How to eliminate fulfillment errors & avoid these 6 expenses
Order fulfillment is not a perfect practice, as much as merchants wish it were. Whether it is human error, glitches in order management solutions or any other factor, mistakes happen and customers will occasionally wind up receiving the wrong product. While it is difficult to achieve 100 percent accuracy with order fulfillment, this is the standard for which merchants must strive.
Mistakes in order fulfillment are costly. One report from Fulfillment Companies broke down all the different expenses associated with mis-shipment, which include:
1. Double pick time:
When the wrong order is sent to customers, merchants will wind up having to pick the same order all over again. They are essentially spending the time required to fulfill two orders on a single purchase.
2. Shipping charges:
While not all retailers will pay for return shipping, it is generally a good idea to do so if they made an error and sent the wrong order to customers. This results in more costs incurred, as merchants need to not only pay for the item to be returned but also sent back out to customers again.
3. Shipping packaging:
When customers return goods, it is likely the container will sustain some damage – it may not be returned with all the contents such as packing peanuts and foam blocks and the box or envelope itself may be damaged. Merchants will need to return the item to customers in fresh packaging, which is an additional cost that must be accounted for. This expenditure could be even higher for companies that sell extremely fragile or unique items that come with highly specific shipping requirements.
4. Customer service:
Customer service agents are busy people, and having to deal with returns due to to inaccuracies in the order fulfillment process only makes their jobs more challenging. Merchants may have to hire additional agents if this problem is persistent, but even if it is infrequent, it still creates additional cases that may result in work getting bogged down.
5. Win-back efforts:
Sending the wrong item or order to customers is an outward sign of incompetence and shoppers may lose their confidence and patience in a merchant that cannot ship the right items. Retailers looking to make right with customers may feel the need to offer some sort of incentive, such as $5 off the next order, in an effort to win back the customer.
6. Lost customers:
Sometimes, the whole return process can be so arduous that nothing will win a customer back. After all, there are thousands of merchants on the Web, so why should customers need to go through the extra mile with one brand when there are others in the wings? This can be a huge setback for merchants, particularly if they lose a repeat shopper.
Minimizing mistakes in the order fulfillment process
There are numerous opportunities for mistakes throughout the order fulfillment process. Sometimes, the error comes down to personnel – they put the wrong item in the wrong package, they make a mistake in packaging the item which results in damaged goods or they pick the incorrect product in the first place. Perhaps an item was even initially stocked incorrectly, leading to selection errors.
Other times, the mistake is due to an error in the system – perhaps SKUs are not aligned across all channels, so when a customer orders one item, the picker is told to pack another. Many retailers struggle with fulfillment, which makes ensuring accuracy a real challenge.
The first place retailers should look to eliminate fulfillment errors is order auditing with barcode scanners. By setting up a scan station prior to shipping, warehouse operators can scan the product barcode, verifying the item picked is in fact the item on the order and can be processed to the next step. One client of ours, Premier Wines, eliminated $25,000 of wasted spend on fulfillment errors. Now, with the introduction of barcode scanners, their orders are accurate, their customers are satisfied, and Premier Wines can be confident that their customers can trust them.
Another way to verify picked items is by including pictures on pick tickets. This helps warehouse operators not only match the item they are picking to what is shown on the pick ticket but also identify any errors in the system where the actual product may have been assigned to the wrong sku or location in the warehouse. Sometimes just looking at a sku number and words on the paper don’t send up red flags, especially during a long work day.
Questions on how to improve your order auditing process? Give us a call at 410-276-4600. We’d be happy to help.