Ignore ‘the perfect order’ metric at your profitability’s peril, says Intermec study

The third installment of results from a survey conducted by Intermec (Booth 4263) was released at ProMat, finding that 59% of managers use a metric known as “the perfect order”—meaning picked complete, on-time and error-free—to identify areas for improvement within their facilities.

“Distribution centers are losing an average of nearly $390,000 annually due to mis-picks,” said Bruce Stubbs, Intermec’s industry market manager for DC operations. “Companies see that as an area for improvement as they strive to reach their productivity and accuracy goals.”

The study—conducted in October 2012—surveyed 250 supply chain and distribution managers across the US, UK, France and Germany, said Stubbs. Companies that reported conducting a workflow process review found picking (47%) a key area where cost savings could most easily be achieved. Of those using “the perfect order” metric, 43% said complete shipments were the most profitable opportunity.

Perhaps the biggest challenge for companies seeking to eliminate mis-picks is their lack of technology use, Stubbs suggested.

“Despite recognition of the benefits that new technology and automation could provide to the bottom line, 23% of companies admit to still using paper to conduct distribution center processes,” he said. “However, 72% of managers see multi-functional devices as a critical tool to help ensure that workers are flexible and equipped to be more accurate and more productive.”

Stubbs says that the research reaffirms just how critical customer service levels are to overall business profitability. “Faced with these losses, and in light of the cost savings that must be achieved across a DC, continued resistance to the processes and tools that can make a difference is no longer an option for today’s businesses,” he concluded.

ProMat 2013 is scheduled to be held January 21-24, 2013 in Chicago’s McCormick Place South. The tradeshow will showcase the latest manufacturing, distribution and supply chain solutions in the material handling and logistics industry. Modern’s complete ProMat 2013 coverage.