How is Pick and Pack Distribution Beneficial?
When you have to fulfil customer orders for products, often you might have to assemble a set of items together before shipping the complete package to your customer. Pick and Pack Distribution refers to the process where you receive the multiple components at a warehouse, and there they picked and assembled together by the warehouse staff, and then packaged and shipped to the relevant customers.
If you don’t use pick and pack distribution process, then the option for you is to set up your own assembly area, employ staff to receive, store and repackage the goods, and then send them out.
Both systems of working have their advantages and disadvantages, depending on various factors like the size of the business you are running, kind of products you are selling, what kinds of clients you serve, and so on.
Let us look at these aspects, in order to help you take a decision on what kind of distribution system you want to employ.
Pick and Pack: The Basics
Receiving the goods from different suppliers and storing them in a warehouse is an involved job that sorts and stores items in order to best utilize the warehouse space and logistics. Usually warehouses are shared between multiple businesses. There are different zones for storing items, according to their size classification – like full pallet, half pallet, case, individual item, etc.
A warehouse service provider receives goods meant for different businesses and stores them in the most efficient way possible. In the case of Pick and Pack Distribution, the warehouse staff receive the orders, then pick the items from the respective storage areas, assemble and package them, before sending them out.
Often, the orders are assembled by picking the goods belonging to different companies, as the final product to be shipped might be a composite one.
What are the Advantages of Pick and Pack?
- Cost-effectiveness: Pick and Pack system is cost-effective because the warehouse space is shared and the overheads are distributed between multiple business; plus, the process involves no minimum order sizes and can be extremely flexible. Also, the business can avoid the cost and lead time of setting up their own assembly area and the corresponding staffing.
- Efficiency: It is more efficient to store and assemble the orders from a single location as it reduces the transport and the different agencies involved in reshipping.
- Agile and swift: Pick and Pack is a highly flexible and agile system, as we have seen, because of the elimination of redundant steps in the supply-chain, and is therefore quick and ensures shorter turnaround times for the end to end process.
So- what’s the recommendation for me, then?
Having understood the benefits offered by Pick and Pack, you need to evaluate whether your business will benefit from these efficiencies; and make a choice depending on the business model and processes that you employ. For example, if your final shipped packages are comprised of one or two items only, then it might be better for you to pack and dispatch them yourself. At the other extreme if your end package is extremely complex, requiring specialized knowledge to assemble it, then again it might be better for you to choose another method.
Another consideration for you to bear in mind is whether you enjoy the services of an efficient third-party logistics provider who can provide you these services. Because, Pick and Pack is great if done right, but can be horribly messy if it is in the wrong hands!
But if you need to harvest the benefits of efficient warehousing and outsourced product packaging and shipping, then Pick and Pack is the way forward for you. So, take your call, and be on your way to greater efficiencies!