3 July 2022 Picking errors are among the main enemies of a company’s financial health. It may be that in daily operations, no one pays much attention, but when they occur frequently, the damage is evident. Studies reveal that a single picking error can reduce the profitability of an order by up to 13%. And it’s not just a matter of recipe. It has an even worse consequence: the loss of customers. It is, therefore, a domino effect that can cause significant damage to the business. This already shows that they cannot be admitted to the warehouse. In fact, it ends up being a great incentive for companies to implement practical improvements and technologies to achieve the necessary accuracy in the separation process. Furthermore, it is important for managers to know the most frequent errors and how to reduce them. This is what we will talk about in this text. To help you better understand the context, we have listed the most frequent error situations: • Choosing the wrong item. • Selecting the wrong quantity (too much or too little). • Choosing an unacceptable item due to damage, incorrect labeling, or packaging. • Exchanging data. • Losing or forgetting items somewhere. Do any of these errors occur frequently in your company? If so, it’s time to change. What is the acceptable picking error rate for your company? In operations that do not use barcodes or RFID tags, error rates between 1% and 2% can be expected. When technologies are properly implemented in the warehouse, involving all processes, the accuracy rate can increase up to 99.99%, which, in fact, should be the acceptable percentage. Understand why: If your company has an error rate of 1%, works with an average of 2,000 orders per day, for 260 working days a year, and if each error costs an average of R$50 (considering only operational costs), the annual amount of the loss will be: 1% of 2,000 = 20 20 x 260 = 5,200 5,200 x R$50 = R$260,000 R$260,000: this is the loss you can suffer each year. Have you noticed how the 1% rate can seem small but actually hides a big problem? With picking errors, your operation will suffer impacts such as: 1) Lost sales: A single shipping error can influence the customer’s perception of the entire order. This generates dissatisfaction and reduces customer retention in your business. 2) Returns: Returns are costly and involve everything from the cost of documenting the issue, to shipping the return, to resending, etc. 3) More expensive shipping: You will likely need to expedite the delivery of the correct item after the return and will most likely pay more for shipping. 4) New packaging: You will need to spend on new packaging to send the correct product to the customer, even in cases where it is possible to reuse the returned item. 5) Labor cost: Errors mean wasted hours, which increase labor costs. 6) Service and sales costs: Your team will spend more time responding to complaints and finding a solution. And the worst part: wasting minutes that could be used to make new sales. For these reasons, companies have increasingly prioritized accuracy in the separation process. And this starts with recognizing errors and seeking the best ways to reduce them. Check the following topic for valuable tips so you can also reduce the occurrence of these errors in your operation. How to reduce picking errors? #1 Track all errors that occur and calculate their costs Among all the metrics you need to have in your warehouse, one of the main ones is related to the number of errors that have occurred, their causes, and the costs generated. Indicators like OTIF (On Time In Full) and OFR (Order Fill Rate) can help you identify error rates. #2 Map all your processes It is also important to map all warehouse processes from start to finish, focusing on the areas where errors occur. Then, try to identify the main causes and find solutions. #3 Use advanced technologies Advanced technologies, such as warehouse management systems (WMS) and automatic identification systems (AIDC), can help reduce picking errors. These systems allow you to automate many processes and minimize the need for human intervention. #4 Employee training and engagement Your employees are a key element in reducing picking errors. Ensure they are adequately trained and understand the importance of accuracy in their work. #5 Constant monitoring and continuous improvements Once corrections are implemented, it is important to constantly monitor the results and try to further improve the process. Reducing picking errors is an ongoing goal. In conclusion, picking errors are costly and damaging to a company, but they can be reduced through careful process analysis and the implementation of practical and technological improvements. 8 Tips to Reduce Picking Errors Deagor WMS per ecommerce può aiutarti!