Optimizing Store Fulfillment: Fast‑Pick Warehouses vs Hanging Chains

The O2O “home‑to‑door” market has expanded rapidly, especially after the pandemic, creating strong demand for efficient store fulfillment.

Suning Retail Technology Research Institute interviewed more than ten senior leaders from major O2O platforms, covering business models, order flow, product supply chain, store and delivery fulfillment.

Store Fulfillment Models

Two main models are discussed: the fast‑pick warehouse (快拣仓) and the hanging‑chain system (悬挂链). The fast‑pick warehouse is suitable when targeting a younger demographic with a limited SKU range and high gross margin, while the hanging‑chain expands SKU coverage.

Fast‑pick warehouses typically handle about 500 SKUs, achieving 70% of revenue; adding hanging‑chain raises coverage to around 3,000 SKUs, matching repeat‑purchase data (≈600 SKUs weekly, ≈1,800 monthly).

Operational capacity: fast‑pick warehouse can manage up to 500 SKUs, whereas fast‑pick plus hanging‑chain can scale to 3,000 SKUs. The hanging‑chain bottleneck is around 8,000 SKUs.

Process Flow

After an order is received, it is assigned either to a fast‑pick task or a store task. Picking is organized by batch numbers, which are later consolidated into orders for delivery by riders.

Design Recommendations for Fast‑Pick Warehouse

Location: Allocate ~300 m² in the back‑of‑store, close to roads and riders, to minimize travel time.

Zoning: Separate areas for fresh (cold) and ambient goods, each staffed by dedicated pickers.

SKU Selection: Focus on the top 500 fast‑moving items, place them near pickers, and prefer pre‑packaged goods.

Inventory: Use a virtual inventory of 3,000 SKUs, split 50 % for online and 50 % for offline use.

Staffing: Start with part‑time store staff for low order volumes (≈200 orders/day) and transition to dedicated pickers as volume grows.

IT System Modules for Fast‑Pick Warehouse

Management module for enabling/disabling warehouses, tracking area, SKU count per store.

Location design module for creating and editing picking zones and location codes.

SKU recommendation and export module.

Replenishment dashboard showing real‑time task status and completed orders.

Product management module with fields such as item code, category, stock, forecasted turnover, etc.

Replenishment task query module (by task ID, type, time, assignee, etc.).

Inventory change query module (store, time, item code, document number).

Efficiency report module (matched orders, wave count, out‑of‑stock incidents, SKU count).

KPI parameter management (timed replenishment thresholds, emergency limits, stock‑level triggers).

Hanging‑Chain System

The hanging‑chain solution, used by major supermarkets such as RT‑Mart and 7‑Fresh, consists of hardware (track, belts, lifts, switches, control boxes) accounting for ~90 % of cost, with software only ~10 %.

Initial investment is roughly ¥2–3 million. Service requirements include on‑site technical support within hours and regular inspections.

KPI focuses on time: batch generation ≤15 min, picking per zone ≤3 min, consolidation ≤9 min, packing ≤3 min, and delivery ≤30 min.

Capacity limit is about 8,000 orders; beyond that the system struggles.

Warehouse Control System (WCS)

Key WCS functions include carrier input, log query, storage status, real‑time monitoring, exception handling, and gate status. Visual indicators (green, yellow, red) signal idle, occupied/timeout, and ready‑for‑delivery states.

Overall system monitoring diagrams illustrate the integration of fast‑pick and hanging‑chain operations within the supermarket’s digital fulfillment architecture.