The importance of order accuracy cannot be underestimated. After all, it is fundamental to the relationship between an e-commerce business and its customers. The first time they shop with a new store, customers take a leap of faith and trust that the store will deliver the goods.
It is up to the store to make good on its promises and make sure it gets the order right. This begins with a high order picking accuracy rate. A store can do everything else right, but if the order is picked incorrectly, the whole transaction can fall apart in the warehouse and cost you your customer’s trust. SFI offers a one-stop solution for order fulfillment, learn more about how it works.
Do you know that the order picking rate at the average warehouse is 100-120 per hour? On manual picks, incorrect picks can run as high as 3%. That may not sound like much, but depending on the value of each incorrect pick, it can become very costly for your business – especially if your business’s order-picking errors are running higher than 3%.
That’s why it’s so important to improve accuracy by implementing the right processes, and that’s why we’re going to take a look at how you can improve your order accuracy.
The nuts and bolts of order accuracy
E-commerce orders consist of the fulfillment and shipping of purchases to your customers. Order accuracy is the number or percentage of orders that are correctly fulfilled. Incorrect order picks include items that are picked incorrectly, shipped to the wrong address, or shipped in incorrect quantities.
Remember that there is a fundamental difference between order picking accuracy and order accuracy. They’re connected but different. Order picking accuracy is about tracking correct picks and inconsistencies at the picking stage. So what is order accuracy? Order accuracy takes a wider view as it measures performance across the entire process of fulfillment and delivery. This includes picking, packing, labeling, shipping, and delivery. Check out our blog post for more detailed information on e-commerce fulfillment.
The picking may have been done correctly, but a mistake in shipping still counts as an error that will affect your order picking accuracy.
Establishing order-picking accuracy KPIs is a great way to track your order accuracy rate, but there are other ways to improve your order-picking accuracy.
Calculating your order accuracy rate
First, let’s look at how you calculate your order accuracy rate. You should keep your order accuracy in mind at all times so you can take any necessary steps to improve it. Calculating your order accuracy rate may sound tricky, but luckily there is a handy way to do it.
It’s very easy. Simply take the number of successful orders and divide it by the total number of orders. Now, just take that number and multiply it by 100. Here’s the equation in a simple form:
(Number of successful orders / total orders) x 100 = your order accuracy rate.
For example, if yours is an average business with 97 accurate orders for every 100, then your order accuracy rate would look like this:
97 / 100 = 0.97
0.97 x 100 = 97%
In this example, you would have a 97% accuracy rate.
Any business would love to have a 100% accuracy rate, but that is not always possible. The best you can do is try to secure an order accuracy rate as close to 100% as possible.
Remember that the average is 97%, so if you achieve anything over this rate you’re doing better than your peers. However, if you are consistently hitting 95% or less, then you need to look at how you can improve your order accuracy.
How To Improve Order Accuracy
There are many things you can try, but here we’ll consider the top 4 ways to improve accuracy.
1. Set goals
You should be strict with yourself when it comes to keeping an eye on your order accuracy rate. If you don’t keep your order accuracy rate and your order accuracy KPIs in mind it can be easy to lose sight of them. That’s why it’s a good idea to consider setting firm but realistic goals to increase accuracy.
The way to do this is to start by discovering your current order accuracy rate using the method described above. Once you have this, set your sights on a realistic goal. By how much would you like to increase your order accuracy? Three percent? Five percent? What time frame do you have in mind?
Remember to keep things realistic. It may be tempting to try to push your employees to achieve a 3% increase in accuracy within a week, but is it realistic? Also, even if they managed it, would they be able to maintain the improvement long-term? Might it be more realistic to coach your employees into increasing accuracy by 1% over two weeks?
Whether you work solo or have a team, it is important to have clear goals and a realistic time frame in which to achieve them. If you work with a team, decide how to make the most of each member’s talents and how to effectively communicate your business’s goals.
2. Take your inventory management to the next level
Improve your order-picking accuracy by improving your inventory management. An ill-disciplined stock room can lead to problems with order picking, such as not having the inventory you thought you had.
High-quality inventory management tools can make it easier to keep track of your stock and help you to anticipate how well particular lines may sell in the future. You can use these tools to make your processes more efficient. For example, by setting up automated reorders.
3. Improve your processes
You have probably already noticed that most mistakes happen during picking and packing. This means you need to pay extra attention to distribution centers and consider how their processes can be improved.
The best way to do this is to ask for feedback. Go to your employees and find out what they really think. What are their ideas for improving operations? Can they suggest how to reduce mistakes?
However, you can also cast a critical eye over how your fulfillment operations work. Pretend you’re a visitor, a stranger to the business. How can you improve things?
- Could your barcodes be printed more clearly?
- Do your picking lists have enough information?
- Does everyone working for you know how your inventory routes work?
4. Warehouse Management System (WMS)
Introducing an effective WMS will help you to quickly improve order-picking accuracy. It should instantly help by shortening the process of picking and shipping orders. For a deeper dive into warehouse management systems, see our blog post! Your team will be able to pick orders with greater speed and accuracy. A WMS should also make it easier to check orders and avoid fulfillment errors.
A warehouse management system should give you up-to-the-minute insights into your stock levels, productivity, and warehouse processes. Not only that, but it should also help you to pinpoint potential areas of weakness so you can concentrate your efforts where they are needed most to make crucial improvements. SFI offers a reliable fulfillment solution, find out more about it.