In October 2012, a survey of 250 supply chain and distribution managers across the United States, United Kingdom, France and Germany—conducted by research company Vanson Bourne—found “distribution centers are losing an average of nearly $390,000 per year due to mis-picks.
The cost of a picking mistake includes not only the cost of the item, but also “the expenses associated with shipping the item back, processing it upon receipt, returning it to stock, and loss of customer satisfaction.
“Mis-Picks Cost Businesses Nearly $390,000 Per Year According to Intermec Study,” accessed January 4, 2014, www.intermec.com/about_us/newsroom/press_releases/2013‐01‐21‐Mis‐Picks‐Cost‐Businesses.aspx
Further time is lost in correcting the mistake by picking, packing and shipping the correct item back to the customer.
Hannah Kain, “Simple Fulfillment Errors Will Affect the Bottom Line,” accessed January 5, 2014, http://www.alom.com/resources/focus.asp?file=002.inc .
An estimated 35% of facilities experience ongoing mis-pick rates of 1% or more. Although 1% sounds like a slim margin for improvement, it adds up quickly.