Welcome back to our peak-season performance series! Earlier, we discussed labor management strategies and the ROI of acquiring new tech. Today we wrap up with some insights to help you improve order accuracy.
Why 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 in 2023? On the surface, the cost of getting orders wrong has never been higher as inflation escalates the cost of corrections. Achieving order accuracy requires addressing these five 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 are demanding that they not only know when their order has shipped but also 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,” explains Michael Johnson, vice president of business consulting at Deposco.
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 2023. If you can’t keep workers, then 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, make sure 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 further adds to complexity as 75% of supply chain executives now consider this sitewide sale 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 and the survey data shows that 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 own in-house fulfillment capabilities.
When you consider this combination of factors, it’s easy to see why companies are looking for simpler ways to predict and reduce the complexity that is contributing to order problems.
4. Increased reliance on outsourcing
Concern about order accuracy may also be caused by the new approaches that retailers, wholesalers and 3PLs/4PLs are taking to manage fulfillment – i.e., 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 the number of businesses partnering with third parties to complete inventory management and fulfillment. With 33% now offloading fulfillment to a 3PL during peak season (up from 7% in 2022) and 11% offloading fulfillment to a 3PL year-round (up from 4% in 2022), 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 this year. Rolling out new processes, technology and workflows for the first time can be nerve-wracking.
Deploying more automation is the top strategy that supply chain executives plan to use in 2023 to combat labor issues, with 55% identifying it as their preferred approach (compared to only 11% in 2022).
Labor shortages in transportation and logistics are also driving more than four out of 10 respondents (43%) to accelerate technology investments (as opposed to only 11% last year). 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? Download the full research report to learn more about peak season priorities, concerns, challenges, and technologies in 2023.