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Ecommerce metrics

Ecommerce metric refresher — Order Picking Accuracy

Vallabh Daga
October 31, 2020
5
mins read

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Order Picking Accuracy (OPA) is defined as the total number of orders picked and verified to be accurate prior to shipment divided by the total number of orders picked over the same period of time, as a percentage

OPA formula
OPA formula

For example,

  1. You picked 1,000 orders in the month of December
  2. Out of these, 900 orders were picked accurately and 100 orders were picked incorrectly
  3. Based on this data, your order picking accuracy in the month of December = 900/1000 = 0.9
  4. Order picking accuracy (%) for the month of December = 90 %

Why should businesses calculate OPA?

Knowing the OPA allows businesses to identify error-prone processes and take corrective actions to improve picking accuracy.

New operational models such as Just-In-Time (JIT) and new marketing strategies such as micro maketing are persuading businesses to increase their emphasis on OPA and ways to improve it.

Benefits of increasing OPA

1. Accelerate profitability

OPA is directly proportional to profitability; the more number of orders you deliver accurately, the lesser number of returns and by extension, lesser costs incurred.

2. Reduce errors

By improving OPA, businesses can avoid unnecessary errors. Mistakes while picking lead to incorrect deliveries of orders, create inefficiencies in warehouse operations and force businesses to bear additional expenses.

3. Improve customer retention

Modern-day customers need their orders to be delivered accurately, and they have little or no tolerance for errors. Consistently delivering orders accurately will allow customers to blindly trust your brand, this leads to higher customer retention and improved NPS.

How to increase OPA?

There are various strategies to help improve your OPA, but it is essentially done in one of the two ways:

  1. Reducing number of errors through powerful workflows
  2. Incorporating next-gen technology for error-free automation

Ways to increase OPA

1. Optimise your warehouse layout

The organisation of a warehouse’s inventory can make or break efficiency when it comes to the picking of orders. One of the simplest ways to organise your inventory is to segment items using ABC analysis.

ABC analysis basically involves grouping items based on historic purchase data and patterns.

Group A - Most frequently purchased products

Group B - Less frequently purchased products

Group C - Rarely purchased items (Deadstock and excess inventory)

This allows the picker—whether it is a human or a machine to retrieve items faster and more accurately.

Optimise warehouse layout
Warehouse optimisation after performing ABC

2. Incorporate smart automation

Since humans are directly involved in the picking process, errors are likely to occur. Order pickers can spend the majority of their time moving from one point to another within the warehouse, this creates a lot of wasteful overheads.

Luckily, with the advent of technology, we now have access to various tools which automate traditional warehouse operations—barcode scanners, conveyor belts, and intelligent robots are some of the tools designed to reduce workload and time spent picking orders.

Incorporate smart automation
Conveyor belts being used in a warehouse to move items quicker
Good, bad or indifferent, if you are not investing in new technology, you are going to be left behind

-Philip Green, Chairman of Arcadia group

3. Analyse errors, incentivise accuracy

You need to analyse historic operational data to identify error-prone aspects of your operation and take corrective actions with laser-like focus.Another strategy adopted by warehouse management is to use positive reinforcement to improve productivity. For example, the picker with highest accuracy is eligible for a bonus.

Bottom line

Increasing your OPA could be the key to customer satisfaction and an astute brand image. Incorporating these tips into warehouse operations will help you streamline picking processes and enhance operational efficiency.

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