5 Ways to Improve Order Accuracy & Avoid Inaccuracy

In an era where customer expectations are constantly evolving, the importance of order accuracy in the warehousing sector cannot be overstated. The rapidity with which products are dispatched and the precision of those orders stand at the crossroads of operational costs and customer contentment. From understanding the pitfalls that lead to inaccuracies, to mastering the metrics that measure order precision, and harnessing cutting-edge solutions like AutoStore, ensuring impeccable order accuracy is paramount.

In this article, we will delve into how heightening this accuracy not only trims operational costs but also magnifies customer satisfaction, setting the stage for a more efficient and reputable warehousing operation.

Order accuracy vs. order picking accuracy

In the intricate world of warehousing and distribution, the terminologies surrounding order fulfillment can sometimes be easily conflated. Two such terms are order accuracy and order picking accuracy. Though they interlink and often depend on each other, they are distinct concepts with their own implications for the entire supply chain, and before delving into ways to improve order accuracy, let’s get this distinction right to avoid any confusion:

Defining order accuracy

This term is holistic, encompassing 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 inputted 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 can impact whether an order is executed flawlessly.

Defining order picking accuracy

A more specific component within the order fulfillment process is order picking. This is the phase where items are actually retrieved from their storage locations to fulfill an order. Accuracy here is all about ensuring that the right item, in the right quantity, is selected. Mistakes at this stage can have a cascade effect, leading to returns, refunds, and, more broadly, customer dissatisfaction. While it's just one part of the larger order accuracy picture, getting the picking right is a pivotal step in ensuring the entire process runs smoothly.

Read more: A guide to order picking and how to improve it

In essence, while order accuracy provides a broad overview of the entire order fulfillment process, order picking accuracy hones in on the critical step of item selection. Both are crucial in their own right, but understanding the distinction is crucial for your businesses to address areas of improvement more effectively.

Increase order accuracy = reduce costs and improve customer satisfaction

With a clear distinction established between order picking accuracy and order accuracy, recognizing the advantages of enhancing order accuracy can further illuminate the significance of investing in its improvement.

Here's how an increased order accuracy directly impacts the bottom line and bolsters customer satisfaction:

1. Significant cost savings

Reduction in Returns and Re-shipments: Order inaccuracies often result in returns or the need to re-ship the correct items. By reducing these instances, businesses can avoid the associated logistical and material costs.

Less Wastage: For businesses dealing in perishable goods, ensuring items with the shortest shelf life are picked correctly means reduced wastage. This directly contributes to better profit margins.
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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.
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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, enhancing their overall experience.

Trust and Reliability: Delivering the right product consistently establishes a brand as trustworthy and reliable. This not only retains existing customers but can also serve as a powerful word-of-mouth marketing tool.
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4. Competitive edge

Brand Reputation: In today's digital age, negative reviews spread rapidly. By ensuring order accuracy, businesses can avoid negative feedback, protecting and enhancing 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.
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5. Intangible benefits

Employee Morale: A system that reduces errors can also reduce the stress and frustration associated with correcting them. This can lead to a more positive work environment, increasing employee morale and reducing turnover.

Strategic Decision Making: With a high order accuracy rate, businesses can trust their data more. This facilitates better strategic decisions, be it in marketing, sales, or operations.

In essence, the benefits of improving order accuracy extend far beyond operational efficiency. It translates into tangible cost savings, positions a brand as reliable and trustworthy in the market, and creates an ecosystem where both employees nd customers are more satisfied. The ripple effect of these benefits can often lead to exponential growth and success in the long run.

What causes order inaccuracy

Understanding what causes order inaccuracy is crucial in understanding how to avoid them. Errors in order picking can erode profit margins, lead to returns, increase customer service interactions, and result in lost sales. 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 erroneously 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. The implications can range from customer dissatisfaction to loss in sales.
• 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 — like scanning items or thorough quality checks — can yield better results, it might come at the cost of speed, impacting the overall efficiency.

By gaining a comprehensive grasp 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.

Calculating and interpreting order accuracy

Measuring the order accuracy rate is pivotal to understanding the effectiveness and efficiency of your warehouse operations. This metric not only reflects the current state of your order fulfillment but also provides actionable insights for performance enhancement.

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%

To elucidate with an example: if you process 1000 orders and find that 10 of these were inaccurate, then your order accuracy rate would stand at an impressive 99%. Such a high rate indicates strong 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 affecting it, your business can set clear, data-informed goals.

5 ways to improve order accuracy

So, how do you lay the groundwork to improve overall order accuracy?

Ensuring heightened order accuracy is not just about implementing advanced systems but also about laying a robust foundational framework. 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 products available. 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: Introducing 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.
• Integrate Advanced Solutions: Embracing technologies like AutoStore’s products and systems can streamline the picking and packing process. With automated solutions, the margin for human error is considerably reduced.

3. Automation as a vital component

• 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 supply chain throughput. In addition, fast-moving items can be placed for easy access to further optimise handling times. Automation technologies such as AutoStore work according to the Pareto principle and automatically take care of smart item availability.

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. Read more about setting and tracking KPIs in our article on Warehouse Efficiency and Increasing ROI.

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 where feedback is valued. 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 poised to deliver consistent and accurate order fulfillment, enhancing customer trust and loyalty.

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How AutoStore AS/RS enhances order accuracy

At AutoStore, we've always believed in pushing the boundaries of warehousing and logistics. Through continuous innovation, we've developed a solution that stands at the forefront of order picking advancements. Let’s guide you through the transformative features of AutoStore and how it streamlines and enhances order accuracy:

• Simplified Operator Interaction: AutoStore significantly streamlines the operator's engagement with order fulfillment, removing the complexities often associated with manual processes.
• Quick Training: One of the standout features is its user-friendliness. A new picker can be up to speed and operational at a workstation in just 10-15 minutes.
• Automated Product Delivery: Gone are the days of the operator scouring shelves. With AutoStore, the correct product is brought directly to the operator's workstation, eliminating unnecessary movement and time wastage.
• Organized Bins with Multiple Products: When a bin houses multiple products, AutoStore ensures they're neatly separated with dividers. The picker is then guided to the exact location of the item, often employing a pick-to-light system, enhancing both speed and accuracy.
• Intuitive User Interface: Rather than providing the picker with an overload of  information, AutoStore presents a clean, easy-to-follow interface. It displays a clear image of the product, along with the quantity to be picked, minimizing the chances of errors.
• Efficiency in Complex Picking: Tasks that traditionally require nuanced strategies, such as batch picking, are made straightforward with AutoStore. Regardless of the picking strategy, the picker's task remains consistent. The system's software handles all the intricacies of batching and consolidation.
• Unified Picking and Packing Role: One significant advantage is the possibility of merging the roles of picking and packing. This ensures that one individual oversees the order's accuracy from start to finish, fostering accountability.
• Significant Cost Savings: The financial benefits are hard to ignore. For an e-commerce enterprise dispatching 2,000 orders daily, a mere 0.5% uptick in pick accuracy through AutoStore translates to a staggering annual saving of approximately $220,000.
• Scalability during peak seasons: AutoStore allows for easier scalability during peaks, unexpected market changes or regular business growth, making sure the productivity and efficiency stays high and the accuracy of picking stands the same.

In today's fiercely competitive landscape, optimizing order accuracy is not a luxury; it's a necessity. As technology continues to evolve, leveraging the AutoStore system can ensure that your operations remain both efficient and accurate, safeguarding your bottom line and elevating customer satisfaction.

FAQ

How do you fix order accuracy?

Fixing order accuracy requires measuring the current accuracy rate, identifying root causes of inaccuracies, introducing quality control measures like double-check systems, utilizing technology like barcode scanners, and continuously training and updating standard operating procedures.

What is an example of order picking accuracy?

An example of order picking accuracy is if out of 1,000 orders, 10 were inaccurately picked, the order picking accuracy rate would be 99%.

How do you measure order accuracy?

Order accuracy is measured using the formula:

Order Accuracy Rate = ((Total orders - Number of Incorrect Orders) / Total Orders) x 100%

What is a good order accuracy?

A good order accuracy rate is typically above 98%. However, aiming for as close to 100% as possible is ideal, as even minor inaccuracies can significantly impact customer satisfaction and operational costs.

What is order entry accuracy?

Order entry accuracy refers to the precision with which order details are entered into a system. This encompasses ensuring the correct items, quantities, shipping details, and customer information are input without errors during the order processing stage.

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