5 Ways to Improve the Order Accuracy of Your Operation
If you want your order fulfillment operation to be truly successful, then there are few KPIs more important or crucial than order accuracy, which measures the cumulative accuracy of all fulfilled orders that leave your facility, and the reason is clear.
When your orders are inaccurate, your operation is forced to waste time, resources, and capital correcting the order for your customer. Beyond this, low order accuracy can damage the reputation of your order fulfillment operation and lower customer trust, ultimately making it more difficult for you to both retain your existing customers and attract new customers. Customers want to know that when they order something, they’ll get what they need. If they can’t trust you to meet that basic need, then they’ll go elsewhere.
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In short, if your company is in the business of fulfilling packages, then you need to get good at it. This means making sure that your order accuracy (measured as Perfect Order Percentage) hits the mark in terms of customer expectations.
If you’re looking for ways to improve the order accuracy of your operation, this list of actionable tips will help you do just that, boosting your customers’ satisfaction with your business.
1. Make sure you’re tracking your order accuracy rates.
The first step in improving your order accuracy is to begin tracking the metric if you aren’t already doing so. After all, you can’t improve something if you don’t know where you currently stand.
If you have not been tracking your order accuracy, you should do so for at least a few months to get a sense of where your operation currently stands so that you can understand whether or not improving order accuracy should be a priority.
Generally speaking, the benchmarks below can be used to determine whether or not you should prioritize improving order accuracy or if there may be another area that you can possibly squeeze a larger return out of.
If your order accuracy is:
- Less than 85.7%: There is major room for improvement and you should likely prioritize improving accuracy rates.
- 85.7% to 95%: Your operation is at a competitive disadvantage and stands to gain much from improving rates.
- Between 95% and 98%: Your accuracy rates are typical compared to the competition. Improvements can help your operation stand out but will yield less in terms of direct benefits.
- Higher than 98%: Your order accuracy rates are best in class and don’t really warrant a major devotion of resources to improve.
Still unsure if you should devote resources to improving order accuracy? Keep in mind that a 3% increase in perfect order percentage (of which order accuracy is a component) yields on average a 1% increase in profit.
2. Incentivize employees to improve rates.
If after measuring your accuracy rates you discover that there is some major room for improvement, consider incentivizing employees to improve their accuracy rates. An operation can do so in a number of ways.
For example, you can post individual or group error rates so that poorly-performing groups or individuals know how they stack up against their coworkers and feel a pressure to improve. Nobody wants to be at the bottom of the list, so this alone can be incentive enough for many employees.
Alternatively, some operations find that directly offering bonuses to employees who hit improvement targets. These bonuses could be financial in nature—say, an actual check—or something like a company event or earned vacation days.
3. Consider pick-to-light or pick-to-voice systems.
Many order fulfillment operations are still using some version of paper-and-pencil lists for order picking and processing, where employees carry a physical list with them as they pick their orders. While this can work for smaller operations, larger operations often find that the paper-and-pencil method leads to less accurate orders and is generally less efficient than other systems.
Pick-to-light, pick-to-voice, and RFID-scanning systems, for example, are alternatives that could improve your order accuracy rates. It’s been shown in a number of studies that when operations upgrade their pick/inventory systems from paper-and-pencil to a more integrated form of order processing, they enjoy on average a 25% gain in overall productivity, and they can reduce picking error rates by a whopping 67%.
4. Simplify your pick lists.
If you have no intentions of converting your pick system into a pick-to-light or pick-to-voice system, you can still reduce error rates and improve order accuracy by simplifying your pick lists. (This is particularly important in split-case picking, or in operations that handle both split-case and full-case orders.)
Ask your employees if there are ever any parts of pick lists that cause confusion as they fulfill an order, and do what you can to remove any confusion that manifests. This alone can have major impacts on your ability to effectively do business.
5. Turn to automation.
Depending on the size of your operation, you may find that automating or optimizing various other processes will have either a direct or indirect impact on your order accuracy rates.
Technologies like sorters, AS/RS, AGVs and G2P solutions can help reduce fatigue and sharpen focus by reducing the amount of time that your employees spend walking from location to location to pick orders. Similarly, by optimizing your slotting strategy and inventory system, you can ensure that everything is exactly where it needs to be, which makes the process of picking much simpler.
The Bottom Line
Improving the accuracy of your order fulfillment operation is one of the most crucial steps involved in bringing your business to the next level. By better meeting the needs of your customers, you’ll be able to retain existing business and expand responsibly, making your operation more successful and, ultimately, more profitable.
Not sure where to start when it comes to improving accuracy? A systems integrator can help you understand what systems and technology you can put in place to reduce error rates and hit your benchmarks.