Shipping accuracy to some companies is an oxymoron and to others a solid part of their business. So what causes some to struggle and others to excel? The accuracy of their pick and verification process. Lets look a little closer.
I was talking with a prospect recently who shared with me that they shipped an average of 600 orders per day and 800 boxes. He was very proud to tell me that they were 98.6% accurate on their shipping. Now 98.6% sounds pretty good (especially in a busy disorganized paper driven warehouse) when you think of the fact that they ship 600 orders per day right. I pointed out to him that means that about 8 orders go out wrong every day. Industry statistics show it costs $200.00 to fix each mis-shipped order. So if you do the math that’s $1600.00 per day for this prospect to cover the cost of their mistakes. If you look at that over the course of one year the total is $83,200. That’s a Problem.
A WMS will virtually eliminate the potential for making these mistakes. By providing an accurate way to pick orders by scanning the barcodes and verifying the product being picked is correct you gain tremendous accuracy. By using a WMS to consolidate orders you can send fewer boxes and save shipping costs. By creating efficient pick paths and picking processes accuracy is increased dramatically. Many companies find they can eliminate costly, time stealing check processes once a WMS has been implementing without increasing mistakes. If the shipping process is integrated into the WMS shipping accuracy is improved and much more efficient.
Eliminating mistakes that go out the door to your customers will offset a large portion of the initial investment in a warehouse Management system like Accellos One Warehouse. To learn more about how A1W can help a business be more profitable check out our dedicated website http://www.warehouse-management-systems-us.com/wp-admin/post-new.php.
In my last post (which I admit was a while ago) I outlined four simple ways a WMS solution can be paid for. In this post I will discuss the first way, reduced stock.
It may seem obvious that if you reduce your stock levels you would probably save money. But how to do this without causing disruption to fill rates and customer service is a key issue. With real-time and online data collection that a WMS like Accellos One Warehouse provides, inventory accuracy can be drastically improved. This leads to a significant improvement in stock location, quantity and lot/serial number accuracy, as well as reduced “buffer” or “safety stock” levels. If you reduce your inventory value while maintaining adequate stock levels to meet order demand you can save a tremendous amount of money and in addition reduce carrying costs as well.
Lets take a look at a simple example. Let’s say you carry 5,000,000 dollars of inventory. And you find a way to reduce that by 4% to 6% Industry average range when implementing a WMS) you could save $200,00 to $300,000. Carrying cost range from 15% to 25% so if yours is say 20% you will pocket $40,000 to $60,000 dollars. This will go a very long way in helping you invest in a system that will produce for you these kind of results.
In my next post I will discuss how reducing or reallocating labor will help you pay for a WMS solution. stay tuned!!
This New Jersey based stocking distributor selected warehousing technology to streamline operations which resulted in
- A near doubling of outbound shipments
- A reduction in labor expenses
- The elimination of paper documentation,
- Plus an increase in both improvements to order accuracy and customer service.
By choosing a scalable and flexible real-time warehouse management system, Accellos One WMS accomplished this through the use of an automated, paper-free process and radio frequency (RF) communications. With these robust technologies, WMS accurately tracks stock into, out of, and within warehouses-streamlining and verifying processes with each movement.
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