Case-Level Picking Economics

Autonomy Bridge · Analytical Definition

The lower labor intensity per unit characteristic of case and pallet warehouse operations, which reduces the savings pool available to justify automation capital relative to each-level ecommerce picking.

Case-level picking economics explains why automation ROI models that demonstrate compelling returns in e-commerce each-pick environments frequently fail to close in wholesale, grocery, or retail DC operations that handle inventory at the case or pallet level. A picker selecting individual units in an e-commerce facility may process 100-200 picks per hour; a picker selecting cases in a grocery DC may process 300-600 cases per hour. More importantly, the labor cost per unit processed is far lower in case-pick environments because each physical touch handles substantially more product. The savings pool automation can capture - the labor cost per unit times the volume displaced - shrinks proportionally. Automation capital costs are not similarly reduced: a case-pick robot may cost less than an each-pick robot, but not by the same magnitude as the labor differential. The result is that the labor intensity threshold for case-level picking economics is harder to meet, and automation investment is economically justifiable in a narrower set of conditions than vendors accustomed to selling into e-commerce environments typically represent.