A perfect order has the right product, in the right quantity and it was delivered at the right time. We are all aiming for this but sometimes we fall short and it can be costly. Order processing errors typically result in the products being returned and credit issues. This all takes up valuable staff time and damages our relationship with our customers. Even a ninety-nine percent order accuracy rate may not be enough for some businesses. If you are shipping 500 orders a day, that works out to 35 returns per week. That is 35 unhappy customers a week. Too many for most of us. Here is a list of common errors and how to fix them. Let me know if you have your own and how you solved the issue.
1. Order Entry – is that a “5” or an “S”
The first opportunity for errors starts at order entry. Depending on how the order is received, there are different degrees in which an order needs to be reviewed.
When using Electronic Data Interchange (EDI) or a web based eCommerce process, the order confirmation is built into the application. We all get an email thanking us for the order after we press the submit button. In EDI, the system sends back a confirmation notice that the order was received successfully. You can skip down to item 2 if you only deal with these types of orders.
If orders are received from retail or counter sales you have the opportunity to validate the order directly with the customer. In retail and customer showroom sales, you can physically show the items before entering the order. If items have bar codes, scan the order into order entry and give the customer the product when completed. Pick-up orders should also be validated with the customer before they leave your site. Create a space for customers to open and review the items you have packaged. Ikea is very good at letting customers review boxed product. They provide a side area with box opening tools and space to review these sealed items before leaving the store.
If the order comes in by other means, you need to spend a little more care on transferring that information into your order processing system. Phone and fax orders require human input. When you re-code the information to your order entry system you risk:
- Transposed data from the fax or phone into your order entry screen (dyslexia or just not being careful enough).
- Miss reading of the fax or poor understanding due to language or terminology used by the customer in a phone conversation.
- The customer may be using different product codes than the ones you list in your distribution software system (Manufacture part numbers or other supplier part codes that may or may not resolve correctly).
You will never get the order right all the time – so the order confirmation document is an important process to validate your work. When an order is entered, it should be confirmed in a written form with the customer before it enters your warehouse for shipping. Validate the order with your customer with a PDF, return fax or email text as a check that everything is correct – products, quantities, prices, shipping details and addresses. What good is shipping something if this will ultimately be returned?
2. Warehouse Accountability – I did that work
The time has come to release and pick the order in the warehouse. Here are the common errors that happen in the warehouse picking phase;
- Temporary or new staff pick the wrong items, since they are not failure with your products and bin set-up.
- Staff pick the wrong quantity. They do not understand your unit of measure codes or how many units are in a case or box for each product.
- Staff miss lines on a multi-line pick document.
New staff need to shadow with experience warehouse employees to learn the nuances of products and quantities that they may encounter in the warehouse. Staff should tick-off product lines they have picked and review the order before releasing this to shipping. Have they picked the whole order? Maintaining accountability for warehouse functions helps to identify problems. Warehouse staff should be identified on each order they process.
Some companies use a packing stag to help eliminate the errors that happen from picking. The order is reviewed twice – once from a picker and them as the goods are boxed for shipment, the order is reviewed a second time by the packer. This processes is costly, as your doubling the work in the warehouse. To eliminate this extra step, make picking as easy as possible to minimize mistakes in the warehouse. If your staff are regulars and know the inventory, your likely better to skip this review stag. If you dealing with a large group of temporary warehouse staff (Amazon) or high priced per unit items, a second look at the order may be required.
When using scanners in the warehouse, the system will typically alert staff to missing lines on an order before you release this for shipping. Scanners also support a common EDI function – Advance Shipping Notice. Here the order is scanned into shipping boxes and each box is recorded with the contents This is a detailed process but creates a high degree of accuracy for both you and your customer. If you require this high level of accuracy- consider scanners in the warehouse that are compatible to your warehouse management system.
3. Shipping – One item at a time please
Even when an order was recorded perfectly and picked correctly, shipping can make errors.
- Selecting the default shipping method when the customer paid for express.
- Attaching the wrong shipping label to a package. You then ship out two orders incorrectly and send two customers the wrong order.
- Double ship. The order was reprinted and both picks were shipped.
- Late shipment – product was delayed, so you missed the expected ship date for this order.
Your shipping area needs to be organized and staff manage one order at a time. It is easy for a shipping label to be attached to the wrong box if your getting interrupted. Let staff focus on the task for each individual order and move that out before starting the next shipment.
These are some of the common order processing pitfalls that all of us need to watch for in our operations. Returns are expensive to process. Unhappy customers are even more of an issue when we can not meet their expectations for a perfect order.
Let me know if you seems any of these in your operations and how you have design processes to overcome these pitfalls.
To read more about current trends in Distribution and Warehouse Management techniques, please visit one of the following recent posts;
- ERP Tools to manage your Inventory
- Get your Warehouse Ready for 2015 Sales
- CRM – 5 habits to generate more sales
- Is your business software holding you back?
- Forget about Google’s Car – I want to see these on my Roads.
- Are Order Processing Errors Costing you Money and Customers?
- Yearly Inventory Count – Are you ready?
- Reward Performance Strategy to Drive Warehouse Efficiency
- 5 Techniques to Improve Warehouse Performance
About the author:
Beckard president Dave Savard brings extensive management, business planning, and operational expertise to the company, gained through two decades of public and private sector management experience. Dave’s ability to diagnose client operational problems and provide effective, practical solutions has earned him the enduring loyalty of clients. He is also known for a deep commitment to customer service, ensuring that client needs are not only met but that client priorities are considered in future product enhancements. In his role as company president, Dave holds responsibility for operations, planning and customer service. Dave has a degree in Economics and Law from Carleton University.
Beckard Associates is a full service ERP and Wholesale Distribution Software company providing Accounting, Warehouse Management Systems (WMS) and Customer Relationship Management (CRM) tools to companies across North America. We write blog articles that inform and educate are clients and colleagues. If you would like to learn more, please visit us at beckard.com.
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