I find that I do both; first I split, then I lump. This shows up most when I do laundry; first I "split" the clothes into many, very specific piles (denim, towels, etc.) Then, after I do the piles that have enough to fill the washer by themselves, I "lump" the smaller loads, putting the more similar batches together, eventually ending up with "dark colors" and "light colors".