Do you know how accurate your warehouse’s picking operation is? In an ideal warehouse world, every order that gets picked is correct and sent out to the customer with happy results. But, in the real world, we know it is completely different. Picking errors can occur for many reasons but, it is important you fully understand some of the more common picking errors to help you prevent them from happening in your warehouse.
Did you know the average returned purchase in the UK will pass through seven pairs of hands before it is listed for resale again? Every day, there are thousands of packages that begin their very costly journey between warehouses and processing centers. This is where the products are cleaned, repackaged and readied for their new owner.
Let’s just have a think about the cost of a picking mistake. It isn’t just the cost of the item being picked wrong, but it is also the other expenses which are associated such as the shipping the item back, processing the item when you receive it and then putting it back into the inventory. While at the same time picking, packing, and shipping the correct item to the customer as quickly as possible. Oh, and lets not forget the customer. Now the customer is annoyed too about the picking error and how much does that cost?
It is an estimated that 35% of fulfillment operations suffering from ongoing picking error rates of 1% or more, the cost can add up very quickly!
Wrong Item in the Wrong Location
Errors can occur when items are placed in the wrong location leading to pickers picking up the wrong order to send out. As an online shopper myself, I have experienced being sent the incorrect item which then means I have to spend my time sending the item back and also being left annoyed as I haven’t received the item I wanted. If this is a problem that occurs regularly you will start to see an effect on your financial margin due to the total cost of returns. The estimated cost of returns to retailers in the UK works out as £60bn a year!
A source on Financial times said: “It can cost double the amount for a product to be returned into the supply chain as it does to deliver it,” says Iain Prince, supply chain director at KPMG, the consultancy firm. He points to the online purchase of a coat, for instance: “To pick and deliver an order costs between £3 and £10 — it could cost double or treble that to be processed on the way back.”
To help solve this problem it is important you have a labeling barcode scanner, and warehouse management software as it can make this problem less likely to happen. Having the wrong item in the wrong location can also be down to your racking system. It is important you keep the correct item, in the correct location. Having a mesh divider system in place will help ensure each item is kept in the correct place.
Items are Multiple Locations Throughout The Warehouse
In a warehouse, it is possible to have the same items placed in multiple locations throughout the warehouse. This is done in case one of the locations doesn’t have the correct quantity to fill an order, this means the picker will need to pick the remaining amount from another location. To help prevent picking errors, your picking system needs to ensure each section is next to each other and separated by mesh dividers. As then the picker won’t have to lose time walking around the warehouse searching for the other location.
Picking Areas To Close Together
In many warehouses, items are kept in orders by SKU. But, only because they have a system in place doesn’t mean it works! It can cause all kind of trouble when picking items. For example, part 12280 can be mistaken for part 12281, which sits next to each other. Part numbers should be separated with a mesh divider to allow each part number and items will have their own section to make picking a lot easier.
The Cost of Picking Errors
Now you know some of the types of picking errors but have you considered the costs of picking errors in your warehouse management strategy?
- Returns – Returns can be very expensive as there are lots of parts to a return. Such as the cost of documenting the problem, return shipping, and retagging the product.
- Lost Sales- A picking error means a shipping error and that shipping errors results in your customer’s havings low customer satisfaction. Making one picking error can affect the customer’s perception of an entire order! That’s why it is so important to improve the picking process before it has an impact on your customer’s views towards your company.
- Customer Service- Making a picking error can have an impact on your customers. Leading to more time spent in customer service to deal with the complaint and to solve the problem your customer has.
- Repackaging- To ensure the picking error can be reused you have to add extra expenses for the product to be repackaged.
- Additional Shipping- You’ll have the cost of the return but there will be even more extra cost as you need to consider the cost of expediting the correct order.
- Sales Cost- Making errors mean your sales force will be spending more time placating customers rather than bringing new sales into the business.
- Labor Cost- The picking error could be due to stocking errors, meaning now you’ll to spend time-solving the problem.
Taking action to prevent these common picking errors will make your warehouse much more efficient. Our EasyDIVIDERS act to prevent these type of common picking errors. One critical step to take is to upgrade your racking system and ensure you have an organized warehouse with mesh dividers to help prevent stock being mixed within other stocked goods.
Mesh Dividers are used to separate products to identify goods quickly and efficiently. They are used to transform a mesh deck into a form of picking areas in warehouses to stock rooms.
So, what is stopping you from taking action? Contact us today about our mesh dividers.