By Will Schneider at Warehousing and Fulfillment.
If you’ve been in the ecommerce business for any length of time, you no doubt understand how critical accurate order fulfillment is to the success of your company. For example, one recent study found that 63% of online shoppers expect a three-day delivery window as standard. That doesn’t leave a lot of room for mistakes and inaccuracies!
With that in mind, how can you increase the accuracy of your fulfillment center? Here are four suggestions that can help.
Increase Inventory Accuracy Tied to Your Checkout Process
Did you realize that, on average, retail inventory is accurate less than two-thirds of the time (63%)? When it comes to running an ecommerce business, dealing with that level of inaccuracy could cause incalculable harm to your brand. After all, if a product is in a customer’s shopping cart, then he or she expects it to be available for purchase. If it’s actually not, the customer will get frustrated and perhaps never engage with your company again.
How can you improve the accuracy level of your inventory tied to your checkout process? One way is to invest in inventory management tools, such as software programs, that enable you to easily track inventory levels and even set re-order points when stock gets low. An inventory management platform that’s integrated with your website will enable you to delight customers on a much more consistent basis than would otherwise be possible.
But online inventory levels are only as good as the accuracy of the data. Therefore, regular cycle counts are imperative to ensure inventory levels are accurately reported. In addition, inventory levels can be impacted by inaccurate receiving and picking and shipping errors—so a holistic approach to codifying processes and procedures and leveraging technology throughout the entire logistics process (from receiving to inventory management and fulfillment or shipping) is imperative.
"Bulletproof" the Picking and Packing Process
The picking process—in which specific items are set aside for specific orders—is a key component in order fulfillment. Obviously, if the wrong items are picked and packed on a regular basis your business’ profit margin will take a significant hit. In contrast, an efficient picking and packing process will help you to maximize profit and minimize operational costs.
With that in mind, many ecommerce companies use warehouse management systems (also known as WMS) that enable you to collect and analyze data related to your fulfillment center’s picking and packing metrics. Such WMS tools and features include:
- Automated inventory counts.
- Data analysis on which individuals or teams have the best (or worst) picking and packing metrics.
- Analysis on which picking routes and methods are most effective.
- Barcode scanning integration to mitigate errors on picking and shipping.
Of course, several enterprise-level organizations have invested in automated, high-tech robotics to pick and pack orders. However, if you don’t have the resources to implement a 100% automated solution, there are still things you can do to optimize the pick and pack phase. Besides utilizing WMS, you can also make small changes to your process, such as combining customer orders into single travel units. All of these changes can significantly help reduce overall fulfillment costs.
Emphasize Quick and Accurate Receiving
It goes without saying that quick, accurate receiving is essential to successful order fulfillment. After all, if your warehouse receivers lag behind the pickers, or make mistakes as to which products have come in, then your stock levels will reflect those inaccuracies—and your entire ecommerce business will suffer.
How can you implement faster, and more efficient receiving at your fulfillment center? Perhaps the single most important factor is to have a well-trained receiving team on-hand for new shipments, ready to bring the product into the warehouse. This will eliminate dock slowdowns (and any extra fees that carriers may charge as a result).
At the same time, make sure that your inbound shipments are scheduled well in advance. For instance, you could provide each carrier with certain days and times each week for their deliveries or give them a predefined inventory window for each incoming shipment. By sticking to a consistent delivery schedule, you’ll help your receiving team maintain a high level of productivity and keep your inventory levels accurate throughout the week.
Equally important is ensuring that initial counts are accurate. In order to meet this end, it’s important to leverage the best of receiving processes and technology. Utilizing computer systems for counts will take some of the potential for manual errors out of the equation and emphasizing accuracy over lower costs may be necessary. Yes, it costs more to perform full counts at this stage rather than random counts, but it may be a price you need to pay not to have any hiccups upon checkout for the end customer.
Choose Helpful KPIs to Track Performance
Finally, you want to make sure that you’re tracking the entire inventory, fulfillment and shipping process; and in order to do so, you need to use specific metrics as key performance indicators (KPIs). These KPIs are vital to your ongoing success, since they’ll help you identify which aspects of the order fulfillment process need to be prioritized for improvement.
For example, one important metric to use is total order accuracy rate, which is the total of orders accurately fulfilled as a percentage of total orders filled.
Generally speaking, if your order accuracy rate falls between 95-98%, then your ecommerce business is performing at industry-standard levels. Moreover, for every increase of 3% in order accuracy, you’ll likely see a corresponding increase of 1% in profitability. Of course, even if your rate is above 98%, there’s always room for improvement.
Order accuracy is an important KPI, since it provides you with an idea of how well your ecommerce brand is performing compared to the competition. But there are other inventory fulfillment metrics that you should be using as well, such as:
- Inventory accuracy rate
- Out-of-stock rate
- Carrying cost of inventory
- Average time to sell
Keeping tabs on these KPIs will help you to know which areas of your order fulfillment process need to be given priority.
Moreover, you can also leverage the power of customer surveys to monitor your order fulfillment performance. For instance, you could send out email content designed to survey customers on their shipping and fulfillment experience. This survey could include multiple-choice questions, open-ended comment fields, or a combination of both.
Once you have the results of your survey come in, you can correlate that information with the picking, packing, and shipping performance of specific departments, teams, or individuals. Investing in a continuous survey cycle will likely yield several key data insights with regard to your shipping and fulfillment process and help you to identify opportunities for improvement.
Increased accuracy means a better customer experience. In summary, these four suggestions can help you to increase order accuracy from your fulfillment center, which will in turn enable you to provide a superior customer experience, and ultimately win more first-time and repeat business. Winning customers is more than just providing a superior product or unbeatable price. It’s equally important to beat the competition by executing a superior fulfillment and shipping experience.