A survey of 300 supply chain and distribution managers across the United States found distribution centers are losing an average of nearly $585,000 per year due to mis-picks. The cost of a picking mistake includes the cost to ship the item, the expenses associated with shipping the item back, processing it upon receipt, returning it to stock, and loss of customer satisfaction.
Further time is lost in correcting the mistake by picking, packing, and shipping the correct item back to the customer. Often, expedited shipping is needed to keep the customer satisfied, according to Hannah Kain author of “Simple Fulfillment Errors will Affect the Bottom Line."
An estimated 35 percent of facilities experience ongoing mis-pick rates of one percent or more. One percent may seem like an acceptable failure rate, but it can quickly become a growing problem for small eCommerce firms who rely on every new customer.
The data from supply chain and distribution managers means the real dollar cost of the average mis-pick is around $30 per incident. Less than one-in-five small eCommerce companies measure mis-picks in any form, meaning the cost might be even higher than estimates.
Because of this, utilizing WarehouseOS® can be a critical difference maker for your warehouse. One of the smartest ways to quantify the ROI (Return on Investment) for WarehouseOS® tablet-based apps is a formula. When a facility picks 200 lines per hour, averaging four SKUs per order, and running one 8‐hour shift per day, the total picks are 6,400 items daily. If one percent of those picks are incorrect, that translates to 64 mis-picks daily. The cost of each mis-pick at $30 per incident represents $1,920 per day in lost revenue a day.
Of all the processes going on in small eCommerce warehouses, order picking must be one of the most important. WarehouseOS® ensures an optimized picking method which directly impacts the speed of service to the customer. Accurate picking methods directly correlate to customer satisfaction. Small eCommerce firms must demonstrate the ability to quickly and reliably match customers with orders. Doing so creates a direct impact on the success of the business.
For very small eCommerce businesses the picker-to-part or Piece Picking Method is implemented. The order picker moves and collects the products required for one order at a time. This basic method of order picking involves sending a staff member into the warehouse with a list of items and a box to gather them in. The employee finds and retrieves each required item, taking the quickest route through the warehouse they can. While simple, this is certainly not the most efficient method available, unless such picking is directed in the tablet-based app offered by WarehouseOS®.
In the zone picking method, every order picker is assigned a single zone and retrieves items located in that particular zone. With the batch picking method, each order picker is assigned to multiple orders at the same time, in a bid to reduce the number of trips required to each location.
Automated picking systems are often the most efficient and reliable options available, yet represent a higher cost for smaller eCommerce operations just getting started. They can combine conveyor systems with intelligent warehouse software to create an automated picking system which is perfectly tailored to the warehouse. The benefits of this automated picking system can blend best practices installed with WarehouseOS®. It is designed alongside the customer to transform warehouse operations.
The WarehouseOS® automated picking system includes a system and software working together to create an effective and productive solution that handles order fulfilment needs which eliminate mis-picks. It reduces labor costs associated with a more efficient picking process. The result is increased accuracy without the need for costly RF Guns.
Non-cloud-based WMS’s have certain limitations that may force you to invest in an entirely new system later on. Cloud-based WMS solutions scale with you as you grow your business. Read more to learn the benefits of going to the cloud.
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