EVERETT, Wash.—Distribution centers could be losing an average of nearly $390,000 per year due to mis-picks, according to a recent study.
Conducted by Intermec, Inc., a workflow performance and management firm, the survey of 250 supply chain and distribution managers across the U.S., U.K., France and Germany found the average mis-pick costs about $22, with more than half (52 per cent) of companies reporting a pick rate of less than 97 per cent.
With a new year bringing renewed pressure to boost efficiencies and drive costs down, improving productivity and accuracy is fundamental to improving profit margins, which is why 59 per cent of managers use “The Perfect Order” metric to identify areas for improvement.
A further 19 percent do not even measure the costs of mis-picks in any form, suggesting that the accumulated losses in the supply chain may be even higher.
Some 47 per cent of companies that have recently conducted a workflow process review said picking was a key area where cost savings could be achieved. For those using ‘The Perfect Order’ metric, opportunities for increased savings were clear, with 43 per cent identifying complete shipments as the most profitable.
Highlights from the distribution centre study include: