The Impact of Product Packaging Characteristics on Order Picking Performance in Grocery Retailing

Abstract

Increasing labor cost levels and workforce shortages have caused retailers to pay increased attention to their order-fulfillment operations, which continue to largely depend on manual order picking systems. The operations and logistics management literature suggests that optimizing tertiary packaging, which groups products into full unit loads for storage and shipping, is an important way to improve order picking performance. While most retailers handle products at the level of secondary packaging when fulfilling orders, this packaging level remains largely unexplored. To address this gap, we analyze 3,380,596 picks performed by 185 order pickers of 4957 products in a grocery retail warehouse in Germany. Our findings indicate that secondary packaging characteristics directly affect order picking performance and that this effect is moderated by traditional product characteristics (e.g., product weight and volume), as well as elements of warehouse design (e.g., pick and stack levels). From a managerial perspective, our findings may help to bridge the gap between logistics managers and packaging engineers and provoke further research on the trade-off between operational and environmental performance.