Enhancing Warehouse Picking Efficiency Through Integrated Allocation and Routing Policies: A Case Study Towards Sustainable and Smart Warehousing

Order-picking is one of the most labor- and cost-intensive operations in warehouses, especially under the pressures of e-commerce growth and supply chain disruptions. Globally, order-picking accounts for 50–75% of total warehouse operating costs and nearly 55% of labor time, making it a dominant factor in logistics performance. Improving picking efficiency is therefore essential not only for reducing operational costs but also for enhancing resilience and sustainability in logistics. This study investigates the combined impact of storage space allocation and picker routing strategies on performance in a real-world edible oil factory warehouse with a three-block U-shaped layout. Three allocation policies (dedicated, turnover-based class storage, and family-based class storage) and three routing methods (S-shape, return, and midpoint) were tested in nine combinations over a five-week period. Results show that storage allocation has a stronger influence on picking efficiency than routing decisions. The family-based (Class 2) allocation with return routing achieved the lowest weekly picking time, reducing retrieval effort by concentrating items in low-level storage locations. Beyond efficiency gains, the findings highlight how simple, low-cost adjustments to storage policies can reduce picker travel, lower energy use, and support sustainable warehouse operations. This case study provides practical guidance for managers of small and medium-sized warehouses and offers baseline insights for the development of digital twin models and smart warehousing solutions in Industry 4.0.