In the dynamic world of logistics and supply chain management, order accuracy is a critical metric that can make or break a business. At SEKO, we understand the importance of this metric and strive for excellence in order accuracy. This commitment is not just a strategic advantage but a necessity in our quest to provide seamless, efficient, and reliable logistics solutions.

 

WHAT IS ORDER ACCURACY?

Before we begin, it’s important to understand exactly what order accuracy is.

To put it simply, order accuracy is the percentage of ecommerce orders that are shipped to the customer without any errors. Order accuracy errors could be a misshipment, wrong product picking, or where the incorrect product quantity is picked.

 

HOW DO YOU MEASURE ORDER ACCURACY?

There are a number of ways to measure order accuracy. This includes:

  • Measuring the percentage of accurate orders - To find this measurement you simply divide the number of accurately fulfilled orders by the total number of orders received. Multiply by 100 to find the percentage.

  • Measuring the quantities - This measurement should reflect the quantities ordered and delivered accurately.

  • Measuring the specifications - You can find this measurement by checking all unique characteristics of an order are accurate. Characteristics could be colour, size etc.

  • Measuring the Error Rate - Measuring the error rate is very important, as it highlights potential improvement areas. Measuring error rates allows you to be more targeted, so you can look towards key points in the fulfilment process like picking or shipping to see where improvements can be made.

  • Measuring the line item accuracy - To find this measurement, review how many items within an order are in the correct order, quantity, and specification.

  • Measuring returns - Measure how many products are returned, and what accompanying information says about that return.

 

THE IMPORTANCE AND BENEFITS OF ORDER ACCURACY FOR BUSINESSES

Order accuracy is the backbone of any logistics operation. It is the measure of how accurately a company fulfills an order compared to the original customer request. This metric is crucial because it directly impacts customer satisfaction, operational efficiency, and ultimately, the bottom line.

 

COST REDUCTION

When orders aren’t completed accurately, it may lead to other expenses like returns processing, inventory restocking, and reordering materials.

Returned products also risk not being in a good state for resale. When products can’t be resold, revenue is lost, wastage is increased, and there will be a cost in replacing the inventory stock.

According to Optoro’s retailers guide, returns can cost businesses around 66% of the item's original price, even if it is returned in good condition.

 

WASTE ELIMINATION

Eliminating waste is vital for maintaining an efficient service, and maintaining order accuracy can help in a number of ways.

 

LESS WASTAGE IN TRANSPORTATION

If you can use order accuracy measurements to get the most accurate orders possible, you can reduce wastage on transportation used for returns and rectifying incorrect orders.

 

LESS TIME WASTED ON REWORKING

It can be common for defective products to make it through the warehouse or into the fulfilment process. Accurate order measurement can help to cut back on these issues as defective products will be picked up earlier, resulting in less time wasted on reworking the same order.

 

LESS WASTAGE IN INVENTORY

If you don’t accurately measure your orders, it may be more difficult to understand what is available in the inventory. This can lead to the unnecessary production of items or overstocking.

 

IMPROVED OPERATIONAL EFFICIENCY

If you aren’t properly measuring your orders, you could harm your overall operational efficiency. This boils down to staff needing to rework orders when a defect or quantity issue isn’t picked up or accounted for early in the fulfilment process. This can see time wasted and money lost unnecessarily.

 

IMPROVED CUSTOMER SATISFACTION

A strong reputation is the lifeblood of many businesses, but it requires consistent order accuracy measuring to ensure it remains positive. Even a few poorly fulfilled orders can lead to an overall negative sentiment, potentially losing orders.

A report from Heinz Marketing notes that 9 out of 10 buyers are more likely to purchase a product after reading a positive review, so ensuring those positive reviews keep rolling is crucial.

 

FIND KEY IMPROVEMENT OPPORTUNITIES

There are many opportunities to improve operational efficiencies through order measurement. Accurate order measurement can help to pull up everything from warehouse stock placement issues to bottlenecking in the fulfilment chain.

It can also pinpoint issues with suppliers providing the correct quantity of products, the speed of that supplier’s delivery, or quality issues with their product.

 

IMPROVING ORDER-TO-CASH TIMES

Ultimately, order accuracy allows you to get from order placement to money in the bank as soon as possible.

If you have issues with order accuracy, you will get slowed down by delayed payments (particularly in B2B), more money spent on invoice collection and more.

Processes may also be held up by refunds or the issuing of credit notes, which can slow down the process, wasting precious time and money.

 

ORDER INACCURACY IS INCREDIBLY HARMFUL

On the flip side, order inaccuracies can have severe consequences, rippling through various aspects of a business. They can lead to increased costs due to returns and rework, damage to the company's reputation, and loss of customers. In the worst-case scenario, order inaccuracies can even lead to legal issues if they result in non-compliance with regulations or contractual obligations.

 

WHAT ARE THE CONSEQUENCES OF ORDER INACCURACIES FOR BUSINESSES? 

Order inaccuracies can range from minor inconveniences to major financial losses. Here are some of the potential consequences of order inaccuracy for businesses:

 

WRONG PRODUCT DELIVERED

An inaccurate order can result in a customer receiving the wrong product. This not only leads to customer dissatisfaction but also triggers a chain of events that can be costly for businesses. The returned product needs to be processed, which involves additional shipping and handling costs. If the product is damaged or cannot be resold, the loss is even greater.

Furthermore, the process of correcting the order, including picking, packing, and shipping the correct product, essentially doubles the cost of fulfilling that order. This doesn't even take into account the potential loss of future business from a dissatisfied customer, which can be significant given the lifetime value of a customer.

 

INVENTORY IMBALANCES

On a larger scale, order inaccuracies can lead to inventory imbalances, causing out-of-stocks or overstock, both of which can be costly for businesses. 

Out-of-stock situations can result in lost sales and disappointed customers who may turn to competitors to meet their needs. Overstocks, on the other hand, tie up capital in excess inventory and can lead to increased storage costs. 

If the overstocked items are perishable or become obsolete, they may have to be sold at a discount or written off entirely, leading to further losses.

 

DAMAGED REPUTATION

Moreover, order inaccuracies can damage a company's reputation. In today's digital age, customers often share their experiences online, and a single negative review can reach a large audience. 

A reputation for poor order accuracy can make it difficult to attract new customers and retain existing ones. In the most severe cases, order inaccuracies can lead to legal issues. This is particularly true for businesses that deal with regulated products or operate in highly regulated industries. 

For example, shipping the wrong product could result in non-compliance with safety regulations, leading to fines or other legal penalties.

 

FACTORS CONTRIBUTING TO ORDER INACCURACIES

Several factors can contribute to order inaccuracies. Understanding these factors is the first step towards improving order accuracy.

 

HUMAN ERROR

Human error can occur at any stage of the order fulfilment process, from data entry to picking and packing.

 

SYSTEM ERRORS

System errors can result from software glitches or data synchronisation issues between different systems. 

 

POOR INVENTORY MANAGEMENT

Poor inventory management can lead to stockouts or overstocks, both of which can result in order inaccuracies. 

 

LACK OF TRAINING

Lack of proper training can result in employees making mistakes or not following established procedures.

 

THE BIGGEST CHALLENGES TO ORDER ACCURACY

 

DISCONNECTED SALES CHANNELS

It’s common now for businesses to sell products using multiple channels. These channels could include simple emails, an ecommerce platform, or a sales representative.

While it is great to have options available, if each option needs to be accurately reflected for the fulfilment stage, it can be very difficult to maintain order accuracy.

Businesses that use multichannel sales techniques should look into ways to share data from all sources with the highest level of accuracy, this could be through modern ERP and WMS systems.

 

INEFFECTIVE ROUTE PLANNING

For many businesses, logistics, and route planning are one of the most complex problems to solve, which is why many businesses lean on freight forwarding services. 

Freight forwarding services work ensures that much of the manual route planning is removed from the process, leaning on modern software to ensure that shipments are reliable and consistent.

Without effective route planning, you may run into order accuracy issues through late deliveries, and your customers may get frustrated at inconsistencies in delivery dates. This may then push them towards a new vendor that can better meet the needs of their supply chain.

 

INADEQUATE TECHNOLOGY

If warehouses aren’t using modern technology like WMS systems, they put themselves at a distinct disadvantage. 

WMS systems allow warehouses the ability to merge hardware and software to use tools like barcode scanners to quickly and accurately log inventory in and out.

Systems like configure, price, quote (CPQ) also help to streamline the sales to fulfilment through a templated process, which avoids miscommunication issues.

Beyond warehouse management, technology should also be there to facilitate the best possible user experience. User experience can be improved by ensuring that procedures are in place to ensure that issues like out-of-stock products on a website don’t frustrate the user.

It is worth noting that order accuracy can still be an issue with modern technology. When using WMS or any other systems, always ensure that data integrity is maintained, or risk issues like duplicated orders.

 

COMPLEX ORDERS

Order complexity is one of the biggest challenges for maintaining order accuracy. If you consider the many factors that go into a B2B sales order, for instance: 

  • Custom pricing

  • Shipping options

  • Payment terms

  • Discounts

  • Delivery dates

If these elements can’t be effectively passed along to fulfilment, maintaining order accuracy can be exceptionally difficult. Many businesses still lean on manual data entry to try to counter this, but it can make the issue worse.

 

PACKAGING AND LABELLING NOT FIT FOR PURPOSE

Companies should aim to keep packaging clear and concise alongside their branding.

If the order is not adequately packaged and labelled, it is much easier for it to go to the wrong address or simply be sent back. This then incurs further postage or shipping fees, which can add up quickly if the problem is consistent.

On top of postage and shipping fees, orders that haven’t arrived due to poor packaging or labelling create a poor user experience, which can be reflected in reviews and on social media, damaging your brand.

 

MANUAL ORDER PROCESSES

Businesses that process high volumes of orders manually are bound to run into order accuracy issues. 

As your business continues to grow, the accuracy rate will continue to drop, as manual order processing continues. This is because accurate manual order processing does not scale particularly well without some level of automation.

 

UNDERSTANDING ORDER ACCURACY EXCELLENCE

Order accuracy excellence is the pursuit of near-perfect order accuracy rates. It involves implementing strategies and practices that minimize the chances of errors occurring during the order fulfillment process. Businesses that strive for order accuracy excellence understand the importance of this metric and are committed to continuous improvement in this area.

 

IMPROVING ORDER ACCURACY THROUGH EFFICIENT INVENTORY MANAGEMENT

One of the most effective ways to improve order accuracy is through efficient inventory management. This involves maintaining accurate records of inventory levels, implementing effective stock control measures, and using technology to automate and streamline inventory management processes.

Accurate inventory records ensure that the information used to fulfill orders is correct. Effective stock control measures, such as regular stock counts and reorder point systems, can help prevent stockouts and overstocks. Technology can automate many inventory management tasks, reducing the chances of human error and increasing efficiency.

 

ORDER ACCURACY BEST PRACTICES

There are many best practices to look to with order accuracy. Key best practices include:

  • Reviewing and analysing data at regular intervals. Analysis allows for issues to be picked up and resolved quickly.

  • Ensure transparent communication is available between all parties. Transparent communication is key if issues are holding back orders. This allows other parties to adapt accordingly, and may make the difference between losing a customer and keeping them on.

  • Analyse each part of the process chain, from sales to fulfilment. This allows you to find bottlenecks and other issues that may cause problems with order accuracy.

  • Use systems like ERP, WMS and CPQ to ensure data is processed accurately and consistently.

  • Blend modern hardware and software like barcode scanners to ensure quick and accurate stocktaking and picking.

  • Employee training is key in ensuring that each of the above best practices is approached in the best possible way. Make sure to invest in your teams so they understand how to avoid order accuracy problems and can assess issues when spotted.

 

THE ROLE OF TECHNOLOGY IN ACHIEVING ORDER ACCURACY EXCELLENCE

In today's digital age, technology plays a crucial role in achieving order accuracy excellence. Advanced logistics software can automate various aspects of the order fulfilment process, reducing the chances of human error. 

Real-time inventory tracking systems can provide accurate and up-to-date information about inventory levels, helping to prevent stockouts and overstocks.

 

HOW CAN SEKO HELP?

At SEKO, we leverage cutting-edge technology to provide our clients with accurate, efficient, and reliable logistics solutions. Our IT solutions are designed to provide a seamless flow of information, giving our clients true supply chain visibility. 

This visibility allows our clients to monitor their orders in real-time, ensuring that any issues can be identified and resolved quickly. Our systems also provide detailed reporting and analytics, enabling our clients to monitor their order accuracy rates and identify areas for improvement.

 

KEEP ORDER ACCURACY A HIGH PRIORITY WITH SEKO

In conclusion, order accuracy is a critical metric in the logistics industry, and achieving excellence in this area can provide a significant competitive advantage. At SEKO, we are committed to providing our clients with the highest levels of order accuracy, leveraging our expertise, innovative solutions, and advanced technology.

If you're looking for a logistics partner that values order accuracy as much as you do, contact us today. We'd be delighted to discuss how we can help you achieve order accuracy excellence. We understand that every business is unique, and we offer creative, configured solutions tailored to your specific needs. With our hands-on service and support, personal relationships, responsiveness and reliability, flexibility and consistency, we are confident that we can help you achieve your logistics goals.