Warehouse picking and packing processes: how much labor do you need?

Warehousing is one of the most labor-intensive parts of running a business. In fact, labor often accounts for 50–70% of warehouse operating costs

Reducing labor costs is therefore a top priority for warehouse managers. It requires strategic planning and improvements that balance efficiency with customer service. Modern warehouses use warehouse workforce management tools like WMS software to plan labor, improve warehouse efficiency, and meet customer expectations.

Why make warehouse labor planning a priority?

Poor labor planning creates bottlenecks in core processes like picking and packing, driving up costs and slowing delivery.

In fact, an inefficiently planned warehouse can result in workers walking miles per day - sometimes over ten miles! Every extra handling step adds time, cost, and risk of mistakes. Timely and accurate picking drives on-time deliveries and satisfied customers, while efficient processes cut down travel time and labor costs.

Here at Logiwa, we often analyze warehouses to help provide the most efficient path to customer success. The following is a step-by-step empirical analysis of a sample warehouse, with hypothetical sample figures and scenarios comprised of averages from our customer data.  There are also templates available to help ease this process, one of which is linked at the end of this article.

Elements of warehouse labor planning

To demonstrate, let’s use a sample warehouse with two different types of orders: single-item orders and multi-item orders. The focus will be on optimizing the warehouse picking time standards and ensuring a smooth packing process in the warehouse.

Single-item order picking

Single-item orders are typically picked in batches of 100 orders at a time using a picking cart. This batch picking method reduces the number of locations workers need to visit for each trip. Your warehouse management system should consolidate the same SKUs in a batch to reduce the number of visits to the locations.

Multi-item order picking

For multi-item orders, we use cluster-based batch picking. In this scenario, trolleys are equipped with 12 bins, and the batch size is also 12. This approach streamlines the order picking and packing process and reduces time spent navigating the warehouse.

Find WMS with the picking features you need with this free WMS comparison tool

Three points to consider when deciding your picking batch size

1. Consider the size of the picking cart (or container) and the products in the batch. One batch is assigned to a single employee and one employee can drive one cart at a time. That’s why we should have one picking cart (container) for a batch.
2. Consider the total duration to fully pick your items in a batch. The total duration for a batch should not be more than an hour.
3. Small products can be picked on carts with small cells whereas picking large items would require a pallet or a trolley. That’s why it is always better to create a separate batch for large and small products.

Why optimize the picking and packing process?

Creating a detailed picking and packing process in the warehouse acts as a blueprint for smoother operations. Every step, from setup time to the actual picking and packing, directly affects overall productivity and order accuracy.

Defining the input parameters for labor planning

Infographic showing labor planning parameters and how to define them

Why make a warehouse labor plan?

Making a warehouse labor plan is like laying out a blueprint of how you want your warehouse to run. This helps you understand how everything in the picking and packing process can affect speed and efficiency, from the setup time to the time it takes to pick a batch. As you’ll see when we explain the process below, every second counts!

Order picking parameters

• Step 1: Start by estimating an average “Setup Time” to start the next task ( picking the next job, picking the trolley, etc.) and to finalize the batch ( Moving the trolley to the packing station, etc).
• Step 2: estimate your parameters for the picking process.

Average unique items in a single item order batch: to explain the parameter, let's use a sample. Assume that we have 5 single-item orders. The order and SKU combination are shown below.

The average number of consolidated item quantities for a single item picking job is calculated below

#Avg. Unique Items in a Single Item Order Batch= number of Orders/number of distinct SKUs

Which is 5 / 3 = 1.67.

 This parameter is an estimation based on the number of active SKUs in the warehouse. If you have 100 active SKUs in the warehouse, the parameter could be 10 (It is not “1”, because the distribution of the SKUs will follow a normal distribution, and your warehouse management system will try to consolidate similar SKUs into the same batch). If you have more SKUs, like 1000, then the value may be smaller.

#Avg unique items in a multi-item order batch: We can use the same formula that we explained in the “#Avg. Unique Items in a Single Item Order Batch”. Usually, this parameter depends on the size of the picking batch and the number of active SKUs. You can test different values to estimate your average value.

Total seconds to pick from a location: these parameters may differ from one warehouse to another. It indicates the total time to walk between warehouse locations and to pick the products from the location.

When a picker arrives at a location which is suggested by the warehouse management software,  the user stops by and picks the products from the location. In this sample, the walking time from one location to another is included in the parameter.

Calculated values for order picking

These values are calculated automatically to estimate the duration of the order-picking process.

Total time to complete a single item batch: This value shows the total time required to execute a single item batch. The formula is below:

Total Time = Setup time + (#Avg. Unique Items * Total Seconds To Pick From a Location)

Key metrics: pick rates and error rates

It’s important to benchmark your picking performance. Pick rate is measured as items or orders picked per hour. Industry sources report an average pick rate of ~70 items/hour, with efficient operations often exceeding 100 picks/hour. (The exact number depends on order complexity and layout.) Many warehouses maintain ≥99% accuracy.

Equivalently, typical picking error rates are around 1–3%. Even a few mis-picks can be costly: one study found a single picking error can cut an order’s profit by ~13%. As such, reducing picking errors is crucial for customer satisfaction and savings.

Order packing parameters

Setup time to start packing a new order: the parameter indicates the time that is required to start the next packing task.  

Total time to select and prepare a shipment box type for an order (seconds): The parameter indicates the time that is required to check the products and select a suitable box type for shipment.

Time to scan an item and put it into the box: The parameter indicates the time that is required to pick an item from the tote, scan the barcode, and put it in the shipment box.

Total time to wrap, print, and stick the shipment label for an order:  The parameter indicates the time required to wrap the box, print a shipment label, and stick the label on the shipment box.

Calculated values for order packing

These values are formulated to estimate the packing process.

• ST: Setup Time to Start Packing a New Order
• TTSB: Total Time to Select and Prepare a Shipment Box Type for an Order
• TTWP: Total Time to Wrap, Print, and Stick Shipment Label for an Order
• TTSI: Time to Scan an Item and Put into the Box
• MIL: #Multi-Item Order Lines
• SIL: #Single-Item Order Lines

Total packing time for single-item orders: This value shows the total time required to pack all the orders in a single-item batch. The result is a function of setup time to start, box selection, product scanning, shipment labeling, and wrapping.

Total Packing Time for Single - Item Order = ST + TTSB + TTWB + (TTSI * SIL)

Total packing time for multi-item orders: This value shows the total time required to pack all the orders in a multi-item batch. The result is a function of setup time to start, box selection, product scanning, shipment labeling, and wrapping.

Total Packing Time for Multi - Item Order = ST + TTSB + TTWB + (TTSI * MIL)

Results for the order picking process

Let's break down what the above numbers mean:

• Number of single-item batch picking jobs: This value shows the number of single-item order batches according to your daily shipment orders. We used the single-item order percentage and the single-item batch size to calculate the number of batches.
• Number of multi-item batch picking jobs: Number of multi-item order batches according to your daily shipment orders. We used the multi-item order percentage( 100- Single Item Order percentage)  and the multi-item batch size to calculate the number of batches.
• Total time to execute single-item batch picking jobs: The total hours to complete all the single-item batch orders.
• Total time to execute multi-item batch picking jobs: The total hours to complete all the multi-item batch orders.
• Number of pickers: Estimated number of pickers to pick the given shipment orders. The formula uses daily shift hours to estimate the total pickers. Ensure that you do not round the numbers to give yourself sufficient buffer room for productivity in the warehouse.

Results for the order packing process

Here is a summary of the estimated results for the packing process outlined above

• Total time to pack all single-item orders: Total hours to complete all the single-item packing tasks.
• Total time to pack all multi-item orders: The total hours to complete all the multi-item packing tasks.
• Number of packers: Estimated number of packers to pack the given shipment orders. The formula uses daily shift hours to estimate the total packers. I did not round the numbers to give enough room for productivity in the warehouse. Usually, we round up the numbers.

Labor cost calculation and planning

Finally, you can add the estimated number of packers and the estimated number of pickers to find the total number of employees needed for picking and packing all orders processed in a warehouse.

Final thoughts on warehouse labor planning

Labor planning is detailed work, but it provides a crucial blueprint for your warehouse operations. By estimating picks, packs, and staffing needs, you can avoid surprises like stockouts or understaffing. If you’d rather not crunch all the numbers manually, we have a spreadsheet ready for you for your convenience.