How to Increase Order Accuracy within Fulfillment Centers
November 17, 2020
What do you want to learn?
In ecommerce, order accuracy is one of the most important metrics to track as it’s directly linked to trust between a brand and their customers. However, there’s a lot that goes into preparing an order before it gets delivered, and it can be challenging to reduce common picking and packing errors.
With the right systems and processes in place, you can improve order accuracy and meet customers’ expectations.
Taking small steps to continuously improve your order accuracy rate can yield massive benefits for your business that are absolutely worth the extra effort.
In this article, we’ll go over some tips on how to improve order accuracy and how a trusted logistics service provider like ShipBob can help.
What is order accuracy?
Order accuracy is the percentage of all ecommerce orders that are fulfilled and shipped to their final destination without error, such as a mis-pick of an item or incorrect unit quantity. Order accuracy is an important metric to track because it highly impacts customer satisfaction.
Delivering the wrong order not only negatively impacts the unboxing experience, but it can also be costly and time-consuming as you will need to spend extra time and labor to make it right.
How to calculate order accuracy rate
Order accuracy is a critical metric that should be continuously monitored and improved upon. To calculate it, find the number of accurate orders you’ve fulfilled, divide it by the number of total orders fulfilled, and multiply that number by 100.
Order accuracy rate = (Total orders fulfilled accurately / Total orders fulfilled) * 100
Let’s walk through a quick example. If you fulfilled 100 orders, and 2 of them had mistakes, then your order accuracy rate is 98%. See the calculation below:
Order accuracy rate = (98 / 100) * 100
Order accuracy rate = 98%
What is a good order accuracy rate?
Retail fulfillment consists of many moving parts and human intervention. Reaching a 100% order accuracy rate is not always realistic, but your rate should be as close to 100% as possible.
Most successful direct-to-consumer (DTC) brands see an order accuracy rate between 96%-98%. If your business falls within that range, improving your accuracy rate can give you an edge over your competition.
If your business is achieving 95% or below, you are at a competitive disadvantage and should look to improve your order accuracy rate so that you don’t discourage customers from purchasing from you again.
4 ways to improve your order accuracy
Whether you’re struggling with order accuracy or simply want to improve it, continuously finding ways to optimize your order fulfillment process to reduce human error can help set your business up for future growth. Here are a few common ways to improve order accuracy.
1. Set order accuracy rate goals
Without firm direction, it can be easy to both let your order accuracy rate decrease or remove it from your list of key metrics to track. Be sure to take time to establish goals around optimizing and improving it.
Start by finding your current order accuracy rate, and then set a realistic goal and time frame on action items. If you have a team, make sure to clearly communicate the goal and how each team member can help to improve the rate.
Read how ShipBob’s leadership team got buy-in on this goal setting initiative within their fulfillment centers here.
2. Improve the inventory management process
Your inventory management process can play a key role in how accurately orders are picked. Issues with orders often stem from disorganized inventory and lack of stock control in your warehouse, or not having enough inventory in stock to fulfill orders.
3. Optimize the picking and packing process
During the fulfillment process, most order processing errors occur during the picking and packing phases, so be sure to take the time to evaluate areas of improvement across your distribution centers to lower error rates.
If you work with a team, get feedback on what can be improved, optimized, or even automated across fulfillment operations to reduce common errors, such as choosing the wrong color or size of a similar SKU.
- Are you using the right barcodes?
- Are picking lists descriptive enough?
- Are they digitized and optimized for similar inventory routes?
One solution to this is warehouse slotting, or the process that simplifies the picking and packing stage by storing ecommerce inventory that makes the most sense for the picker (such as by type, size, weight, location, etc.).
Efficient slotting can improve picking accuracy and functionality by eliminating any possible confusion for the picker, which also allows for faster picking by taking the guesswork out of where certain items are located.
4. Implement the right fulfillment center technology
Implementing fulfillment center technology is one of the best ways to improve the order of accuracy, as it helps reduce the amount of manual work needed to fulfill and ship an order.
A warehouse management system (WMS) allows you to automate processes that makes it easy for an order picker to focus on speed and accuracy, while providing extra validations and quality checks throughout each stage of fulfillment.
By implementing a WMS, you also gain full visibility into real-time inventory levels and storage, staff productivity, and fulfillment workflows within a warehouse.
A WMS is one of the best ways to identify areas of improvement without the need to conduct continuous manual warehouse audits.
How ShipBob handles order accuracy across fulfillment centers
Partnering with a professional fulfillment provider like ShipBob can help you fulfill and ship orders accurately. By outsourcing fulfillment to the experts, you get access to the following strategies ShipBob uses to ensure high order accuracy rates for our merchants.
1. Implementing the right technology
ShipBob owns the entire order tech stack, which increases the velocity and scale at which we can make any type of change to our technology based on real-time customer feedback.
Our proprietary WMS tracks and centralizes important fulfillment data and distribution metrics, such as how many orders per hour a picker can pick, to how long it takes to receive, count, and stow new inventory that arrives.
Our technology also allows us to identify which fulfillment centers are performing the best and learn from them to improve our entire network.
“With our old fulfillment solution, because of a lack of ownership of the entire fulfillment stack, it was difficult to rectify, unlike with ShipBob who owns the entire stack: inventory and order management system, warehouse management system, and their fulfillment centers.”
Gerard Ecker, Founder & CEO of Ocean & Co.
2. Keeping business owners updated
As mentioned, our fulfillment centers are powered by our technology, which means you can access real-time updates on all orders throughout the process.
Using the dashboard, you can filter orders by status, search for specific orders, and get a quick overview of any orders that require action.
To provide full transparency, ShipBob’s proprietary merchant dashboard connects to our WMS and gives each merchant deep insight into fulfillment performance, how we’re hitting our SLAs, visibility into order status and inventory counts, and much more through our analytics and reporting tool.
“ShipBob has grown tremendously in the analytics area, giving us access to different views of our business. Their analytics tool has been great to have. We can see inventory reconciliations and easily view SKU velocity, transit times, and inventory distribution recommendations.”
Pablo Gabatto, Business Operations Manager at Ample Foods
ShipBob’s software also lets ecommerce brands upload photos of their products for the picking and packing teams to see, has digital verifications for fulfillment associates each time an item is picked or packed, lets brands set packaging preferences, and has other safeguards in place to reduce the possibility of an order going out wrong.
3. Optimizing the supply chain
By integrating your online store with ShipBob’s fulfillment software and sending us your inventory, you’re able to tap into ShipBob’s fulfillment logistics infrastructure, technology, and expertise to further optimize your supply chain.
By partnering with a 3PL like ShipBob, you don’t have to spend time fulfilling orders or investing in a warehouse yourself. We take care of all of it for you while providing full control and transparency into the entire fulfillment process.
“Now we’re at two ShipBob fulfillment centers, and being able to have the analytics and see how everything is working together has been extremely helpful for me on the operations end. It definitely helps me with inventory management and seeing what’s going on. It truly helped us on a day-to-day basis. Even though we’ve grown, I haven’t spent more time on the business from an operations standpoint.”
Dana Varrone, Director of Operations at Organic Olivia
Accurately delivering a new customer’s order is one of the most critical measures of ecommerce success. While you can employ strategies to improve your order accuracy rate, the bottom line is that delegating the fulfillment process to the experts is one of the easiest parts of the business for an ecommerce brand to outsource.
Our goal at ShipBob is to help you save time on logistics operations and offer a best-in-class fulfillment technology that helps you efficiently run your business. In addition to focusing solely on order accuracy rate, we also closely measure ‘support cases per order,’ which is a bigger indicator on how well we’re performing as your logistics partner.
This metric also provides you with information you can use to prepare your customer service team for future growth based on the projected case volume per number of orders.
Whether it’s assigning pickers optimized routes, opening more fulfillment center locations to cut down on shipping times, or improving our warehouse picking and packing processes, ShipBob is constantly looking for ways to improve and achieve higher levels of order accuracy.
To learn more about how ShipBob works and to request fulfillment pricing, click the button below.
Order accuracy FAQs
For ecommerce businesses, order accuracy should always be a top priority. Here are a few answers to the most common questions that people have about order accuracy rates.
How do I improve order accuracy?
Once you assess your current order accuracy rate and set a new goal and timeframe, look for ways to improve the picking and packing processes. You can also implement technology, such as a warehouse management system to further improve efficiency and automate time-consuming processes. Improving order accuracy and reducing human error can take up a lot of time, money, and energy. That’s why many brands choose to outsource logistics to a trusted 3PL that has the technology and manpower to ensure order accuracy.
How do I measure order accuracy?
Order accuracy is the number of orders processed accurately out of the total number of orders processed. To calculate order accuracy rate, take the number of accurately fulfilled orders and divide it by your total number of orders. Then, multiply that number by 100 to get it to a percentage.