Cracking the Case: Overcoming the Complexities of Mixed-SKU Pallet Building

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This article is part of our SME Corner, offering insights from our subject matter experts to guide you on your warehouse automation journey.

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Retailers today want exactly what they need, exactly where they need it. That means suppliers are being asked to ship store-specific pallets—carefully packed with the right mix of products for each individual location. It’s all about helping stores get items onto shelves faster and with less backroom hassle.

But for warehouse teams, that kind of precision adds a whole new layer of complexity. Building mixed SKU pallets for multiple stores isn’t just time-consuming—it’s physically challenging as well, even in facilities that already have some automation in place. Case picking for these mixed pallets often turns into a manual grind that slows everything down and opens the door for mistakes. That’s because most warehouse systems just aren’t built for the kind of flexibility and precision these customized pallets demand.

The result? A gap between what stores are asking for and what warehouses can deliver efficiently. But that gap doesn’t have to stay open. Smarter, more agile automation solutions are stepping in—and they’re changing the game for businesses that want to stay ahead.

Mixed-SKU pallets offer big advantages, but they also come with significant challenges. Here’s what makes custom pallet building difficult today.

• High Variability in Demand: Frequent changes to pallet specs due to store promotions, planograms, or delivery timing adds complexity and require constant process adjustments
• Complex Truck Loading Logistics: Without careful planning, unloading unique pallets becomes inefficient with longer handling time and delivery errors
• Risk of Product Damage: Mixing heavy and fragile items requires precise stacking precise stacking, which—if not done correctly—can lead to product damage or even collapse
• Inventory Slotting Disruptions: Shifts in SKU velocity can misalign storage layout, leading to slower picking and wasted space

Mixed-SKU pallets present a strategic opportunity to enhance supply chain agility and better serve customers’ needs in the following ways: 

Delivering Shelf-Ready Pallets

By pre-building pallets that are aligned with a store’s specific layout, retailers can restock shelves faster and with fewer touches. Instead of employees having to break down bulk shipments and sort products in the backroom, everything arrives ready to go—organized by aisle, category, or shelf location. This reduces in-store labor requirements and gets inventory on shelves faster.

Improving Order Consolidation
Mixed-SKU pallet building allows businesses to consolidate multiple products into a single shipment, which supports more frequent, smaller orders without sacrificing delivery efficiency. Instead of waiting to fill full pallets of a single SKU, warehouses can combine several SKUs tailored to the needs of individual stores or delivery routes.

This flexibility is especially valuable in today’s retail environment, where demand can shift quickly and shelf space is limited. It enables retailers to maintain leaner inventories and respond to local demand patterns with greater flexibility. 

Saving Space and Waste

While the size of a pallet is fixed, building mixed-SKU pallets allows for smarter use of space across an entire shipment. Rather than shipping multiple half-filled or underutilized single-SKU pallets, combining SKUs lets businesses fill each pallet to meet store-specific needs without overpacking any one product. This means fewer total pallets are required to fulfill an order, improving truck and trailer utilization and reducing the number of trips needed.

Most case-picking systems in use today were built for a different world—one where orders were simpler and mostly single-SKU. To make them work for today’s more complex demands, companies often piece together a mix of systems like AS/RS, buffering zones, sortation, sequencing equipment, and long runs of conveyors. The end result? A patchwork setup of multiple machines that still leans heavily on manual labor to keep things moving.

• Throughput Bottlenecks: If one system slows down, the entire operation is affected
• Sprawling Footprint: Multiple systems take up valuable floor space
• Reduced Accuracy: More handoffs increase the risk of errors
• Limited Flexibility: Scaling or adapting interdependent systems can be costly and disruptive
• Complex Integration: Connecting all the systems often requires custom code, middleware, and constant upkeep

Watch how the Skypod system manages the complexity of order preparation for mixed-SKU pallets

There are a number of ways to address the challenge of custom pallet building, but success requires more than piecemeal fixes — it calls for a system designed to handle complexity with speed, precision, and flexibility. That’s where the Exotec Skypod system stands apart.

Unlike traditional automation that struggles to adapt to varied and unpredictable order profiles, the Skypod system was built with flexibility at its core. It combines several key processes into a single high-performance AS/RS — eliminating the need for multiple subsystems with complex conveyance tying them together. Within a single Skypod system, operations can:

• Pick cases and eaches dynamically based on real-time demand for true omnichannel fulfillment
• Buffer, sort, and sequence inventory to match specific pallet or order configurations

This unified approach enables a single AS/RS to sequence orders precisely for pallet construction, following predefined parameters to ensure each pallet is built in the correct order, with the right items in the right positions. No extra buffering, no put walls, no additional sortation equipment.

The result? Streamlined operations, reduced reliance on complex equipment, and increased agility to handle dynamic demand.

Below is a breakdown of how the Skypod system is able to handle omnichannel fulfillment including picking, packing, buffering, sorting, and sequencing within a single system.

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Mixed-SKU pallet building doesn’t have to be a bottleneck. With the Skypod system, it becomes a competitive advantage—enabling you to move smarter, respond faster, and deliver precisely what your customers need.

Want to see the Skypod system in action?