The Importance of Warehouse Automation

September 25th 2013 18:41:21 PM

Mistakes happen to the best of us. There is not a business in existence that has not – somewhere along the line – made an error or mistake. As you more than likely know, mistakes can be costly. Whether it’s shipping the wrong product to the wrong person or simply sending them the wrong invoice, mistakes can be costly.

Picking mistakes (or ‘mispicks’) are no exception. These errors often occur when an item or product is incorrectly slotted. If the item is in the wrong place, the likelihood of the wrong product being sent to the wrong customer is high. While it is a common occurrence among businesses and has even come to be expected, picking mistakes are by no means cheap. In fact, a recent survey found that picking mistakes cost distribution centers an average of $390,000 a year. That’s a lot of money!

If you are currently running a warehouse, the above number should come as no surprise. All warehouse managers know that picking mistakes have become a huge issue in today’s warehouse management. As the supply chain (and supply chain management) has grown more complex and more dependent on real-time shipping, every mistake has been magnified. Errors are more costly than ever before and, as a result, companies need to invest in a solution to decrease errors and improve picking efficiency.

How Do Picking Mistakes Affect My Bottom-Line?
It is important to consider the logistics of a picking mistake and its accompanying costs – in labor, efficiency, shipping, brand value, and lost sales.

First you have the original cost, the cost it takes to pick the item, package the item, and ship it out to the customer. Then – once the customer realizes the item is incorrect – you have to pay to have the item repackaged and reshipped back to the warehouse and pick the (correct) item all over again. This can slow down the picking process for other orders that have since arrived, not to mention the customer’s frustration over the inconvenience and your lost reputation.

A recent study of over 250 supply chain, warehouse, and distribution managers estimated the cost of the average picking mistake to be $22 per incident. Depending on the item and situation, this cost can quickly rise. What’s even more concerning is the fact that 19% of the companies surveyed reported that they do not currently measure their picking mistakes in any form, meaning the cost of picking mistakes could be even higher than the above estimate.
In order to truly protect your company from the high costs of picking mistakes, you need a way to measure these mistakes when they happen and prevent them in the first place.

That’s where warehouse automation comes into the picture.

Warehouse automation software, such as barcoding solutions or mobile applications, can decrease the number of costly errors that occur during the picking process, as well as count and measure picking mistakes so you have a better idea of what your mistakes are truly costing you. Warehouse automation software, such as MAS 90 barcoding, MAS 200 barcoding, and MAS 500 barcoding software (now known as Sage 100 barcoding / Sage 500 barcoding software), has built-in validation features so you know that the right product is being shipped to the right customer every time. With warehouse automation software, accuracy will not be just a desire in your warehouse operations; it will become the rule.

If you would like to learn more about warehouse automation software or would like to see how much picking mistakes are truly costing your company, contact us today. Our warehouse experts will guide you through the automation process so you can begin building a more accurate warehouse.

Do you have an idea of how much picking errors are costing your company? If so, have you tried to reduce these costs? Feel free to share your suggestions in the comments section below.