The first step in optimizing order fulfillment is "understanding the velocity of all the SKUs you're going to be picking," says Baker. They should be ranked in an "A-D" sequence, with appropriate measures for each.

It's essential to classify inventory so that distribution-center designers can determine the best configuration of shelving and equipment for the items in question. Among the characteristics to be identified is the method of picking - whether by pallet, case or item. In the process, DCs can be arranged to minimize fatigue and unnecessary travel within the facility by pickers.

Baker says companies are being forced to become more sophisticated in their inventory-classification methods. They are driven by the growth of electronic commerce and a need for the constant switching out of seasonal merchandise.

The biggest oversight in order fulfillment today is accuracy, Baker says. "Most organizations are not at 100 percent." On the contrary, a typical company might waste $6,000 a day shipping the wrong items or parts.

Integrating discrete business systems is another big challenge for DC managers. Order-processing software must meld with the enterprise resource planning system and material-handling application, which can automatically receive a pick list in a smoothly running operation.

Pick-to-light is among the major enabling technologies gaining popularity in modern-day DCs. Baker cautions, however, against becoming "dazzled" by new systems. Operators must ensure that they are a good fit for a given facility, based on its volume and layout.

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Keywords: supply chain, supply chain management, WMS, warehouse management systems, inventory management, inventory control, logistics systems, logistics management, retail supply chain