The High Cost of Picking Errors and Why Inventory Accuracy Matters
No human, business or entity is exempt from making mistakes; they happen to the best of us. Whether you are new to the industry or a seasoned pro, you can most likely recall a time you yourself or your business made an error or mistake. How significant was that error? Was it costly, or did it have an impact on other areas of the organization?
Whether it is shipping the wrong product to a customer or simply sending them an invoice for an item they did not order, errors can be costly to your business. While mistakes and errors are certainly a fact of life, it is important for businesses to take certain precautions and prevent as many mistakes from occurring as possible. One area that we encourage our customers to focus their error prevention on is the area of order fulfillment.
How Much are Errors Really Costing Your Company?
Errors can occur easily during the order fulfillment process. When an item or product is incorrectly slotted or labeled, the likelihood of that product being sent to the wrong customer is high. These mistakes can be costly to the business, costing the average company a total of $390,000 a year. That is a lot of money!
If you are currently running a warehouse operation, this number may not come as a surprise to you. You most likely have firsthand knowledge on the high costs of inventory errors and – as a result – have started investigating ways to protect your company’s bottom line. Before we help you improve your inventory accuracy, you need to have a clear picture of the implications inventory errors have on your business. A recent study of over 250 businesses estimated the cost of the average picking mistake to be $22 per incident. Depending on the item and situation, this cost can quickly rise. What’s even more concerning, however, is the fact that 19% of the companies surveyed reported that they do not currently measure their picking mistakes in any form, meaning they could be experiencing an even higher number of picking-related errors and related costs.
Improving Inventory Accuracy and Decreasing Costs with Barcode Scanning Software
In order to lower the costs of picking mistakes and reduce chances of making mistakes in the first place, you need to be able to measure the mistakes you do make. This is where barcode scanning software comes into the equation.
Barcode scanning software can decrease the number of costly errors that occur during the picking process, as well as count and measure picking mistakes so you have a better idea of what your mistakes are truly costing you. The software also has built-in validation features so you know that the right product is being shipped to the right customer each and every time. With barcode scanning software, accuracy will not be just a desire of your business, it will become a reality.
IWI Consulting’s barcode scanning software solution for Sage 300cloud (formerly known as Sage 300) is designed to help organizations improve inventory management, achieve total business efficiency, and save on the high costs related to business inventory. This web based inventory management solution provides users with full control over their inventory management, allowing them to eliminate costly and time-consuming manual processes and remove the barriers to effective inventory management. To learn more about IWI Consulting’s web based inventory management solution and its unique features built especially with the small business in mind, click here.
To learn more about how barcode and scanning technology can help improve your company’s inventory situation, download our Barcode Scanning Inventory Module for Sage 300cloud (formerly known as Sage 300) product brochure.
Our small and dedicated team specializes in helping small-to-medium size Canadian businesses and non-profits select and adapt Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), Human Resource Management (HRMS) and IT services. With IWI’s 15 years in business and 100 plus years of combined experience, IWI has helped hundreds of food manufacturing, distribution, and financial service companies gain efficiency, grow, and lower their operating costs.
With the unique combination of industry knowledge and diverse technology expertise, IWI provides cost-effective solutions to help clients gain a competitive edge. As a Sage business partner, servicing the Greater Toronto Area, we support evaluation and implementation of operations and finance systems to optimize technology, ensuring high return on investment with a quick and painless transition to new software.