How to Reduce Warehousing Errors

Warehouse operations are crucial in supply chain management, but they're not immune to errors. These mistakes, whether frequent or rare, can lead to significant consequences in terms of cost and customer satisfaction. From understanding the nature of these errors to exploring the impacts of seasonality, this article aims to provide insights into how to minimize such mishaps.  

Additionally, we'll delve into the role of innovative systems like AutoStore in enhancing warehouse efficiency. Dive in to discover strategies for a more accurate and streamlined warehouse operation.

What is a warehousing error?

A warehousing error can be defined as any discrepancy or mistake that occurs during the warehousing process. This can involve anything from receiving, storage, picking and packing, to the dispatching of goods. Such errors can disrupt the smooth flow of goods, result in financial losses, and even damage a company’s reputation with its customers.

Common types of warehousing errors  

Now that we've defined what these errors are, let's explore the most common types we often encounter:

• Receiving errors: Mistakes made during the process of receiving goods, like incorrect documentation, miscounted items, or receiving damaged goods without proper notation.
• Picking errors: These occur when workers select the wrong item, quantity, or batch for an order.
• Putaway errors: Mistakes made when storing items in the wrong location.  
• Inventory errors: Discrepancies between the actual stock and the recorded inventory, often due to miscounts, theft, or data entry errors.
• Shipping errors: Mistakes during dispatch, like sending goods to the wrong address, sending the wrong quantity, or forgetting to include certain items.  
• Incorrect inventory count: Discrepancies between the recorded stock numbers and the actual physical inventory in the warehouse.
• Damage to product: Goods becoming compromised due to mishandling, environmental factors, or equipment malfunction.  

Technological vs. human errors

In warehousing, the distinction between technological and human errors is pivotal. Technological errors often arise from system malfunctions, where warehouse management systems or integrated software might glitch, leading to misinformation. Additionally, scanning equipment might occasionally misread barcodes, causing discrepancies in various tasks.  

On the other hand, human errors encompass a wider range of mistakes. Picking errors, for instance, can occur when workers choose items from the wrong location, navigate mixed SKU locations poorly, or even pick the correct SKU but in the wrong size or color. Putaway errors involve misplacing fresh inventory, especially when barcode verification isn't employed, which can lead to further SKU confusion. Mistakes in inventory counting, such as recording 10 items when only 8 exist, are also typical human errors.  

Lastly, damage to products, though occasionally caused by machinery, is usually a result of human mishandling. Balancing and integrating technology with well-trained personnel can significantly reduce the occurrence of both types of errors.  

To put these errors into perspective, let’s consider a real-world example that warehouse managers might relate to.

Error example: The sneaker switch-up  

Imagine an online shoe store. Lisa, from California, orders a pair of white sneakers in size 8. At the same time, John, from New York, orders a pair of black boots in size 10.

In the warehouse:  

Picking Error: The picker, working quickly to meet his targets, mistakenly grabs a size 10 white sneaker for Lisa and a size 8 black boot for John. Both are packed and sent out.

Inbounding Error (for context): Earlier that week, a new stock of white sneakers arrived at the warehouse. During the inbound process, the new stock was mistakenly placed in the storage location meant for black boots. This misplacement contributed to the picker's error when he went to the wrong location, thinking he was retrieving the right item.  

A few days later, Lisa opens her package, expecting her white sneakers, and finds the black boots. John, on the other hand, is surprised to find sneakers when he was eagerly waiting for his boots. Both customers are dissatisfied, leading to returns, added shipping costs, and potential damage to the store's reputation.

This example underscores the importance of precision in specific warehouse departments, especially in the realms of Inbounding and Picking.

Learn more about how to improve order accuracy and how to avoid inaccuracy.

Specific departments prone to errors: Inbound & picking  

Warehouses are complex ecosystems where precision is paramount. While every department plays a crucial role in the smooth functioning of the entire operation, certain areas are particularly susceptible to mistakes due to the nature of their tasks. Two such departments are Inbounding and Picking.

Inbounding (Receiving Department)  

Nature of Task: This department is responsible for the initial acceptance of goods into the warehouse. It involves checking shipments against purchase orders, inspecting for damage, and correctly cataloging items.

Common Errors: The complexities associated with verifying large shipments can lead to miscounts, missed damaged goods, or even accepting items that weren't ordered. Errors at this stage can set a wrong tone for the rest of the warehousing process, as a mistake in the initial count or categorization can lead to inventory inaccuracies downstream.

Implications: Mistakes in this department can have cascading effects, resulting in stockouts, overstocking, or even dispatching incorrect items to customers.  

Picking Department

Nature of Task: Picking is all about retrieving the right products from storage areas to fulfill customer orders. It requires navigating large warehouse spaces, sometimes under time pressure, to locate and gather specific items.

Common Errors: Given the significant human intervention, there's a higher probability of selecting the wrong item, wrong quantity, or wrong batch. This is especially true in larger warehouses or those without sophisticated picking systems.

Implications: Incorrect picking can directly impact order accuracy. This leads to returns, increased operational costs, and potential customer dissatisfaction.

The precision and efficiency of both the Inbounding and Picking departments are vital for the overall success of warehouse operations. While they are prone to errors due to the intricate nature of their tasks, with adequate training, clear processes, and the right technology, these errors can be minimized.  

While these departmental errors present direct operational challenges, they also have broader implications for businesses.

Most critical warehouse errors & business consequences  

Warehouse errors can ripple outwards, leading to significant business consequences. From financial setbacks to reputational damage, these ramifications not only affect the bottom line but can also impact long-term customer trust and brand credibility. Let's delve into the specific consequences arising from common warehousing mistakes.

1. Picking errors  

Magnitude of the Problem: The average retail pick error rate stands at a substantial 2-4%. Picking errors can range from shipping incorrect quantities to sending the wrong product entirely.

Business Consequences: According to a study by PwC, one-third of customers will abandon a brand after just one unsatisfactory experience. A picking error not only taints the customer's experience but also invokes additional logistics. The customer may need to return the incorrect item, await the replacement, or entirely cancel the order if the product was time-sensitive. Furthermore, the likelihood of such a customer placing a repeat order diminishes.  

2. Financial implications of picking errors

Magnitude of the Problem: The average cost tied to a pick error is estimated to be between £30-50.  

Breakdown of Costs:

• Original picking: The initial expense of picking the wrong item.
• Initial shipment: The cost of shipping the incorrect product.
• Return request processing: When a customer identifies an error, there might be a need for manual intervention to process the return.
• Return shipment: The expense of returning the product, which might sometimes fall on the customer.
• Return processing: This encompasses the inspection of the returned item, restocking, and any associated administrative tasks.
• Replacement picking: The cost to pick the correct item as a replacement.
• Replacement shipment: The expense of sending out the correct product to the customer.

3. Damage to Brand Reputation  

Magnitude of the Problem: In the age of social media and online reviews, one customer's bad experience can quickly go viral, potentially tarnishing the brand's image.

Business Consequences: Once the brand's reputation is damaged, winning back trust can be costly and time-consuming. Negative publicity may lead to lost sales opportunities, both immediately and in the future.  

4. Additional Challenges

While picking errors are significant, warehouses also grapple with other challenges. These include inventory inaccuracies, inadequate storage space, and inefficiencies in product retrieval, each potentially adding to operational costs and reduced customer satisfaction.

The ripple effect of warehouse errors extends beyond immediate financial implications and can significantly disrupt multiple facets of a business. As such, addressing and preempting these challenges should be a top priority for any organization aiming for long-term sustainability and growth.  

Beyond the day-to-day operations, external factors, such as seasonal demands, can exacerbate these error rates. Let’s delve into how.

How do seasonality and peak periods impact error rates?  

Seasonality and peak periods often lead to a surge in demand in the retail and supply chain sectors. This heightened demand, linked to events like holidays or promotions, brings about unique challenges for warehouses. With the sudden influx of orders, many warehouses resort to hiring additional staff. However, rapid onboarding can lead to issues. In some instances, pick accuracy has been observed to drop dramatically, sometimes to as low as 50%.  

This decrease is often due to new staff's unfamiliarity with warehouse operations and the pressure to process orders quickly. Yet, modern solutions like the AutoStore offer a way forward. With such technology, a new picker can be trained and ready in just 15 minutes, minimizing errors even during peak times. In essence, while peak periods pose challenges for warehouse accuracy, technological advancements provide effective countermeasures to maintain efficiency.

As we consider these challenges, it’s clear that modern technology offers promising solutions for error reduction.  

Reducing Warehouse Errors with Modern Technologies

Warehouses, as critical components of the supply chain, require impeccable efficiency and accuracy. The introduction of technology has provided tools to significantly reduce mistakes, ensuring smoother operations and happier customers. A foundational technology in this realm is barcode scanning. By implementing a simple barcode scan for every pick, warehouses can drastically minimize the chances of sending out the wrong item. Such a system ensures that each product is verified before it leaves the warehouse, thereby streamlining the picking process.  

Yet, the technological evolution doesn't stop at barcodes. Advanced Goods-to-Person technologies, like AutoStore, have emerged as game-changers. These systems revolutionize the picking process by bringing the right products directly to the warehouse worker, further ensuring accuracy and efficiency.

Among the myriad of technologies available, AutoStore stands out as a particularly effective solution.  

The AutoStore Advantage in Error Reduction

AutoStore stands out as a leading solution in the warehousing sector, especially when discussing error prevention and reduction. Its AutoStore’s remarkable pick accuracy rate of 99.9% stands in stark contrast to the retail average of 96-98%. When considering that each warehouse mistake could cost between £30-50, the economic benefits of using AutoStore become evident.

But what sets AutoStore apart from other technological solutions? The answer lies in its precision. AutoStore delivers a single SKU bin directly to the operator, with a software user interface that specifies to the picker exactly what to pick and how much to pick. This approach eliminates potential confusion or mispicks, ensuring that the worker gets the exact item needed. The only margin for error arises in unit quantity, but such mistakes are minimal, explaining why the accuracy rate is just shy of 100%. In comparison, other technologies like barcode scanning and voice picking still leave room for human error, which can lead to occasional mistakes.

Moreover, during peak times, AutoStore proves to be invaluable. It maintains its impressive 99.9% pick accuracy regardless of whether the worker is a seasoned expert or a newcomer. This feature is particularly beneficial for warehouses that hire agency staff or seasonal workers during high-demand periods. Not only does this mean that businesses can efficiently handle the surge in orders during peak seasons, but they can also acquire new customers due to their exceptional service and retain them throughout the year.  

Summarized:

• High accuracy: AutoStore boasts a remarkable 99.9% pick accuracy rate, surpassing the retail average of 96-98%.
• Precision in delivery: The system delivers a single SKU bin to operators, nearly eliminating mispicks.
• Reliability during peak times: Maintains its high accuracy irrespective of the worker's experience, making it ideal for peak seasons.
• Customer retention: The consistent efficiency and accuracy attract new customers during peak periods and retain them with excellent service year-round.  

In conclusion, while there are several technologies available to minimize warehouse errors, AutoStore, with its unparalleled accuracy and efficiency, especially during peak times, stands out as a prime solution for modern warehouses aiming for perfection.

Conclusion  

In today's rapidly evolving commerce landscape, the warehouse stands as a cornerstone of supply chain efficiency. As we've seen, even minor errors within these hubs can lead to far-reaching consequences, affecting both operations and the business's bottom line. Whether these errors arise from human lapses or technological glitches, their impacts during peak seasons can be particularly devastating, revealing the urgency of addressing them proactively.

Modern technologies, such as AutoStore, offer a solution to this challenge. Not only does AutoStore minimize the room for mistakes by automating various processes, but system also boost operational efficiency, allowing businesses to keep pace with increasing consumer demands. As supply chains continue to grow in complexity and importance, integrating such advanced solutions becomes less of an option and more of an imperative. For warehouses aiming for the zenith of accuracy and productivity, embracing these technological marvels will undoubtedly pave the way for a future marked by reduced errors, satisfied customers, and bolstered business outcomes.  

Get in touch with us to find out how AutoStore can minimize errors in your warehouse operations.

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FAQ

What are the common problems in a warehouse?

Common problems in a warehouse include:  

• Receiving errors: Mistakes such as incorrect documentation, miscounted items, or improperly noted damaged goods.
• Picking errors: Situations where workers select the wrong item, quantity, or batch for an order.
• Putaway errors: Mistakes made when storing items in the wrong location.
• Inventory errors: Discrepancies between the actual stock and the recorded inventory, often due to miscounts, theft, or data entry errors.
• Shipping errors: Such as sending goods to the wrong address, sending the wrong quantity, or forgetting to include certain items.

What are the human errors in warehousing?

Human errors in warehousing encompass a wide range of mistakes, including:  

• Picking the wrong item or quantity.
• Misplacing fresh inventory during putaway, especially when barcode verification isn't employed.
• Navigating mixed SKU locations poorly or picking the correct SKU but in the wrong size or color.
• Mistakes in inventory counting, such as recording 10 items when only 8 exist.
• Mishandling goods, leading to damage.

How do you fix picking errors in a warehouse?  

To rectify picking errors in a warehouse:

• Implement barcode scanning to ensure every picked item matches the order.
• Provide regular training and refresher courses for pickers.
• Employ advanced Goods-to-Person technologies, like AutoStore, which bring the right products directly to warehouse workers, ensuring accuracy.
• Conduct regular audits and spot checks to identify and address errors promptly.
• Use clear signage and organized storage to simplify the picking process.  

What are the 3 key issues in considering a warehouse environment?

When considering a warehouse environment, the three key issues are:  

• Safety: Ensuring the warehouse is free from hazards and that there are measures in place to protect workers, such as safe equipment operation training and clear signage.
• Efficiency: Streamlining operations to ensure quick and accurate processing of goods, from receiving to shipping. This includes using the right technologies and methodologies to optimize workflows.
• Adaptability: The ability for the warehouse to adapt to changing demands or volumes, ensuring scalability and flexibility in operations, especially during peak seasons or unexpected disruptions.