Picker routing in the mixed-shelves warehouses of e-commerce retailers

E-commerce retailers face the challenge to assemble large numbers of time-critical picking orders, of which each typically consists of just a few order lines and low order quantities. To efficiently solve this task, many warehouses in this segment are organized according to the mixed-shelves paradigm. Incoming unit loads are isolated into single units, which are randomly spread all over the shelves of the warehouse. In such a setting, the probability that a picker always finds a demanded stock keeping unit (SKU) close-by is high, irrespective of his/her current position in the warehouse. In spite of this organizational adaption, picker routing, i.e., the sequencing of shelf visits when retrieving a set of picking orders, is still an important optimization problem. In a mixed-shelves warehouse, picker routing is much more complex than in traditional environments: Multiple orders are concurrently assembled by each picker, many alternative depots are available, and items of the same SKU are available in multiple shelves. This paper defines the resulting picker-routing problem in mixed-shelves warehouses and provides efficient solution methods. Furthermore, we use the developed methods to explore important managerial aspects. Specifically, we benchmark mixed-shelves storage against traditional storage policies for scenarios with different ratios between small-sized and large-sized orders. In this way, we investigate whether mixed-shelves storage is also a suitable policy if an omni-channel sales strategy is pursued, and large-sized orders of brick-and-mortar stores as well as small-sized online orders are to be jointly processed by the same warehouse.