For companies with private or dedicated delivery fleets, deciding when to pick, stage, route and load orders can have significant implications for operations and customer service.

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MNS Paper: Choosing the Best Order Picking and Routing
Sequence for Fleet Deliveries
For companies with private or dedicated delivery fleets, the decision of when to pick, stage,
route and load orders can have significant implications for operations and customer service.
Overview
Customer and store orders need to be picked, staged, loaded and routed onto delivery trucks
before trucks can leave a distribution center and deliver product. This means orders need to
be finalized for a specific delivery route in advance of loading and delivery. Once orders are
cut-off, there are advantages and disadvantages to the sequence in which orders are picked
and routed. Three options are:
 Routing Orders First, Then Picking. Orders are cut-off, then routed, and finally picked,
staged and loaded
 Picking Orders First, Then Routing. Orders are cut-off, then picked and staged, and
finally routed (although shipments may be pre-routed by route or zone)
 Concurrent Order Picking and Routing. Orders may or may not be cut-off; orders are re-
leased to be picked and routed at the same time; actual route assignments are
confirmed iteratively
The advantages and disadvantages of these strategies is discussed below. In addition, the types
of operations that may benefit from each strategy is discussed.
Routing Orders First, Then Picking
Advantages. The primary benefit of routing orders early is a more organized outbound
distribution or manufacturing / assembly process. A distribution center (DC) labor and
operations plan can be confirmed in advance and order picking executed to plan. This is
particularly important for operations with a high number of delivery stops, dynamic routing
challenges, or lacking a quality Fleet Routing and Scheduling (FRS) system. As picking occurs,
ideally orders can be staged at the correct dock door or loaded directly onto waiting delivery
trucks to minimize double-handling. (Where trucks can be loaded prior to drivers arriving,
valuable driver time and cost can also be conserved.)
Disadvantages. Often, operations that route orders first do so up to several days before
planned delivery. However, cutting off orders early can harm sales. And if new or late orders
are forced to later delivery days when they could have been accommodated on current routes,
this could increase order lead times or lead to stock-outs. Alternatively, if operations
frequently makes exceptions by adding new or late orders to existing routes, this may require
numerous changes to already planned routes.

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Another disadvantage to routing first is that if system inventory is unreliable or picking
processes error-prone, actual orders picked may not match what has been routed. This may
re-quire re-routing some orders once picking and counting is complete (presuming less product
is picked, orders may be consolidated onto fewer trucks and new routes will need to be
generated. At the least, updated data will need to be re-transmitted to the routing system for
more accurate tracking.
Best for Operations. Logistics operations that route orders first often support distribution or
manufacturing / assembly processes that are complex, dynamic, and require more time to
organize. Conversely with a strong labor force and relatively simple orders, routing may
happen late and still allow adequate time for picking. In fact, some companies may finalize
several routes or sets of routes as late as possible, release routed orders to be picked, then
finalize and pick the next set of routes, etc., until all orders have been routed, picked and
staged. Finally, operations with limited staging area or dock space often route first to reduce
time between picking and loading.
Sample Industries. Retail; Grocery; DSD (e.g. Beverage or Frozen distribution); Lean
Distribution, Assembly and Manufacturing
Picking Orders First, Then Routing
Advantages. The primary benefit of picking orders before routing is to base routing on exactly
the product picked. This is particularly important if DC inventory processes or systems are
unreliable and product may not be available to fill some orders. Another advantage to picking
orders first is to level-load DC labor when demand is otherwise slack. In addition, early order
picking may be necessary when it is difficult to find talented or cost-effective DC labor to pick
product during swing-shifts or night-shifts for next-day delivery operations.
Disadvantages. The main drawbacks of picking before routing are DC congestion, shipment
double-handling and in some cases extra shipment processing. Orders that are picked and
consolidated must be staged somewhere while they are routed; if there is not adequate dock
or outbound space, this may congest other areas of the DC. In addition, some shipments may
re-quire extra double-handling as they are moved not just onto a truck but across perhaps
many docks to a different truck (once routes are finalized).
Also, shipment labeling cannot be completed until the route is known. It is more efficient and
less error-prone to apply shipment labels after routing and before product staging then to add
or change route or zone labels later. Even where shipments are pre-routed or pre-zoned, some
of the labels will be wrong based on final routing, and thus require re-printing and re-
application.
Best for Operations. Businesses that support next-day or same-day delivery often begin picking
before routing is complete because there is limited time for picking, and the full volume of
orders will not be known before orders are formally cut-off. In addition, some orders may have

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to load early on outsourced parcel or LTL carriers (i.e., orders for customers in geographic
areas not served by the private or dedicated fleet). Cost-effectiveness of picking labor is also
a consideration; if labor is more expensive during swing-or night-shifts, an operation may
choose to pick early, before routing can be completed.
Sample Industries. MRO (Maintenance, Repair and Operations); Janitorial Supplies; Service
and Auto Parts; Courier / Last-Mile; Restaurant Delivery
Concurrent Order Picking and Routing
Advantages. The main advantage of concurrent order picking and routing is to allow customers
to order until the last moment before product is picked and trucks are loaded for planned de-
liveries. In some spot businesses, this is a necessity since last minute order-taking can generate
higher margins for perishables and urgently needed goods.
Disadvantages. The main drawback of concurrent picking and routing is a disorganized and of-
ten chaotic picking, staging, loading and routing process. Multiple product handling on the
dock and even moving already-loaded product between delivery vehicles (to better balance
final delivery routes) is not uncommon. In addition, there is a higher likelihood of shipment
errors (e.g., missing product pallets, pallets placed on wrong trucks, etc.) even as the ability
to handle additional customer orders is enhanced. Finally, concurrent picking and routing
creates extra work for the router, since he or she must constantly re-shuffle routes as new
orders are accepted and picked.
Best for Operations. Concurrent picking and routing is best for (some would say mostly
unavoidable for) operations where high product margins justify the extra cost of inefficient
DC processes. However, even where margins on spot orders are high, it may make sense to
cut-off orders at an earlier time and ensure higher operations costs do not outweigh extra
revenue potential.
Sample Industries. Fresh Produce; Fresh Flowers; Daily Urban Markets; Courier / Last-Mile;
Fill-In Business
Summary
The table below summarizes the advantages and disadvantages of alternative order routing
and picking strategies.
In practice, most operations tend to route before picking orders if they are able. This ensures
a more organized outbound shipping process and avoids extra handling and/or re-labeling.
Only where inventory systems or picking processes are unreliable — or where delivery
commitments do not allow routing first — do most companies choose to pick before routing is
finalized.

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Concurrent picking and routing is used primarily in spot distribution operations where orders
are cut off very late or where there is not enough time to finish routing before picking must
begin.

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Pros and Cons of Alternative Order Picking and Routing Sequences
*Picking for distribution operations; Manufacturing / Assembly for production operations.
Method Advantages Disadvantages
Routing before
Picking*
 More orderly DC planning and
execution
 Reduces dock congestion and
double-handling since
shipments can be staged at the
planned door or placed directly
onto the truck
 Load trucks in advance,
conserving valuable driver on-
duty time and reducing labor
costs
 Supports lean manufacturing
 Potential denial of late customer
orders on current routes
 Routes and route data may need to be
adjusted based on actual picked
product
 May require more expensive and/or
less trained pickers during night shift
or another typically off-duty shift
Picking* before
Routing
 Routes exactly based on the
orders and product picked
 Better utilizes DC labor during
otherwise slack demand
 For operations supporting next-
day orders, can be more cost-
effective to utilize day labor
for picking
 May support later ordering,
thus increasing sales
 Extra order handling and labeling,
leading to additional labor and error
potential
 Potential for dock or aisle congestion
since product cannot be directly
loaded onto trucks
 Loss of carrier flexibility since picked
orders may not all fit on existing
private or dedicated fleet (e.g. could
have been moved to next day’s
routes)
Concurrent
Picking* and
Routing
 Accommodates last-minute
customer or store orders and
order adjustments
 Increased routing time and cost
 May require handling orders and
product multiple times
 Higher likelihood of order loading
mistakes
 May delay outbound trucks while
awaiting final orders or order
adjustments