How a Pick and Pack Warehouse Saves Money

Packing oranges at a co-op orange packing plan...

Image by The Library of Congress via Flickr

Until recently most companies believed that the most efficient way to do business was to handle all of the supply chain logistics for the business  in house instead of outsourcing those processes to fulfillment centers or other providers.

 After many cost comparisons and rapid growth in the amount of fulfillment providers available business executives realized that outsourcing order fulfillment would cost a lot less and increase customer satisfaction.  The rise in Ecommerce was made possible due in no small part to the ability of small business owners to outsource the packing and shipping of items to customers.

The cost/benefit analysis of outsourcing logistics became something that every business needed to perform to ensure maximum efficiency for minimum cost.  Logistics is a system that ensures the prompt and efficient delivery of goods and services to consumers. It accomplishes this by focusing on three essential services: storage, transportation and supply chain management. The most popular storage and shipping technique today is called pick and pack.

More often than not, companies will outsource this essential service.  The costs of each business performing shipping operations in house were often the most expensive part of the operational cost. When businesses realized that paying a company that already had an efficient pick and pack shipping system in place was substantially cheaper than maintaining a warehouse and eating the cost of employing customer service and warehouse workers outsourcing became incredibly popular. Another substantial saving for these companies was the savings from not having to built or install and maintain complicated computer systems to manage the orders that came in and the shipment of those orders.

With the help of smart computers designed to make the shipping process as efficient and cost effective as possible  the modern pick and pack warehouse runs like a Swiss watch. The computer generates a list of all orders and employees then “pick” these products off of the shelves and “pack” them for an upcoming shipment. Probably the most complicated part of the process is making certain that bulk orders have all been unpacked and that employees have easy access to them. Once this is done, coordinating shipping manifests is simply a matter of following the order forms.