Optimising parcel count in e-commerce fulfilment with mixed-split order picking

E-commerce fulfilment warehouses (e-warehouses) store thousands of items and fulfil thousands of online customer orders every day. E-warehouses are operationally different from traditional warehouses. To accelerate fulfilment speed, an e-warehouse splits multi-line orders across multiple picklists. A key research question is how to manage the flow of picked items so that the number of shipped parcels is minimised. This research introduces the e-warehouse order consolidation (WOC) problem. Tote consolidation is a key link between order picking and parcel packing. We identify key modelling elements and formulate the associated constraints and objectives. The WOC mixed integer program is tested on a series of problems, and we illustrate the operational and business value of controlling the tote consolidation process. Order similarity between totes is used to develop two fast heuristics. Two controllable design parameters are investigated, the number of packing stations and the number of totes assigned simultaneously, on parcel packing efficiency.