Key Performance Indicators (KPIs) are the metrics used to measure the performance of a business. Similarly, ecommerce metrics are the KPIs that can help online businesses evaluate their performance, set benchmarks, and take corrective measures to steer the business in the right direction.
In this ecommerce metric refresher, you will learn what is order picking accuracy (OPA), how to calculate order picking accuracy (OPA), why should businesses calculate order picking accuracy (OPA), benefits of increasing order picking accuracy (OPA), and the strategies to increase order picking accuracy (OPA).
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.
The following illustration shows the order picking accuracy (OPA) formula:
Let's see how to calculate order picking accuracy (OPA) with an example,
Knowing the order picking accuracy (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.
Order picking accuracy (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.
By improving order picking accuracy (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.
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.
There are various strategies to help improve your order picking accuracy (OPA), but it is essentially done in one of the two ways:
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.
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.
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
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.
Increasing your order picking accuracy (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.