One half of an eCommerce company’s business is making sales. The other half is fulfilling them – and you can’t make a profit until fulfilment is finished. Any techniques or tools that will help you improve order fulfilment are worth their weight in gold – at least over the long term.
A key way to monitor order fulfilment is order accuracy, which is arguably the most important order fulfilment KPI.
What is Order Accuracy?
Order accuracy is defined as the percentage of orders with no errors. You’ll also hear this referred to as POP, which stands for Perfect Order Percentage, or as perfect order fulfilment.
There are four basic criteria for these errors. Looked at another way, there are four standards to consider an order fulfilled.
An accurate order must:
- Reach the customer by the time they expect it, ideally faster
- Reach the customer undamaged (some damage to the packaging is acceptable if the contents are safe, but this is still not ideal)
- Contain everything the customer ordered
- Not contain anything you didn’t intend to include (promotional giveaways and customer surprises are fine; free product outside your budget isn’t)
There will be some people who read that list and think those should all go without saying. Then there will be veterans of the shipping department, who will have remembered times they all went wrong.
An inaccurate order costs your business time, resources, and money as you correct the order. Worse, a reputation for low order accuracy hurts your company’s reputation. This in turn reduces customer trust.
And customer trust is essential to attract new customers and to retain existing customers.
The Basics: Easy Order Fulfilment Wins
Whenever you identify a problem area for your business, one of your first questions should always be “how can I make some quick, easy improvements?” Order fulfilment is no different. Before we get into big investments, let’s consider some simple steps to take.
Track Your POP
This has to be step one. You can’t measure improvement without information. POP is easy to calculate, and it gives you a clear idea how big a problem you currently have.
As a general rule of thumb, most eCommerce businesses that track POP hover somewhere between 95 and 98%. We naturally don’t know the POP of businesses that don’t track it; however, as they’re paying less attention to the problem, it’s not unreasonable to assume they might be lower.
On average, raising your POP by 3% returns a 1% profit increase. So, if you pull together your POP over the last month and you’re hovering at 92%, you’ll see profits grow by 1% just getting back into the normal range.
Check for Human Error
Do you have an order management system? Cloud Commerce Pro’s dispatch and shipping systems are specifically designed to improve order fulfilment speed while increasing order accuracy. But there’s another benefit just from Cloud Commerce Pro’s standard order management provisions.
Because our system integrates with your sales channels, orders arrive with your fulfilment team without the risk of human error in between. You don’t need to worry about anyone skim-reading an order or mishearing someone else read it aloud.
If you don’t have a system like Cloud Commerce Pro, you can institute manual checks. It’s worth noting that manual checks will slow down a process that’s already running slower than it has to.
Always make sure your fulfilment team have a pick list. Just having a record they take with them that is marked off when they pick each item will improve accuracy.
(A modern barcoding and scanning system can provide a double check as part of their standard work. Our Android scanner app can provide users with a pick list on the screen and update it as each code is scanned.)
If you haven’t got the technology or the software to check off items as you pack, weigh packages once they’re assembled. Parcel weight is a simple, easy first-pass check – if the weight is off, something’s wrong. You’ll probably need the weight for booking shipping, anyway.
Make Smart Exceptions
Every business operates on rules. Re-stock when stocks fall below this level. Start stockpiling on this date ahead of peak season. This courier service for orders like this.
Customer satisfaction builds return customers. So, if an order falls through the cracks, an exception to that rule where you upgrade your shipping plan to something faster can be worth doing. Absorb the expense and let the customer know what you’re doing.
When customers know you encountered an issue and still got them their order on time, they’re more likely to be loyal to you in future. That’s an investment in your future.
The Bigger Picture
Some steps cost more or take more time to put into play – but there are big gains to be had if you’re willing to take them. Once you have your easy fixes in play, you should be looking at the bigger steps, to decide whether it’s time to take the plunge.
Automate Where Possible
Some of those easier steps rely on you having an order management system in place. Others can be done without, but can be done better with.
As your business grows, the need to have strong software support grows with it. Just reaching a level where you can take the time to worry about order accuracy is a sign you should be putting support in place. So, if you’re reading this article and you don’t have a dependable system live, it’s time to think about it.
Audit Your Shipping Partners
The biggest problem for many businesses is the one they have the least direct control over; the delivery process itself.
Any number of things that shouldn’t happen can happen once the company has handed over the package and before it arrives in the customer’s hands. Of course, the vast majority of the time, all goes as planned and everything’s fine.
But it is still worth reviewing the deliveries that go wrong and breaking that down by courier company, and by specific service.
Is one of your couriers complained about more often than others? Do you have a higher return rate on their priority delivery than their standard? Are international orders with a specific courier more likely to go wrong?
If the answer to any of these is yes, it’s time to take action. If you trust the courier overall, you might just speak to your customer representative, lay out your concerns, and see what they can do to help. On the other hand, if you think the problem can’t be solved that way, you probably want to change service.
You should have detailed records of customers and orders in a CRM, so reviewing this should be easy.
Audit Your Fulfilment Team
To carry out this step, you need to have a solid record of who’s done what. This is one of the few things that sometimes gets worse switching between pen and paper and software, as some systems don’t give you much flexibility in user accounts and permissions. Cloud Commerce Pro puts no limits on how many individual users you can set up user IDs for. This lets you easily see if one or two names appear against error-prone orders more often than the rest.
If most of the problems come from one or two employees, you have a choice. You can discipline them, arrange for extra training, or sit down with them and find out which steps in fulfilment give them trouble.
You might find some insights with that last one that will help everyone by improving the process – or you might find you simply have some problem employees.
Communicate with Customers
You can’t improve your order fulfilment by talking to customers, but you can definitely change how they feel about minor hiccups. If there’s likely to be an issue, drop them an email. If you can, provide full tracking details. There’s more to this than just hitting your metrics – but those metrics help you find it.
Just knowing a problem exists and is being worked on can turn frustrated customers into friendly customers.
This is the biggest of big steps. As your company grows, there will come a time when you need to relocate to a bigger warehouse, or to set up a second, third, etc.
This is an ideal opportunity to improve order fulfilment as part of doing something else. You can offer faster, more efficient shipping across the UK with a facility on the Scottish border, one in the Midlands (ideally West Midlands to cover Wales), and one in the south than you could with three facilities all built around your home town.
Distributing your stores of a given product across the warehouses is also important here – this allows each facility to act as a hub for orders, instead of a step in the journey.
Beyond this level, you get something like the Amazon model of fulfilment centres and distribution centres working in harmony.
Keeping stock in multiple locations requires good inventory management software – but you shouldn’t be expanding to a second location without full order management support.
POP is an essential part of customer fulfilment. Every step you take to improve your order fulfilment means a higher percentage of customers come away satisfied.
But every investment comes with a cost. Always start with the cheapest options for improvement. The improved profit can help you make further steps if you need to.
Keep an eye on your competition. You should always try to equal or outdo them for customer satisfaction; it’s one of the best ways to build market share.