The Paperless Warehouse: Remove Paper to cut costs, improve accuracy and enhance your eco-credentials
There are many hidden costs associated with paper based systems used for stock control, sales order processing and fulfilment. Iain Coplans, founder of Stok.ly, discusses how retailers can benefit from moving to a paperless warehouse and adopt digital technologies to improve the accuracy and speed of daily tasks while enhancing your eco-credentials.
Time spent re-picking, the cost of shipping the wrong items, the cost of return shipping and of course, the long term cost of disappointing customers by sending incorrect items, all reduce profits and restrict long term sales growth.
Day to day stock control in your warehouse including stock takes and receiving Goods In can also benefit from moving to a paperless solution, improving the speed and accuracy of these tasks.
With eCommerce Marketplace terms and conditions becoming more stringent on the fulfilment of sales orders and customer feedback on the accuracy of order fulfilment affecting your search visibility and even your right to sell on a marketplace, never has it been more important to improve your speed and accuracy in order fulfilment.
Using handheld PDAs with barcode scanners to facilitate digital picking and packing can have a dramatic effect on your bottom line, your customer satisfaction and the output of your team.
Average Pick Errors in UK warehouses range from 1-3%.(1)
For a business fulfilling 250 orders per day with an average basket size of 1.5 items, a pick error rate of 3% will result in 337 incorrectly picked items per month.
Using a digital solution such as an App to manage Picking, means your team scan items off the shelf, preventing the wrong items or the wrong quantities being picked.
Moving to a paperless picking solution has been proven to reduce picking errors to below 1%.
Pick errors often lead to packing errors and result in a number of problems downstream, often ending with disappointed customers receiving the wrong products.
23% or returns are generated by customers receiving the wrong items. (2)
Packing errors result in a number of costly outcomes.
Firstly, you have a customer who is disappointed and may not shop with you again.
Poor feedback on marketplace channels can seriously affect your visibility in search results.
“Negative reviews directly hurt your business by lowering your products’ visibility and dissuading customers from buying your product. Your seller feedback rating also affects your chances to win the Buy Box.” (3)
Failure to fulfil orders may result in you losing the right to sell on Amazon or eBay.
The cost of return shipping must also be accounted for, as must the cost of restocking items or managing the shrinkage caused by damage to items during shipping.
Errors at the packing station can add up fast and have serious long term consequences on your ability to grow sales.
The true cost of returns
To calculate your ecommerce return rate, divide the number of returned items by the total number of shipped items and multiply by 100.
e.g. 100 returns / 1000 shipped = 0.1 x 100 = 10%
Card payment provider, Paymentsense, analysed anonymised transactions from more than 54,000 Paymentsense card machines across the UK. (4)
Across the 118 UK locations analysed, on average £15,600 a month is returned from small businesses to consumers.
With 23% of returns generated by customers receiving the wrong items, using barcode scanning to reduce pick and pack errors has become a critical success factor for companies looking to achieve long term profitable growth via eCommerce channels.
Items not found during Picking
How much time does your warehouse team spend fixing picklists that contain items that cannot be found?
The process of manually updating pick lists and reprocessing the associated sales orders all affect your ability to despatch sales orders in a timely fashion.
Are your team completing rolling stock takes to confirm inventory levels, reduce wastage and provide an audit trail on your cost of goods held for HMRC?
Using handheld PDAs with barcode scanning to complete rolling stock takes increases accuracy and speed, helping your team get more done each day.
With digital stock takes, inventory can be updated, variances captured and your stock accurately adjusted, all in real time.
If a stock take finds fewer items than expected, does your system reduce available stock automatically to prevent you selling out of items you don’t have?
Adjusting stock levels in real time prevents you selling items that are damaged or not found during stock takes.
Cut the manual data entry and time lags that paper based systems generate and move to real time inventory control.
Using handheld PDAs with barcode scanning to receive goods in, cuts out data entry, human error and the time lag between you receiving stock and it being available to sell online.
Scanning items in as they are delivered means your inventory levels across every channel are updated in real-time.
When combined with real-time inventory management across all channels, the minute your stock arrives, inventory levels are updated on your eCommerce platforms and products are available to sell.
Moving to Zero Net Carbon
“Net zero is important as it’s the best way we can tackle climate change by reducing global warming. What we do in the next decade to limit emissions will be critical to the future, which is why every country, sector, industry and each one of us must work together to find ways to cut the carbon we produce.”
“net zero refers to the balance between the amount of greenhouse gas produced and the amount removed from the atmosphere. We reach net zero when the amount we add is no more than the amount taken away.” (5)
Using the paper impact calculator found at https://c.environmentalpaper.org/individual.html, if you print off 10,000 A4 sheets of paper a month as Goods Out Notes or Pick Lists, your environmental effect is as follows:
- 10,000 sheets of basic A4 paper
- Equivalent of 407 kgs of C02
- 4864 litres of water used to through lifecycle of creating this paper
Moving to a paperless warehouse offers many benefits for your business and our planet.
There are many fine multichannel software vendors operating in the UK, however the range of warehouse management functionality varies greatly between products.
It is critical to find software that is aligned with your business model if you wish to move to a paperless warehouse and achieve the benefits mentioned above.
About Iain Coplans
Iain Coplans is the founder and Managing Director of Stok.ly, a company which delivers seamless order and warehouse management solutions for retailers selling in-store and online.
Stok.ly supports businesses of all sizes, from those looking to grow online through the adoption of new channels through to sophisticated multi-location retailers and specialist eCommerce enterprises considering optimising processes to achieve more.