Improving order accuracy is in the spotlight
The cost of getting orders wrong has never been higher. What factors can impact your ability to get it right — or to get it wrong?
After years of concern about supply chain disruptions and delivery delays, supply chain leaders are changing their priorities. Concerns have shifted toward escalating order accuracy, pricing, and labor issues like shortages, turnover, and retention.
Given the rising costs of labor, materials, and services, along with lingering inflation, 2 of those 3 concerns aren’t surprising — but the reasons for increased focus on order accuracy are less obvious.
350 supply chain execs weighed in
Last year, only 16% of supply chain executives were worried about order accuracy; this year, 40% reported it as their top concern, according to a second annual survey of retailers, wholesalers, and 3PL/4PL firms. This survey was led by Deposco and Industry Dive, providing a platform for more than 350 retail and supply chain executives to share their preparations and predictions for peak season.
What’s driving this increased concern about order accuracy? On the surface, getting orders wrong has never been more expensive, as inflation escalates the cost of corrections. Achieving order accuracy requires addressing these 5 concerns.
1. Growing customer expectations
Consumers want more insights into the delivery process: They want to dictate the delivery speed, watch the stages of delivery unfold, and track shipments in real time.
“For example, our customers demand that they not only know when their order has shipped,” explains Michael Johnson, vice president of business consulting at Deposco. “They also want to know that it has been scanned at the regional distribution center when it has left the distribution center, and when it’s out for delivery. This requires a new level of real-time, enterprise-wide visibility through technology, no matter who’s doing the fulfillment — you or a 3PL.”
2. Mistakes due to staff constraints
Labor shortages, turnover, and retention are concerns for 38% of supply chain executives when it comes to peak season. If you can’t keep workers, you must manage a constant cycle of training and onboarding — which opens the door to poor productivity, unfamiliarities, and mistakes.
Bringing new full-time, seasonal, and temporary workers into a busy distribution or fulfillment center environment during peak season can be time-consuming and stressful for everyone involved. To minimize mistakes, ensure your tools, technology, and software platforms are fast and easy to learn and use. You don’t have time to waste on training, onboarding, and custom IT work.
3. Rising supply chain complexity
Each peak season process is complex on its own, but the evolving patterns of peak create even more confusion. The survey results show evidence of peak season becoming less predictable as time goes on. Compared to pre-pandemic levels, peak season operations are now considered longer by 40% of survey respondents. Another 18% say peak season is continuous.
For example, Prime Day brings a new “peak” to retail, which adds further complexity. 75% of supply chain executives now consider this sitewide sale as a peak event. Supply chain leaders expect that manufactured peak sales events like Prime Day will test their supply chains at other times of the year outside of the holiday season.
How retailers handle this complexity varies. The survey data shows there’s no single “correct” approach to handling fulfillment. Some retailers use a 3PL/4PL; others use a combination of in-house, drop shipping and/or a 3PL/4PL. Many others plan to continue to rely on their in-house fulfillment capabilities.
Considering this combination of factors, it’s easy to see why companies are looking for simpler ways to predict and reduce the complexity contributing to order problems.
4. Increased reliance on outsourcing
Concern about order accuracy may also be caused by the new approaches being taken by retailers, wholesalers, and 3PLs/4PLs to manage fulfillment. It’s more hands in the cookie jar without a solid platform to collaborate on inventory and orders effectively.
For example, there’s a steady increase in businesses partnering with third parties for inventory management and fulfillment. With 33% now offloading fulfillment to a 3PL during peak season (up from 7% the previous year) and 11% offloading fulfillment to a 3PL year-round (up from 4%), this may very well be the case.
5. Automation is becoming more widespread
Apprehension about order accuracy could also be connected to the increase in system consolidation and automation deployment. Rolling out new processes, technology, and workflows for the first time can be nerve-wracking.
Deploying more automation is the top strategy being used by supply chain executives to combat labor issues. 55% identify it as their preferred approach (compared to only 11% the previous year).
Labor shortages in transportation and logistics are also driving more than 4 out of 10 respondents (43%) to accelerate technology investments — as opposed to only 11% previously. These investments connect multiple supply chain systems in real time, integrated into other critical solutions like automation, wearables, artificial intelligence (AI), and augmented and virtual reality to reduce mistakes.
WMS and OMS systems improve order accuracy fast
Warehouse management systems (WMS) and order management systems (OMS) focus on scalable, resilient solutions that provide year-round value. They strengthen data visibility and views of performance, which improves decision-making, order accuracy, inventory management, and fulfillment speed.
They also make continuous improvement possible without lots of time, effort, or decision-making required from your team.
How do your preparations for peak season compare to what other retail leaders are doing? Where are you on your WMS/OMS journey? Need to get order mistakes under control, introduce automation quickly, and prepare for omnichannel success?
Explore how high-growth businesses are owning their Peak Season.