Customers don’t have the patience to deal with inaccurate orders—and in this world of modern convenience, they shouldn’t have to. Order accuracy is essential for both retaining customers, and saving on operational costs.
Let’s take a look at some of the pitfalls that lead to inaccuracies, explore how you can master the metrics that measure order precision, and learn about cutting-edge solutions like Pio that boost order accuracy to 99.9%.
In this article, we’ll delve into how high order accuracy not only maximizes operational savings, but also customer satisfaction, setting the stage for a more successful business.
ORDER ACCURACY VS. ORDER PICKING ACCURACY
The terminologies surrounding order fulfillment can be easily conflated—for instance, order accuracy and order picking accuracy. Though the two terms are related and often depend on each other, they are distinct concepts with their own implications for the entire supply chain. Before delving into ways to improve order accuracy, let’s clarify the difference:
Order accuracy: this is a holistic term that encompasses the complete journey an order takes, from the moment it's placed, to its eventual delivery at the customer's doorstep. It covers everything—from ensuring the correct details are input at the point of sale, to making sure the shipping and billing details are accurate, right through to the item being delivered on time and in good condition to the correct location. It's a comprehensive metric, taking into account all the variables that impact the flawless execution of an order, from beginning to end.
Order picking accuracy: this is a more specific phase, during which items are retrieved from their storage locations for order fulfillment. Accuracy here requires that the right item, in the right quantity, is selected during the picking process. Mistakes at this stage can have a ripple effect, leading to returns, refunds, and customer complaints. While it's just one part of the larger order accuracy picture, getting the picking right is a crucial step in ensuring the entire process runs smoothly.
REDUCE COSTS AND IMPROVE CUSTOMER SATISFACTION
Now, let’s better understand the advantages of high order accuracy, and its positive effects on your business at large. Here's how an increased order accuracy directly impacts the bottom line, and the success of your business:
#1 Significant savings
Reduction in Returns and Re-shipments: Order inaccuracies often result in returns or the need to reship the correct items. By reducing these instances, businesses can avoid the associated logistical and material costs.
Less Waste: For businesses dealing in perishable goods, ensuring items with the shortest shelf life are picked correctly means reduced waste. This directly contributes to better profit margins.
#2 Improved resource utilization
Higher Productivity: When orders are picked accurately the first time, pickers don't have to spend time correcting mistakes, leading to more orders being processed in the same timeframe.
Optimized Stock Levels: An accurate order system ensures that inventory is utilized efficiently. This means fewer overstocks or stockouts, leading to optimal warehouse space utilization and reduced holding costs.
#3 Enhanced customer satisfaction
Faster Deliveries: With improved order accuracy, there are fewer delays in processing and dispatching. This means customers get their orders faster, creating a better experience.
Trust and Reliability: Delivering the right product consistently establishes a brand as trustworthy. This not only retains existing customers but can also serve as a powerful word-of-mouth marketing tool.
#4 Competitive edge
Brand Reputation: In today's digital age, negative reviews spread rapidly. By ensuring order accuracy, businesses can avoid negative feedback, protecting their brand reputation.
Loyalty and Repeat Business: Satisfied customers are more likely to return for repeat purchases. By meeting and exceeding their expectations, businesses can foster a loyal customer base that contributes to stable revenues.
#5 Intangible benefits
Employee Morale: A system that reduces errors can also reduce the stress and frustration associated with correcting them. This fosters a more positive work environment, increasing employee morale and reducing turnover.
Strategic Decision Making: With a high order accuracy rate, businesses can have higher trust in their data. This facilitates better strategic decisions across marketing, sales, or operations.
In essence, the benefits of improving order accuracy extend far beyond operational efficiency. It translates into tangible savings, positions a brand as reliable and trustworthy in the market, and creates an ecosystem where both employees and customers are content. The ripple effect of these benefits can often lead to exponential growth and long-term success.
WHAT CAUSES ORDER INACCURACY?
Understanding what causes order inaccuracy is crucial in understanding how to avoid them. The root causes of these inaccuracies vary, but below are some main reasons:
- Mispicks: Mispicks occur when an item closely resembling the desired product or an entirely different item is wrongly selected from its designated location. This is often due to similar packaging, labels, or products being placed in close proximity.
- Wrong Quantity: Simple human errors, such as misreading a pick ticket, can lead to picking a single item when two were ordered, or vice versa.
- Stock Rotation Issues: In situations where items have varying shelf lives, not rotating stock can result in not picking the item with the shortest shelf life. This oversight is especially problematic for perishable goods and can lead to wastage.
- Information Overload: The plethora of details — a picklist, barcodes, shelf locations, product descriptions — can sometimes overwhelm a picker. When delivered with excessive information, the margin for error inevitably increases.
- Productivity vs. Accuracy Dilemma: Often, there's a tug-of-war between productivity and accuracy. While implementing steps to bolster accuracy can yield better results, it might come at the cost of speed, impacting the overall efficiency.
Armed with a comprehensive understanding of these pitfalls and their underlying causes, your warehouse is better equipped to create proactive measures. Such initiatives not only prevent inaccuracies, but also drive efficient operations and ensure customer satisfaction, fortifying a more resilient and responsive supply chain.
HOW DO I CALCULATE AND INTERPRET ORDER ACCURACY?
To calculate the efficiency of your warehouse operations, you must calculate your order accuracy rate. This metric not only reflects the current state of your order fulfillment, but also provides actionable insights for improving performance.
The formula to calculate the order accuracy rate is designed for simplicity and clarity:
Order Accuracy Rate = (1 - (Number of Incorrect Orders / Total Orders)) x 100%
Take this example: if you process 1000 orders and find that 10 of these were inaccurate, then your order accuracy rate would stand at 99%. This rate indicates above average operations, but even minor discrepancies can have tangible impacts on customer satisfaction and operational costs.
By continually monitoring the order accuracy rate and understanding the factors that affect it, your business can set clear, data-informed goals.
5 WAYS TO IMPROVE ORDER ACCURACY
A solid foundation ensures that as your operations scale, accuracy remains a priority and is consistently achieved. Let's delve deeper into the fundamental steps that pave the way for achieving exceptional order accuracy:
#1 Inventory management overhaul
- Consistent Audits: Regular audits of your inventory ensure that there is an accurate record of available products. This not only helps in maintaining the correct stock levels, but also prevents order inaccuracies arising from stock discrepancies.
- Real-time Tracking: Adopting systems that offer real-time tracking of inventory movement can dramatically reduce errors. Instant updates ensure that stock levels are always current, reducing the chance of overselling or underselling.
#2 Optimize picking and packing procedures
- Systematic Approaches: Structured systems, such as the two-bin system, can enhance the efficiency of the picking process. It ensures a continuous supply of items, reducing the downtime between picks.
- Advanced Solutions: Technology such as automated warehouse systems can streamline the picking and packing process. With automated solutions, the margin for human error is considerably reduced.
#3 Automation
- Minimizing Human Error: Automation tools, such as robotic pickers or conveyor systems, are designed to perform repetitive tasks flawlessly. This results in a significant reduction in errors that are often attributed to human oversight or fatigue.
- Enhancing Efficiency: Automated systems can also improve the speed of operations. When tasks are performed faster without compromising on accuracy, it directly benefits the overall throughput. In addition, fast-moving items can be placed for easy access to further optimize handling times.
#4 KPI monitoring for continuous enhancement
- Data-Driven Decision Making: Monitoring key performance indicators (KPIs) like order picking accuracy, average shipping time, and inventory turnover gives businesses a clear view of where improvements are needed.
- Setting Clear Benchmarks: With KPIs, businesses can set achievable benchmarks for their teams. It also provides a roadmap for operational changes that might be needed to hit those targets.
#5 Comprehensive training and development
- Regular Training Sessions: To maintain and enhance order accuracy, it's crucial to regularly train staff. New employees should be oriented with best practices, while existing employees can benefit from refresher courses.
- Feedback Mechanism: Encourage a culture of giving and receiving feedback. Analyzing errors and learning from them can be a powerful tool. When employees understand the root causes of inaccuracies, they are better equipped to avoid them in the future.
In sum, laying the groundwork for elevated order accuracy is a multi-faceted approach. It involves a blend of technology, systematic procedures, continuous monitoring, and human development. By prioritizing these foundational steps, businesses can be better positioned to deliver consistent and accurate order fulfillment, enhancing customer trust and loyalty.
HOW DOES PIO’S AUTOMATED WAREHOUSE SYSTEM ENHANCE ORDER ACCURACY?
Using AutoStore’s technology trusted by industry giants for 25+ years, we’ve always believed in pushing the boundaries of warehousing and logistics. Through continuous innovation, we've developed a solution that leads in order picking advancements. Here are some of Pio’s game-changing features, and how they enable 99.9% order accuracy:
- Quick Training: Our system and software is super intuitive. A new picker can be trained and operational at a workstation in just 10-15 minutes.
- Automated Product Delivery: Gone are the days of the workers scouring shelves. With Pio, the correct product is brought directly to the picker’s workstation, eliminating unnecessary movement and speeding up processes.
- Organized Bins: When a bin houses multiple products, Pio ensures they're neatly separated with dividers. The picker is guided to the exact location of the item in the bin, via our app.
- Intuitive App: Rather than providing the picker with an overload of information, our app presents a clean, easy-to-follow user experience. It displays a clear image of the product, along with the quantity to be picked, minimizing the chance of errors.
- Unified Picking and Packing: With Pio, picking and packing streamline into one efficient process. This ensures that one individual oversees the order's accuracy from start to finish, for clear ownership and accountability.
- Significant Savings: The financial benefits are hard to ignore. You can calculate how much your business can save via our savings calculator.
- Scalability during peak seasons: Pio’s scalability helps your business weather seasonal peaks, unexpected market changes, or regular business growth, making sure the productivity and efficiency stays high and the accuracy of picking stands the same. Read more about how Pio eliminates holiday season stress and backlogs.
In a fiercely competitive ecommerce landscape, high order accuracy is table stakes. As technology continuously evolves, leveraging the Pio system can ensure that your operations remain both efficient and accurate, safeguarding your bottom line and helping you nurture a loyal, satisfied customer base that will support your business for years to come.