How much money and uptime is your factory losing to mispicks?
22 Sep 2021
Invar Integration's Nick Hughes advises close inspection of how much mispicks could be costing your business...
A global survey of some 250 supply chain managers, undertaken some years ago by Intermec, put the average figure of a mispick at around £16, adding up to £282,000 annually for the average business.
Most organisations believe they have good or excellent pick accuracy, but good or excellent can be pretty subjective. Even with 98% accuracy that still means two orders in every 100 are incorrect, and with every 1000 orders there are 20 unhappy customers. As order volumes climb, the issues escalate.
Each error costs the business in terms of customer care personnel time, return postal costs, warehouse staff time in checking and processing returned items, materials used in repacking the goods, time taken placing the item back into stock, and then, of course, all the costs associated with generating and processing a new order for the correct item and delivering it to a somewhat disgruntled customer. And if the mispicked item isn’t returned, or is unable to be resold as new, you’ve got the costs of that too.
What’s more, it’s worth noting that the £16 figure mentioned in the survey is just the average. High value items, or those despatched overseas, may involve costs exceeding £70.
A happy, loyal customer makes repeat purchases whereas a Voxware survey found that 73% of consumers that receive incorrect items are much less likely to order from that business again.
Trust is hard to gain and easy to lose.
Also, consumers are increasingly guided by a brand’s environmental performance. Mispicks result in wasted packaging, unnecessary road miles and increased CO2 emissions.
In just about every case, mispicks are down to human error, and the act of picking is still, essentially, a manual process – albeit, these days, often assisted by technology. Humans get tired, become distracted and when asked to repeatedly take quick decisions over a long shift, mistakes happen. Many technologies can help, such as pick-by-light, pick-by-voice, user friendly and ergonomic workstations or even removing the person entirely with robotics. Regardless of solution, verification of the pick is absolutely essential in driving error rates down.
Radio Frequency technology is an under utilised solution. RF tagging has moved on considerably in recent years and now tags are cheap and accuracy is high.
Flexibility, scalability and accuracy will be important factors in the equation, but the best solution will be determined by the product characteristics, throughput rates and order profiles. A good integrator, with all the necessary software resources at its disposal, will be able to help you design the most appropriate solution using the very latest technologies.
Ecommerce is heavily dependent upon the efficient picking, packing and fulfilment of orders, and as the number of transactions grow, pick accuracy rises in importance – every negative customer review has the potential to damage sales.
Luckily, there are technologies available that can help increase capacity, whilst simultaneously driving-up pick accuracy. Using automation to bring goods to the person allows for higher throughput rates and when combined with directed picking technology, and item scanning for verification, can deliver the volume increases demanded of an expanding business, along with the near perfect picking performance that ensures excellent, as opposed to bad, reviews.