Order Accuracy KPI: Realistic Metrics for Fulfillment Excellence
by Staci Americas on Nov 7, 2023 10:00:00 AM
Precision is the cornerstone of success in B2C order fulfillment. Order accuracy is a critical metric, but it’s far more than that. It's a pivotal factor in the overall customer experience.
In this article, we look at why the order accuracy KPI is so critical, current standards for order accuracy, and how technology plays a role in driving this metric up and to the right.
Understanding the Order Accuracy KPI
Order accuracy is the percentage of your orders that are fulfilled and shipped without errors. A high order accuracy rate means that your customers almost always receive the exact items they order in the proper condition.
Research shows that 65% of your sales will come from existing customers. If you send them the wrong stuff, a large percentage will start shopping elsewhere.
In our quest to understand and improve order accuracy KPIs, we are not merely focusing on a statistic; we are actively shaping the customer experience, operational efficiency, and the financial health of your businesses.
Why is Order Accuracy Crucial?
When creating your order fulfillment metrics, order accuracy needs to be at the top of your list. The benefits of accurate order processing include:
- Accurate orders create a ripple effect of customer satisfaction. When customers receive precisely what they ordered, their trust and contentment grow. This, in turn, fosters repeat business and positive reviews, contributing to brand loyalty and reputation.
- Reducing errors minimizes the time and resources wasted on rectifying mistakes, streamlining logistics operations, and enhancing overall efficiency.
- Precision in order processing significantly reduces costs associated with returns, refunds, and reshipments, which can eat into profits.
Suggestions for Achieving Near Perfect Order Accuracy
A 3PL warehouse with a 97% picking accuracy rate operates on the low end of the scale in terms of acceptable performance. (On 500,000 orders a year, that’s 15,000 mis-picked orders). Achieving a 99.5% picking accuracy benchmark rate is a formidable challenge, but doable. Here are some suggestions:
- Get your inventory in order. You need sound inventory management practices to sustain excellent order accuracy KPIs. If inventory is disorganized and in the wrong place, even the most accurate pickers can’t rectify that problem.
- Improve warehousing slotting. This simplifies the picking process by storing items in places that make the most intuitive sense to associates. Data analysis should inform your slotting strategy. Let’s say a common error is to pick item B instead of the correct product, item J, because they look almost exactly the same. In that case, don’t locate them next to each other.
- Set clear objectives for order accuracy and share them with your associates. When setting up KPIs for order fulfillment, including order accuracy, understand your current baseline and make the goal realistic. If possible, report on your order accuracy KPI in real time using monitors or boards that all associates can see.
- Report results by associate and offer incentives for top performance. Don’t underestimate the power of a little healthy competition among associates. People want to win; it’s human nature. Particularly if there is an incentive to chase. And no one wants to be last.
- Deploy technology to improve accuracy. There are many options to evaluate. Read on for a few ideas.
How Technology Can Help Achieve Excellent Order Accuracy KPIs
Modern technology plays a pivotal role in mitigating mis-picks and elevating order accuracy in fulfillment operations. Here are some warehouse technologies that can automate and streamline the pick and pack fulfillment process:
- Voice picking provides audio instructions to guide associates, ensuring the correct items are selected efficiently. A scan of the item’s bar code or a voice command confirms that instructions from the voice system were carried out correctly.
- Pick to Light technology employs visual cues to direct pickers, enhancing accuracy, speed, and efficiency. Essentially, associates scan a new order and then the system displays flashing lights on the bins with products for that order. The lights also display the exact number of items to pick. Pretty simple and hard to mis-pick.
- Autonomous robots are fantastic tools to increase associate productivity since they eliminate most of the walking between aisles and packout stations. But warehouse robots also ensure accurate order picking. For one, a picture of the item to pick can be displayed on the robot’s screen. As items are picked and scanned, the system will not allow the associate to complete the order unless the products picked match the order exactly.
- Cameras at pack stations. Staci Group has cameras installed above packing stations that utilize AI to give real-time feedback to the packer, ensuring that products are packed correctly and that every item goes out in perfect condition.
One of the top reasons that e-retailers switch fulfillment providers is frustration over poor order accuracy. The “noise level” created by custom complaints compels those responsible for the fulfillment function to make a change. In those cases, it could make sense to search for a 3PL, like Staci Americas, that specializes in direct-to-consumer fulfillment. You want partners experienced with high-volume, pick and pack operations.
Multichannel Logistics Partnerships - Your Pathway To Fulfillment Excellence
In any warehousing operation, particularly eCommerce fulfillment, there are dozens of performance KPIs that can and should be tracked. But the order accuracy KPI stands out as a leading driver of customer satisfaction, operational efficiency, and cost control.. Its impact resonates far beyond mere numbers, reaching into the heart of customer loyalty.
If you’re struggling to achieve excellent performance metrics for order fulfillment, contact Staci Americas to unlock the potential of your fulfillment operation to drive enhanced customer satisfaction and profitability.
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