Aligning Order Picking Methods, Incentive Systems, and Regulatory Focus to Increase Performance

39 Pages Posted: 13 Jul 2015

See all articles by Jelle de Vries

Jelle de Vries

Erasmus Research Institute of Management (ERIM)

M. B. M. de Koster

Erasmus University Rotterdam (EUR) - Department of Technology and Operations Management

Daan Stam

Erasmus Research Institute of Management (ERIM)

Date Written: July 13, 2015

Abstract

A unique controlled field experiment investigates order picking performance (in terms of productivity and quality). We examined three manual picker-to-parts order picking methods (parallel, zone, and dynamic zone picking) under two different incentive systems (competition- based versus cooperation-based) for pickers with different regulatory foci (prevention-focus versus promotion-focus). The study was carried out in a warehouse erected especially for the purposes of order picking research. Our results show that when using a parallel picking method a competition- based incentive system increases productivity and quality compared to a cooperation-based incentive system, and that when using a zone picking method it is more productive to use a cooperation- based incentive system. This pattern of results was especially pronounced for pickers with a dominant promotion focus. Dominantly prevention focused pickers, however, were more productive with a cooperation-based incentive system, irrespective of the picking method. Additionally, a cooperation-based incentive system delivered a low quality performance in zone picking, but a high quality performance in dynamic zone picking. The analyses demonstrate that by aligning order picking methods, incentive systems and regulatory focus, warehouses can improve productivity and quality, and reduce wage costs by up to 20%.

Keywords: behavioral operations, warehousing, order picking, incentives

Suggested Citation

de Vries, Jelle and de Koster, M.B.M. René and Stam, Daan, Aligning Order Picking Methods, Incentive Systems, and Regulatory Focus to Increase Performance (July 13, 2015). ERIM Report Series Reference No. ERS-2015-009-LIS. Available at SSRN: https://ssrn.com/abstract=2630169 or http://dx.doi.org/10.2139/ssrn.2630169

Jelle De Vries (Contact Author)

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

M.B.M. René De Koster

Erasmus University Rotterdam (EUR) - Department of Technology and Operations Management ( email )

RSM Erasmus University
PO Box 1738
3000 DR Rotterdam
Netherlands
+31 10 408 1719 (Phone)
+31 10 408 9014 (Fax)

HOME PAGE: http://www.rsm.nl/rdekoster

Daan Stam

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

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