Increasing Order Accuracy in Your Fulfillment Center
Scott Hothem • December 16, 2013
A fundamental pillar of a strong fulfillment center is accuracy. Order accuracy is the one tangible, logistical element that ties your company to your consumer. As soon as a customer places an order for your product, whether your fulfillment provider recognizes it or not (and they should), a bond is formed. You’ve spent too much time, money, and effort enticing customers to purchase, just to have the ball dropped when they actually open their wallets. Breaking this trust with your consumer can be absolutely detrimental to your business and your brand. Besides damaging your company’s reputation, it has a significant impact to your margins and bottom line. A study by MHI shows that 39% of retail companies face a key challenge with inaccurate order delivery dates.
Fulfillment accounts for 50-60% of your labor expenses, far and away the most intensive and expensive costs your distribution center will incur. However, the massive significance of fulfillment operations in keeping your customers satisfied more than justifies this steep investment. And as with any investment, keeping tabs on the efficiency of the fulfillment performance is the only way to earn a return and avoid unnecessary delay and expenditures.
Observing your distribution center during a shift can provide a handful of reasons for your poor order accuracy results. In particular, two areas are likely having the greatest impact on your accuracy, or lack thereof. Stocking activity is typically a major component in fulfillment errors. A study by intelligrated.com shows that stocking activity is responsible for nearly a quarter of all order fulfillment mistakes.
Ideally, stocking is done before picking, synchronizing, or slotting. Performing these activities in this particular sequence will reduce the instances of having unavailable merchandise. Further, providing more slots for high-velocity items and separating similar type items from each other are two easy ways to reduce fulfillment errors. According to a Supply Chain Quarterly survey, stocking practices were a leading factor in 76% of companies with accuracy issues.
In addition to stocking activity, picking motions pose a tremendous threat to order accuracy. Creating the most efficient picking motion possible will alleviate many of the mistakes within your supply chain. Items that are difficult to reach or heavier products that are organized incorrectly increase the likelihood of inaccurate picking. Creating distinct zones for different types of products and balancing such zones with the appropriate equipment can reduce these concerns. Optimizing the picking protocol for a mid-sized retailer can improve order accuracy by 34%, as stated in a 2012 case study by Logistics Planning.
Given the urgency and utmost importance to deliver the correct order to your customers, there are proven methods you can put in place to increase your order accuracy. Partnering with a qualified fulfillment provider can be an effective way to enhance your order accuracy and has a direct correlation to your customer service, brand reputation, and bottom line.
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Customers may never know the names of the people receiving inventory, preparing orders, managing fulfillment, or solving problems behind the scenes. They may never see the warehouse at all. Yet every one of those decisions eventually reaches them. That reality makes the relationship between a brand and its 3PL unusually consequential. Fulfillment may happen outside a company's own walls, but the experience it creates still carries the company's name. Accuracy, presentation, responsiveness, and consistency all become part of how customers perceive the brand itself. For Katherine Wroth at Barrett Distribution Centers, one piece of customer feedback captures exactly what that relationship should feel like. “The biggest thing that I hear from clients and brands is they say, ‘I feel like Barrett is an extension of our brand.’ And that's exactly what we want at Barrett.” An Extension Should Be Able to Evolve With You Becoming an extension of a brand requires more than understanding how to fulfill today's orders. Businesses change, sometimes dramatically, and the operation supporting them must be capable of navigating that progression. Katherine points to customers that may begin primarily in direct to consumer fulfillment before expanding into business to business distribution and, eventually, a broader omnichannel model. Each stage introduces different expectations and complexities. The objective is continuity. “They can stay with Barrett instead of having to go to multiple 3PLs.” For a growing company, that continuity can become increasingly valuable. Expansion should open possibilities for a brand, not automatically trigger another search for a fulfillment provider capable of handling the next stage. Ownership Changes How People Approach the Work The idea of acting as an extension of a customer's brand also depends on the people making decisions inside the warehouse. William Johnson describes an ownership mentality that encourages Barrett employees to consider the consequences of those decisions personally. “Everybody in our building runs this as if they're the owner. So, we're always looking at it from a perspective, if this was my money, how would I spend it?” That philosophy becomes more tangible through Barrett's participation in the Great Game of Business. William explains that Barrett uses profit sharing and open book financial practices to engage employees as owners and give them greater visibility into the financial success of the business. The concept is straightforward but meaningful. When people understand how their decisions influence a larger outcome, their work becomes more than a sequence of individual tasks. They gain context for why those decisions matter. That investment extends to professional growth as well. William describes daily huddles and a workplace where employees regularly progress from hourly positions to leads and from leads to supervisors. The People Behind the Operation Matter Culture can sound abstract until you hear from someone who has experienced it firsthand. In the video, Scott Hothem reflects on his own experience at Barrett with a simple observation: “I love it here. I love the family feeling here.” That sense of familiarity carries into how Barrett wants customers to experience the company. Scott describes Barrett as a family owned business with the scale to support growing brands while retaining the personal connection that can disappear inside a much larger organization. “They know they're not getting a faceless 3PL. They're getting a family-owned business that's large enough to grow their business anywhere.” That distinction matters because fulfillment is ultimately performed by people. Technology can improve visibility. Systems can connect sales channels. Processes can create consistency. Scale can provide room for growth. Yet people still make decisions, communicate when circumstances change, and determine how problems are addressed. A 3PL becomes an extension of a brand when those people recognize that the inventory in front of them represents something larger than products sitting inside a warehouse. It represents a company's reputation and, ultimately, the experience promised to its customers. The warehouse may belong to your 3PL. The experience leaving it still belongs to your brand. Looking for a 3PL that takes the time to understand your business? Start a conversation with Barrett Distribution Centers.
Choosing a 3PL often begins with an immediate need. Order volume may be accelerating, warehouse capacity may be narrowing, or the demands of managing fulfillment internally may be consuming time that could be better invested elsewhere in the business. Those pressures can initiate the search, but they should not define its entire scope. A fulfillment partnership has implications that extend well beyond the problems a brand needs to solve today. As the business matures, its distribution strategy may expand, customer expectations may evolve, and an operation that once felt perfectly adequate can become increasingly restrictive. The more consequential question, then, is not simply whether a 3PL can accommodate the business as it exists now. Can it continue supporting the brand as its ambitions become larger? Katherine Wroth at Barrett Distribution Centers sees that distinction as central to building enduring customer relationships. “We really want the clients that are vested in their growth, the ones that are planning to really scale their business.” Growth Has a Way of Redefining What a Brand Needs Some companies begin searching for a 3PL amid explosive growth. Others have successfully operated their own warehouses for years, gradually adding volume and complexity until the infrastructure that once served them well begins constraining what they can pursue next. Neither scenario necessarily indicates that something has gone wrong. Sometimes, the business has simply outgrown the environment that helped it reach this point. That is why Katherine describes Barrett as a “forever 3PL,” a partner intended to remain relevant as the business evolves rather than merely providing a temporary answer to an immediate capacity problem. “We will be there through the growth and help you scale to where you want to be.” At Barrett, longevity matters. Katherine points to relationships spanning five, seven, or even 10 years as the kind of partnerships the company strives to cultivate. Over that amount of time, businesses inevitably change. The value of the relationship lies partly in whether the fulfillment operation has the flexibility and experience to change alongside them. Cost Matters. So Do Timing and Fit. Price will always occupy an important place in a 3PL evaluation. Yet reducing the decision to cost alone can overlook the broader consequences of choosing a fulfillment partner. Katherine emphasizes timing and fit as essential considerations for a lasting relationship. A provider must be appropriate for the business entering the warehouse today, but it should also possess the capabilities to support the business that may emerge several years from now. That perspective becomes especially important for brands approaching a turning point. Moving from self fulfillment to a 3PL is significant. Changing providers again after another period of growth can be equally consequential. Evaluating long-term compatibility from the beginning gives brands an opportunity to think beyond the next shipment, season, or sales milestone. Growth will inevitably reshape a business. New opportunities will emerge, expectations will rise, and fulfillment requirements will become more sophisticated. The right 3PL should not merely accommodate that evolution. It should be prepared to grow through it with you. Looking for a 3PL that takes the time to understand your business? Start a conversation with Barrett Distribution Centers.
October has a way of making the holidays feel suddenly close. Marketing calendars are filling up. Promotions are taking shape. Black Friday and Cyber Monday plans have moved from ideas to actual deadlines, and forecasts are being revisited as brands get a clearer picture of what the final months of the year could bring. Meanwhile, somewhere in the supply chain, holiday inventory is moving too. Some of it may already be sitting in a fulfillment center. Some may be arriving this week. Other products could still be in transit, waiting to be received, or scheduled to arrive much closer to the moment customers begin looking for them. Knowing how much inventory you purchased is one thing. Knowing where it is, when it will arrive, and whether it will be ready when demand arrives is another. Peak Season Starts Before the Orders Do Holiday fulfillment conversations naturally focus on outbound orders. How many orders will come in? How quickly can they ship? What happens if a promotion performs better than expected? Those questions matter, but they begin in the middle of the story. Before an order can leave a fulfillment center, inventory has to get there. It needs to be received, accounted for, stored, and ready to move when customers start buying. During a busy season, that incoming flow of product can be just as important as what is heading out the door. Harrison Smith , Director of Commercial Revenue at Barrett Distribution Centers, looks closely at those patterns when learning about a brand. With roughly 20 years in the 3PL industry, he knows that understanding peak is about more than identifying the busiest sales month. As Harrison puts it, “When do you need to bring your inventory in to service that holiday peak, or is it a summer peak because you sell swimsuits or whatever it might be?” The question is simple, but it changes the conversation. If November is your busiest month, what needs to happen in October? And what needed to happen before that? Where Is Your Inventory Right Now? By October, brands should have more than a holiday sales forecast. They should have a clear picture of the inventory expected to support it. That means understanding what has already arrived, what is still on the way, and whether any incoming products could create pressure as holiday activity increases. This is where averages can become misleading. A brand might know its typical monthly inventory or order volume, but peak rarely behaves like a typical month. Harrison emphasizes the importance of looking deeper into the patterns behind the numbers. “It’s looking at yearly trends, looking at within the year, what does that look like? Do you have those peaks?” For holiday planning, those peaks can happen on both sides of the warehouse. Orders may increase just as large amounts of inventory arrive. Suddenly, the operation is balancing receiving, storage, picking, packing, and shipping during the same critical stretch. Visibility helps everyone understand what is coming before the building gets busy. Give Your 3PL the Full Picture Your 3PL cannot prepare for information it does not have. If a large inventory shipment has moved later than originally expected, communicate it. If a promotion is likely to concentrate demand around certain products, share that information. If this year's assortment or sales strategy looks substantially different from last year's, make sure your fulfillment team knows that too. Harrison describes himself as a “data nerd,” and his approach is rooted in understanding as much of the business as possible. “When I work with brands, I wanna understand everything about the business.” That does not mean brands need to predict every holiday order perfectly. Forecasts change. Promotions surprise people. Products sell differently than expected. The goal is not perfect foresight. It is giving the people responsible for fulfillment enough information to make thoughtful decisions as conditions change. At Barrett, those conversations help our teams understand the rhythm behind a customer's business rather than viewing peak as one large number on a forecast. October Is a Good Time to Ask Better Questions Instead of asking only whether your 3PL is ready for holiday volume, October is a good time to look more closely at the inventory supporting that volume. What has arrived? What is still coming? Are there products tied to major promotions? Has anything changed since the original forecast? Are there unusual inbound shipments your fulfillment team should know about? Those conversations may not be the most exciting part of holiday planning, especially compared with campaigns, product launches, and sales goals. Still, they help create the conditions for all of those plans to work. Because by the time a customer clicks buy , a surprising amount of the work behind that order should already be finished. Your holiday inventory should not simply be on its way. You should know where it is, when it is arriving, and what happens next. Looking for a 3PL that takes the time to understand your business? Tell us where you are today, where you want to go, and what you need from your fulfillment partner. Start a conversation with Barrett Distribution Centers.
