Increase Your Warehouse Order Picking Accuracy

If you want your warehouse order fulfilment operation to be truly successful, then there are few KPIs more important or crucial than order accuracy, which measures the cumulative accuracy of all fulfilled warehouse orders that leave your distribution facility, and the reason is clear.

When your warehouse orders are inaccurate, your operation is forced to waste time, resources, and capital correcting the order for your customer, remember the ‘end game” is to provide what the customer wants when the customer wants it, this is the difference between world class and not.

Beyond this, low warehouse order accuracy can damage the reputation of your order fulfilment operation and lower customer trust, ultimately making it more difficult for you to both retain your existing customers and attract new customers. Customers want to know that when they order something from your warehouse, they’ll get what they need. If they can’t trust you to meet that basic need, then they’ll go elsewhere, a competitor that can.

In short, if your company is in the business of fulfilling orders, then you need to get good at it. This means making sure that your warehouse order accuracy (measured as Perfect Order Percentage – DIFOT, delivered in full on time) hits the mark in terms of customer expectations.

If you’re looking for ways to improve the warehouse order accuracy of your operation and reduce costs, this list of actionable warehousing tips will help you do just that, boosting your customers’ satisfaction with your business.

How to Improve Order Picking Accuracy

Measuring your accuracy DIFOT

The first step in improving your warehousing order accuracy is to begin tracking the metric if you aren’t already doing so. After all, you can’t improve something if you don’t know where you currently stand.

If you have not been tracking your order accuracy, you should do so for at least a few months to get a sense of how good or bad your delivery performance is, so that you can understand whether or not improving order accuracy should be a priority.

Generally speaking, the distribution benchmarks below can be used to determine whether or not you should prioritize improving your warehouse operations around order accuracy or if there may be another area that you can possibly squeeze a larger return out of.

If your order accuracy is:

§ Less than 85.7%: There is major room for warehouse operational improvement and you should likely prioritize improving accuracy rates.

§ 85.7% to 95%: Your warehouse and distribution operation is at a competitive disadvantage and stands to gain much from improving rates.

§ Between 95% and 98%: Your accuracy rates are typical compared to the competition. Improvements can help your warehouse operation stand out but will yield less in terms of direct benefits.

§ Higher than 98%: Your warehouse order accuracy rates are great, but until you hit that 99.9999% there is opportunity to increase customer satisfaction and profitability.

Still unsure if you should devote resources to improving your warehouse operational order accuracy? Keep in mind that a 3% increase in perfect order percentage (of which order accuracy is a component) yields on average a 1% increase in profit.

Start by evaluating your picking and packing process.

Before making any changes to your warehouse and distribution operation, you should first aim to truly understand your warehouse order picking and packing process. The goal is to document and resolve any discrepancies or gaps which may force otherwise diligent warehouse workers to make errors in order to do their job.

We recommend that this be accomplished by interviewing your warehouse workers about the ways in which they complete the tasks assigned to them—everyone from your temp warehouse workers to your full-time warehouse operators, logistics managers, directors, and even the GM of Operations. You would be amazed as to how many times processes call for one step, but your warehouse workers do something else entirely because they are aware that the processes are broken, ineffective, missing, or out of order.

By having these candid conversations, you can likely create a list of issues to resolve that may be able to quickly boost your accuracy rates.

Post individual and/or group error rates.

If after measuring your warehouse accuracy rates you discover that there is some major room for improvement, consider posting error rates and throughput rates for your employees to see, a KPI chart is a good start.

For example, you can post individual or group error rates so that poorly-performing groups or individuals know how they stack up against their co-workers and feel a pressure to improve. NB: Its always a good idea to introduce this process slowly to the warehouse team, name and shame is sometimes difficult to manage.

Nobody wants to be at the bottom of the list, so this alone can be incentive enough for many warehouse employees. Typically, you can generate this report simply using your WMS; you can post KPI rates anonymously or using ID numbers if you are concerned about hurting morale.

Alternatively, you can post employee throughput levels. People like to be the best at what they do and they obtain even greater satisfaction by being the best. Showing real time picking rates certainly helps foster competition and sets the bar so others know what they should be achieving.

Posting warehouse errors and picking rates can also foster good proctoring practices if it’s built into your culture. Allow the individual who is setting the bar to teach and tutor those who “don’t get it.” The outcome is often a great win-win scenario for everyone.

Be sure on the KPI chart to show a trend, everybody has bad days, generally a month by month chart works well – this will show trends.

Incentivise employees to improve rates.

Beyond simply posting rates, consider finding ways to incentivise warehouse employees to improve their pick accuracy and rates. While it would be great if employment in and of itself was incentive enough, the simple truth is that many employees can and do perform better when other incentives are offered. (Movie tickets, gas vouchers etc)

Some warehouse operations find that directly offering bonuses to employees who hit improvement targets. These bonuses could be financial in nature—say, a bonus, hourly increase (careful here though)—or something like a company event or earned vacation days. Even just a friendly competition and a $25 gift card to a local restaurant can be enough to drive real warehouse operational improvements, as employees police themselves in order to improve rates.

Weigh everything.

Weighing your warehouse despatch orders is a relatively easy way to quickly check the accuracy of your orders. Modern order fulfilment software can tell you what an order should weight based upon the components making up that order. (Obviously your master data on weight, dims etc needs to be very accurate and up-to-date)

By pairing your existing software with a weigh scale in order to verify each of your orders before shipping, you can be certain that all of your orders are accurate.

Even if you only verify half of your orders by weight, you are decreasing the volume and burden on your warehouse checkers and quality control staff—all with very little effort and for relatively minor cost.

Consider pick-to-light or pick-to-voice systems.

Many warehouse order fulfilment operations are still using some version of paper-and-pencil lists for order picking, checking and processing, where employees carry a physical list with them on their clip boards as they pick their orders. While this can work for smaller operations, larger distribution operations often find that the paper-and-pencil method leads to less accurate orders and is generally less efficient than other systems.

Pick to light or pick to voice, and RFID scanning, for example, are alternatives that could improve your order accuracy rates. It’s been shown in a number of studies that when warehouse operations upgrade their pick/inventory systems from paper-and-pencil to a more integrated form of order processing, they enjoy on average a 25% gain in overall warehouse productivity, and they can reduce warehouse picking error rates by a whopping 67%.

Pairing these methods with goods-to-person technologies (carousels, vertical lift modules, shuttles, etc.) can increase accuracy rates even further and drive ROI at a substantial rate.

Simplify your pick lists.

If you have no intention (or its not in the budget) of converting your warehouse pick system into a pick-to-light or pick-to-voice system, you can still reduce error rates and improve order accuracy by simplifying your warehouse order pick lists. (This is particularly important in split-case picking, or in warehouse operations that handle both split-case and full-case orders.)

Ask your employees if there are ever any parts of pick lists that cause confusion as they try to pick and order, and do what you can to remove any confusion that manifests. This alone can have major impacts on your ability to effectively do business.

Reduce Warehouse Picking Errors

Improving the accuracy of your warehouse and distribution order fulfilment operation is one of the most crucial steps involved in bringing your business to the next level. By better meeting the needs of your customers, you’ll be able to retain existing business and expand responsibly, making your operation more successful and, ultimately, more profitable.