchasing decisions driven by real-time insights.
Read on as we break down the different types of inventory control systems and explore proven methods for managing inventory more effectively, helping you find the right fit for your operations and scale smarter.
Inventory control systems can be categorized into two primary types: periodic and perpetual. Each has its place depending on your operational scale, available resources, and business model.
As defined by the CSCMP, these systems help businesses track stock levels and streamline warehouse operations through either manual periodic counts or continuous real-time monitoring.
With a periodic inventory system, inventory counts are done manually at regular intervals. Think monthly, quarterly, or annual physical inventory checks.
This traditional approach involves physically counting all stock to update inventory records and is typically used by small businesses with low inventory turnover. If your operations are straightforward, periodic control may work.Pros:
Cons:
A perpetual system uses technology for real-time tracking of inventory as items are received, moved, or sold. This often includes barcode scanning, RFID technology, and integrations with inventory management platforms, such as ShipHero.
Perpetual control requires an upfront investment in software and employee training, but the benefits of accuracy and automation far outweigh the costs.
âBenefits include:
If youâre struggling with overstocking, constant reordering, or poor forecasting, itâs time to re-evaluate your method. But choosing the right inventory control method isnât one-size-fits-all. It depends on your business size, industry, product mix, and the degree to which demand fluctuates.
In this section, we break down the most effective inventory control methods used across industries today.
FIFO ensures the oldest inventory is sold or used first. Itâs especially effective for perishable goods or products with expiration dates (e.g., cosmetics, food, pharmaceuticals). This method reduces the obsolescence of inventory items by maintaining proper stock rotation.
ABC Analysis categorizes inventory based on value and consumption:
This method allows prioritization based on product demand and supports cost-effective purchasing decisions by allocating resources where they'll have the biggest impact on profitability.
EOQ is a formula-based method that calculates the ideal order quantity to minimize warehouse storage costs. Itâs particularly effective for businesses with steady demand and predictable lead times.
While EOQ works best for steady, predictable demand, it improves cash flow through better stock control by balancing capital investment in inventory and preventing rush orders at premium prices.
FSN classifies inventory by how quickly it moves:
This approach provides data-driven insights on demand patterns, revealing which products move quickly versus those gathering dust. This method optimizes space utilization in warehouses by strategically placing fast-moving items in prime picking locations.
With VMI, suppliers take responsibility for maintaining stock levels and replenishing inventory based on usage data. This collaborative approach works particularly well for high-volume, predictable items where supplier expertise can enable consistent stock levels, reducing your inventory management workload.
Batch tracking monitors inventory by lot or batch numbers throughout the supply chain, which is critical for regulated industries.
âBenefits of this method include:
The inventory methods we discussed above are already powerful. But they become even more effective when combined with tactical techniques that enhance performance and accuracy.
JIT supports just-in-time (JIT) methodologies by receiving goods only as needed for immediate use or sale. This technique is ideal for companies looking to minimize warehouse storage costs and reduce tied-up capital.
âRisk Alert: JIT is sensitive to supply chain disruptions. Consider backup plans or safety stock buffers.
Simply put, safety stock acts as a buffer against supply delays or sudden demand surges, while reorder points trigger automated replenishment when inventory hits a certain level. This approach stabilizes operations and ensures customer satisfaction even during demand spikes.
âWhy it matters:
Instead of shutting down operations for full physical counts, cycle counting involves regularly auditing portions of inventory. Cycle counting also allows continuous verification of stock levels, which helps catch discrepancies early. This technique improves accuracy with minimal disruption.
Average costing values inventory based on the weighted average cost per unit. This technique simplifies accounting and cost-of-goods calculations, smoothing out price fluctuations over time.
âUse case:
Many businesses rush into inventory control methods without proper evaluation, resulting in expensive false starts and frustrated teams. The truth is, your ideal approach depends on a range of variables, including your inventory size, product diversity, order volume, and the level of visibility and automation you want.
But how do you know what works best for your operations? Hereâs how to approach that evaluation and choose the right fit.
OUR BEST TIP: Start by piloting one or two methods. Test methods on a subset of SKUs before full implementation, then monitor performance and adjust based on what aligns best with your operations and goals.
FIFO and periodic inventory control are widely used due to their simplicity and ease of implementation. FIFO is especially common in industries that handle perishable goods, while periodic control is more commonly used by smaller businesses.
When your inventory is under control, everything else falls into place. Inventory control methods, such as cycle counting and automated reordering, eliminate the hidden costs and operational friction that drain resources daily. They help streamline every stage of your operations from purchasing to fulfillment.
The result?
Yes. Many businesses combine various methods and techniques to meet their diverse operational needs. For example, a retailer may use FIFO for perishables, ABC for prioritization, and JIT for high-demand items to strike a balance between efficiency and flexibility.
Inventory control focuses specifically on tracking, regulating, and optimizing stock levels to ensure your system matches what is actually on your shelves.
Inventory management is a broader umbrella that encompasses control, as well as strategic decisions such as forecasting demand, negotiating with suppliers, planning seasonal inventory builds, and optimizing the entire supply chain.
What happens when your inventory records donât match whatâs actually sitting on your shelves? Orders get delayed. Customers get frustrated. And your bottom line takes the hit.
Thatâs why your choice between perpetual inventory vs. physical inventory impacts your entire business. Inventory tracking is crucial for operations, profitability, and customer satisfaction; so, selecting the right method is essential.
In this guide, weâll break down what each inventory method involves, how they differ, and when to use one over the other. That way, you reduce discrepancies and streamline inventory management better than ever.
Perpetual inventory is a system that involves continuous updates to inventory levels as transactions occur. Every time an item is sold, returned, or received, your inventory system logs that movement instantly.
This method relies on automated tracking systems, such as barcode scanners, RFID tags, and point-of-sale (POS) integrations, to track, record, and update inventory data in real-time.
Because it provides real-time stock information, you get instant visibility into your goods, making it easier to detect issues, avoid overstock and stockouts, and manage inventory purchases effectively. Plus, it reduces human error in stock counts by minimizing manual intervention.
Perpetual inventory is widely used in large-scale retail and warehouses due to its accurate, scalable, and technologically driven capabilities.
In fact, a study found that implementing an Electronic Inventory Management System (EIMS) in an oncology pharmacy business resulted in a 6.02% increase in inventory accuracy and a 98% improvement in inventory visibility. Perpetual inventory is the go-to solution for any company with high inventory turnover and complex operations.
In contrast, physical inventory is the old-school, manual approach. It requires manual counting at specific intervals, like once a month, quarterly, or annually, to assess inventory levels.
It doesnât rely on live data or automation. Instead, it provides a detailed snapshot of your stock at a given moment. This method is especially common during audits, financial reconciliations, or when a business lacks integrated tech tools.
While itâs more labor-intensive, physical inventory is still used across industries for verification, loss detection, and ensuring accuracy in cases where tech may fall short.
The main difference between perpetual inventory vs. physical inventory is how and how often inventory data is collected, updated, and used to manage your operations.
Letâs take a look at how these differ from the other:
With perpetual inventory, your inventory records are updated automatically and continuously. Every item scanned in or out is instantly reflected in your system. It aligns inventory levels with sales in real-time.
Physical inventory, on the other hand, depends on scheduled counts. It could be cycle counting or a full audit, which happens at specific times, not continuously.
Perpetual systems give you real-time, dynamic data, but errors can occur due to incorrect scanning or software glitches. However, they allow for immediate detection of stock issues and quick adjustments.
Physical counts offer a precise, point-in-time assessment. However, once counted, your inventory data becomes outdated until the next count, resulting in gaps in visibility.
Perpetual inventory minimizes human effort. Technology, automation, and integration with other tools reduce the need for manual work.
Physical inventory is highly labor-intensive. Staff must physically count and verify each product, which increases the risk of human error. It also requires operational downtime.
Perpetual systems involve upfront costs for software, equipment, and training. But over time, theyâre cost-effective. These systems reduce the need for manual labor and mistakes.
Physical inventory may seem cheaper at first, but labor, errors, and time lost during counting add up in your budget, affecting expenses, revenue, and even net income.
If you need fast answers, perpetual inventory gives you real-time, automated updates. In contrast, physical inventory can slow you down. You may need to pause warehouse activities to count, reconcile, and analyze your inventory, resulting in lost time and increased costs.
Small businesses with limited inventory might get by with manual counts. However, larger organizations, especially those with multiple warehouses, benefit significantly from real-time tracking, seamless integration, and scalable automation that support both inventory management and warehouse management.
The best type of inventory system depends on your companyâs size, structure, and needs.
Here are things to consider:
âPerpetual InventoryPhysical InventoryPros
Cons
Choosing between perpetual inventory vs. physical inventory isnât one-size-fits-all. The right method depends on how your business operates, the resources you have available, and the complexity of your inventory.
Hereâs how to decide what fits best:
Ensure that you combine this with an inventory control method to achieve a more efficient inventory management system.
If youâre looking for a reliable way to implement perpetual inventory without the tech headaches, ShipHeroâs Warehouse Management Software is built to simplify inventory tracking with real-time updates, automation, and seamless integrations. Whether you're scaling fast or managing multiple locations, ShipHero helps you stay accurate, efficient, and in control.
Yes and no. Perpetual inventory can be more accurate due to real-time tracking, provided that processes are executed properly, as it offers ongoing visibility into stock levels. Physical inventory is accurate at the time of count but does not reflect live updates or losses occurring between counts.
Physical inventory counts should be performed at least annually to meet financial reporting and regulatory requirements. Many businesses also utilize cycle counting, which involves regularly counting subsets of inventory throughout the year, to maintain accuracy and minimize disruptions.
Yes. A business can use both perpetual and physical inventory systems together. Perpetual systems track inventory continuously, while periodic physical counts validate records, reconcile discrepancies, and support audits. Using both methods improves accuracy and balances real-time monitoring with verification.
Industries that benefit most from perpetual inventory include retail, e-commerce, manufacturing, and distribution. These sectors manage high-volume, fast-moving stock that requires real-time visibility to help avoid overstock and stockouts and maintain accurate records.
Have you ever wondered why your business can be doing everything right and still end up with stockouts or piles of unsold goods? Well, itâs all about how you manage your inventory.
Here, weâll explore various methods to help you optimize your inventory management process and solve your stock problems once and for all. Implementing the best inventory management techniques & methods is the key to turning a good business into a great one. In fact, it directly impacts your profitability, efficiency, and customer satisfaction.
At its core, inventory management is about making sure the right products are available at the right time, in the right quantity, and at the right cost. It is the process of overseeing the flow of goods from manufacturers to warehouses and ultimately, to the point of sale.
Part of inventory management is that businesses should optimize stock levels and ensure timely replenishment so that:
This ensures that your business doesnât run into issues like stockouts or wasteful overstocking, as well as missed opportunities.
And because proper inventory management has a direct impact on your business, it acts as one of the backbones of your businessâs ability to grow and succeed.
Now, letâs take a look at some of the common and widely used methods you can use to manage your inventory more effectively.
Just-in-time (JIT) inventory helps reduce stock levels by receiving goods only when they are needed for production or to fulfill customer orders.
The idea here is to keep inventory levels low, cut storage costs, and reduce waste. This method improves stock efficiency by making sure youâre not sitting on piles of unsold stock.
However, JIT isnât without its risks. For example, a disruption in your supply chain could leave you without the products you need at a critical moment. But when it works, it can reduce excess inventory and keep your warehouse more organized.
Another method is the ABC analysis, which helps you categorize your inventory based on value and turnover. Think of it as a way to prioritize your stock into three categories:
This way, you can focus on the most valuable items and make sure that they are always stocked in sufficient quantities, while still keeping an eye on the less critical goods.
This technique supports demand forecasting as it shows you which items are more important and which ones can wait a little longer.
If you want to figure out the optimal order size to minimize ordering and holding costs, use the economic order quantity (EOQ) formula, so you can control the reordering process without spending too much on excess inventory.
EOQ Formula:
âEOQ = â(2DS / H)
âWhere:
EOQ helps you balance holding costs and availability, so you get stock levels that are aligned with demand.
On the other hand, cycle counting is the systematic process of keeping track of inventory without full physical counts. Here, you check small portions of your stock periodically instead of shutting down operations for bigger counts.
Cycle counting is a continuous process that enables real-time tracking and helps you adjust stock levels before things get out of hand.
Now, safety stock is the buffer or extra inventory you keep on hand to handle unexpected demand surges or supply delays.
To calculate the safety stock quantity:
âSafety Stock = (Maximum Daily Demand x Maximum Lead Time) - (Average Daily Demand x Average Lead Time)
âMonitor safety stock levels to avoid tying up unnecessary cash in goods you donât need.
Next, the reorder point formula determines the exact moment when you should reorder products before running out so thereâs never a delay in fulfilling customer orders.
Formula:
âReorder Point = Lead Time Demand
âWhere:
Knowing when to reorder gives you the confidence that you wonât run out of stock at the worst possible moment.
If you're looking for a more automated solution, a perpetual inventory system can help you keep tabs on every movement of your goods.
Examples of inventory tracking systems include:
This responsive method allows you to track your goods in real time, and it also integrates with warehouse management systems like ShipHero for seamless inventory control. That way, you get to adjust inventory based on demand and make smarter decisions about stock replenishment.
Lastly, Materials Requirements Planning (MRP) is a dynamic software system used primarily for manufacturing processes.
For example, a furniture company uses MRP to plan production schedules and track the materials needed for each order. The software calculates the quantity of raw materials required, like wood, screws, and upholstery, based on the number of pieces to be produced.
If the companyâs stock of wood falls below the required level for an upcoming order, MRP generates a purchase order to replenish the stock before production begins.
MRP ensures that raw materials and components are available for production without overstocking.
Now, when your business starts scaling up, consider more advanced methods for managing inventory. These techniques are often used by larger businesses or those with specialized inventory needs.
The ideal inventory management technique depends on your companyâs size, industry, and specific inventory needs. Key factors to consider include:
In many cases, using a combination of methods works best. You might use ABC analysis to categorize your products, while also using JIT to manage high-turnover items and safety stock for more unpredictable demand.
Such a hybrid approach lets you adapt and meet customer demand without facing shortages, as well as create a scalable inventory management process for your business.
Lastly, follow these tips to ensure long-term success:
Inventory management is the heart of your businessâs ability to stay competitive, reduce costs, and meet customer needs. Without it, even the best strategies and products can fall short.
Optimize your inventory management today, and youâll see the difference.
Yes, automated inventory systems help reduce human errors like miscounts and misplaced stock by tracking items in real-time and streamlining inventory control.
Yes, perpetual systems provide real-time updates, enabling businesses to make better decisions regarding purchasing and sales strategies.
Yes, FIFO minimizes waste by ensuring that older products are sold or used first, reducing the chance of spoilage or obsolescence.
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