What is Pack Hierarchy?
Pack hierarchy refers to the structured relationship between different levels of packaging units for a product.
Example:
- A single can of coca-cola can be considered an L0 pack (unit).
- A six pack set of coca-cola in an inner pack can be considered an L1 pack level. (1 L1 = 6 Units)
- A carton of coca-cola containing 10 L1s can be considered an L2 pack level.
(1 L2 = 10 L1 => 1 L2 = 10 x 6 Units => 1 L2 = 60 units)
- 5 cartons of coca-cola on a pallet can be considered an L3 pack level. (1 L3 = 5 L2)
(1 L3 = 5 x 60 units => 300 Units)
| Pack Level | Pack Type | Description | Notes/Images |
| L0 | Unit/Eaches | The lowest level of the item hierarchy intended or labeled for individual resale. E.g. an individual can of cat food | |
| L1 | Pack/Inner Pack | A logistical unit or a consumer unit between a case and each. This level can contain a single SKU (GTIN) or multiple SKUs (GTINs). E.g: a pack consisting of 6 of the same Tuna Fish Cat Food with a unique barcode that represents the 6-pack. The cans that are the components of the bundle pack have the SKU/GTIN barcode that in turn represents a single can (the Each level or Level 0 in the pack hierarchy) | These pack types are meant for cartons from the manufacturing - mostly applicable to FMCG Brands E.g. a pack of 6 cat food cans, NOT the outer pack that is used for transportation |
| L2 | Carton | A standard trade item shipping unit. E.g. Cat Food cans packed in a standard 24-pack configuration within a cardboard case. | |
| L3 | Pallet | A unit load that contains a single or multiple SKUs (or GTINs) that's not display ready. Might include a pallet box. |
Advantages of Pack Hierarchy
1. Reduced Fulfilment Cost:
When items are inbounded at different pack levels (e.g., L1/Inner Pack = 12 units, L2 = 6 L1s = 72 units), the WMS automatically utilizes higher pack types for outbound fulfilment, leading to significant cost savings.
Example Scenario (with estimated costs and pack sizes):
During inbound, Coca-Cola cans are recorded as:
| Pack Level | Description | Quantity contained | Classified as |
|---|---|---|---|
| L2 | Carton | 10 cases (240 cans) | Large |
| L1 | Case-packed | 24 cans | Medium |
| L0 | Individual unit | 1 can | Small |
For an outbound order of 1000 cans, the WMS calculates the optimal picking approach:
Pick 4 Cartons (L2 / Large) → 4 x 240 cans = 960 cans
Pick 1 additional case (L1 / Medium) → 24 cans
Pick 16 loose units (L0 / Small) → 16 cans
➡ Total picked: 960 + 24 + 16 = 1000 cans
Cost comparison (example picking fees):
| Picking Unit | Size Class | Fee per pick | Quantity picked | Total Cost (USD) |
|---|---|---|---|---|
| L2/Carton | Large | $3.00 | 4 | $12.00 |
| L1/Case | Medium | $0.50 | 1 | $0.50 |
| L0/Unit | Small | $0.05 | 16 | $0.80 |
| Total | $13.30 |
? Without pack hierarchy:
If the warehouse had to pick 1000 individual cans:
Unit picking fee: 1000 x $0.05 = $50.00
✅ Cost savings with pack hierarchy:
$50.00 (no pack info) - $13.30 (using pack info) = $36.70 saved
~73% reduction in picking cost
2. Faster Order Processing (B2B/B2C) - Since picking occurs at different pack levels, the fulfilment turnaround time is significantly reduced for both B2B and B2C orders, as demonstrated in the Coca-Cola scenario above.
3. Increases Picking Accuracy- Picking at defined pack levels (pallets, cases, units) minimises manual handling, thereby reducing the chances of fulfilment errors and ensuring higher order accuracy.
4. Increases Inventory Accuracy - Recording and picking items at defined pack levels (L2, L1, L0) improves inventory accuracy
How to Enable Pack Hierarchy
- To enable pack hierarchy, please reach out to your account manager. This feature is currently activated on a case-by-case basis following an internal review.
Once approved, we will enable the feature from the backend. After activation, brands can create different pack types by navigating to Product → Inventory Products → [Click on an inventory SKU].
FAQs:
1. What is the child and unit quantity when defining a pack type?
- The child quantity represents the quantity of the immediate lower pack type. For example, when defining L1, the child quantity will be 1 unit. When defining L2, it will be the number of L1 packs contained within L2, and so on for higher levels.
The unit quantity is the total number of items in a pack type, expressed in units.
2. Can higher pack levels be used for orders containing individual units?
- Yes, higher pack types can be used to fulfil orders for individual units. The system will allocate from available higher pack levels (e.g. cases or pallets) based on inventory availability and picking optimisation.
3. How will the fulfillment billing work?
- Fulfilment billing is calculated based on the CBM or size class of the items picked rather than the number of units. For example, in the Coca-Cola scenario, an order of 1000 cans was fulfilled by picking 4 pallets, 1 case, and 16 units, and billing would be based on the CBM or size class of these pack levels instead of charging for each individual unit picked.
4. How many Pack Types are currently supported on the OMS?
- Currently, we support up to L3 pack type, starting from L0 (unit level).
5. What is the stock quantity that will be synced to sales channels?
- The sellable stock quantity synced to sales channels will be the total sellable inventory converted to the unit level. For example, if the warehouse has 2 cartons of Coca-Cola, 2 inner packs, and 3 individual units, the synced sellable quantity will be the sum of all these pack types at the unit level, representing the total sellable inventory available.
6. Which WMS supports pack hierarchy?
- Currently, pack hierarchy is only supported in warehouses using Logiwa WMS.
7. Can we edit a pack type once it has been created?
- No, it is currently not possible to edit a pack type after creation. However, you can delete pack types, but only starting from the highest pack level downwards.