Every year, angry customers return incorrect orders in exchange for new items or refunds. These mistakes erase profits and damage the company reputation, and this is just in the retail sector. In more high-stakes industries like health care or defense, the error is even more costly and lives could potentially be put at risk.
All of this originates in a warehouse with a mispick. According to a 2012 Intermec study, businesses lost close to an average of $400,000 a year on mispicks. Given that the US Postal Service has seen an increase in the number of packages shipped through its service by 1.7 billion since 2012, it is easy to assume that the average has gone up.
Understanding the Four Types of Mispicks
There are four basic types of mispicks:
- The complete omission of an item from an order
- The wrong item is included in the order instead of - or in addition to - the right one
- Items are packed in the incorrect quantity
- Items are damaged when picked or packed, or else made unacceptable in some way.
All four are simple errors. While preventing the occasional accidental damage to items is a more challenging task, the other three types of mispicks can be essentially eliminated through increased warehouse management and resource planning systems.
"Over a third of shipping organizations carry a mispick rate of roughly one percent."
Larger Companies Are Paying More for Mispick Mistakes
A recent white paper from Kardex Remstar found that over a third of shipping organizations carry a mispick rate of roughly one percent. While this number sounds small, it quickly adds up in a larger organization.
That $400,000 figure only works for a smaller company, one processing roughly 65 lines an hour. In larger organizations, the cost of mispicks balloons to well over one million dollars a year. All this income lost with just a one percent mispick rate.
However, one should remember that revenue is not all that is lost from a mispick. While smaller companies are less likely to lose millions, they depend more on positive client feedback to retain what business they have. Each mispick should be marked as a negative experience that could potentially cause the loss of future business with that particular customer.
How Voice Picking Can Virtually Eliminate Mispicks
Luckily, voice picking technology exists and has been shown to lower the rate of mispicks to a small fraction of one percent. Voice picking works with a headset, freeing workers' hands and allowing them to concentrate more on the task at hand. The worker easily logs every item into warehouse management software, ensuring that the item picked matches the item ordered.
According to an interview conducted by Industrial Distribution, North American President for supply chain software provider Ehrhardt + Partner, Scott Deutsch, noted voice picking also increases employee safety by promoting a heads-up, hands-free working environment. This hands-free environment will also likely increase the care in which packages are handled, reducing the number of damaged units that reach customers.
Other methods exist to improve item picking accuracy, including the use of a wireless barcode scanner to authenticate the accuracy of every order. The bottom line is that more data allows managers to catch mistakes as they happen. The supply chain is moving at an ever-increasing pace. It is vital to ensure that accuracy is not sacrificed in exchange for speed.
Companies cannot afford to keep spending hundreds of thousands on the simple mistakes that are mispicks.