Order accuracy in e-commerce fulfillment can make or break the trust that’s so important between online retailers and their customers. Suffice it to say that in any operation where products are handled by several departments, in the pick & pack and shipping process errors are bound to happen. While a 100% accuracy rating is all but impossible to achieve, coming as close to perfection as possible should be your goal as an online retailer. With the unboxing experience an important aspect of e-commerce fulfillment, it is imperative to make sure your customers are satisfied with their orders. When the right systems are in place, companies can reduce instances where shipping the wrong item, the wrong color, or other common mistakes can mean a loss of customers.
Order accuracy measures the percentage of all online orders that reach their final destinations without any errors. Every instance of a quantity miscalculation or another type of mispick, such as an incorrect item with a similar SKU to the item ordered, costs your company time, labor, and potentially, your reputation to correct these mistakes. According to Oberlo.com, “58 percent of people stop doing business with a company because of a poor customer experience.” Order accuracy should be measured to determine where improvements can be made. Online companies need to continuously monitor this critical metric to improve transparency in their fulfillment processes.
Calculating Order Accuracy
First, determine the number of accurate orders fulfilled in a certain time frame. Next, divide that number by the number of total orders processed, then multiply that number by 100. The formula looks like this:
Order accuracy rate = (Total orders packed and shipped accurately / total of orders processed) * 100
For example, you fulfilled 150 orders. Of these, 3 orders contained errors. Order accuracy rate = (147/150) * 100. Your order accuracy rate, in this example, would be 98%.
Calculating your order accuracy is one thing, but how does it compare to the average accuracy rate for online retailers?
Good Accuracy Rates
What is a good order accuracy rate? Online, direct-to-consumer retailers average between 96% and a 98% accuracy rating. If you’ve determined that your accuracy rating rate falls in the 95% and lower, then you’ve got some work to do to improve your business’s competitive edge. In addition to tracking and measuring your accuracy rating, a few things you can implement to improve your accuracy rating include:
Constant Company Directive
Set out to improve your accuracy rates by informing your staff about this directive and emphasizing the importance of improving this metric, throughout all of your company communications. The goals you wish to achieve should be clearly outlined with a plan, explained in actionable terms for each employee. All employees should be coached on specific actions they can take to optimize the accuracy of their particular stations. Take into account SKU quantities, package dimensions and package weights, customized packaging and processing time, among other things to consider. Get your staff on board with improving your accuracy ratings by:
- Developing a system that shows everyone’s performance ratings, possibly a scorecard that charts the number of orders each worked on, tasks performed, and error rating. Everyone should be able to access this information, for transparency. Monitor accuracy ratings every day and calculate performance across individuals, teams, and departments.
- Incentivizing your staff members and teams by rewarding improved accuracy performance. Rewards can come as additional PTO hours, gift cards, or some other creative incentive.
- Award monetary bonuses to employees that show exemplary performance with no errors for a set amount of time.
- Celebrate employees that are making a difference by sending out company communications or by creating a celebration display in a prominent area in your warehouse.
Employees who drop below the baseline of expected errors may need to participate in a performance improvement plan that has been shown to improve performance and accuracy ratings. When you establish high standards for your company culture, your employees will want to do their best.
While it’s tricky to predict how much inventory to keep on hand at all times, too much inventory can cost more to store and can be confusing to your picking staff. However, online companies need to be aware of not having enough inventory on hand to fulfill orders. Stock-outs and backorders can cost your company, as customers will order from a competitor, rather than wait for you to restock your product. You can invest in warehouse management software that can help track inventory and automate some processes with full visibility of your inventory. You’ll be able to view your inventory in real-time and make decisions based on that data. Warehouse management systems can also provide quality checks and additional validations that can improve pickers’ efficiency, allowing order pickers to focus on speed and accuracy while extra validations and quality checks are happening in the background throughout each stage of fulfillment.
Pick And Pack Processes
Most errors in order fulfillment happen in the pick and pack phase. Some picking lists do not generate enough descriptive info to give pickers clear direction about which item to choose. A Warehouse Management System (WMS) can help streamline your pick and pack processes by digitizing pick lists and including images of products to be picked. Units of measure leave pickers open to errors. Some products are sold as each, some as cases, and other units in between. Training new employees on how to read pick lists correctly could reduce pick and pack errors. Warehouse technology can help improve accuracy. Voice-directed picking, pick/put to light, and RF picking are some of the other ways to reduce picking errors and can be implemented gradually, leveraging your current technology to avoid a large capital expense. Shipping errors can be reduced by check-weighing cartons and totes. Check-weigh totes with scales integrated into your conveyor system or stand-alone stationary scales. Some warehouses use slotting, a process that can simplify picking and packing, by organizing items according to location, type, size, weight, or what works best for your type of inventory.
Improve Your Accuracy Rating In Addition To Your Entire Fulfillment Operations By Partnering With A Tech-Based 3PL Service Provider
Many ways exist to help improve your accuracy rating in various areas of your fulfillment operations. However, these all need to work at the same time throughout your supply chain. That’s why an increasing number of online retailers are outsourcing their fulfillment operations to a reliable and trusted 3PL service provider, such as Phase V Fulfillment. E-commerce vendors can benefit from the tried-and-true processes and experienced personnel that 3PL providers have in place to ensure accuracy across multiple companies and brands. Phase V takes a detailed, process-oriented approach to your customized fulfillment plan, with quality control as an integral part of our fulfillment process from the moment we receive your products to the time we ship your packages to your customers, and beyond, if necessary. Our professional pick and pack logistics personnel work to establish a stringent pick and pack automation plan customized to streamline your pick and pack processes for faster, more accurate order processing. We eliminate headaches with clean order management procedures. Partnering with Phase V allows you to access your inventory 24/7 with real-time inventory counts, through our proprietary WMS technology.
Connecting to a dedicated specialist with the right technology allows your business to scale without the growing pains typically experienced with sales growth. At Phase V, we adapt our logistics to fit precisely into your supply chain. You can depend on us to minimize friction and maximize customer satisfaction. With a 99.99% accuracy rating, Phase V is always evaluating ways to improve our accuracy rating in moving your growing company forward, from clicked to shipped!
Call us for a free quote today.