Mispicks cost individual warehouses $389,000 per year

A single mispick in a warehouse or DC might not seem like a big deal, but over the course of a year, the cost of such errors can quickly add up. According to the results of a survey conducted in late 2012 for Intermec, a developer of mobile data-capture solutions, a single mispick costs a warehouse approximately $22. Based on the average number of errors reported by respondents to the survey, mispicks in a single distribution center amount to $389,000 annually, on average.

More than half (52 percent) of the 250 respondents reported a pick accuracy rate of less than 97 percent. On top of that, 19 percent do not measure the costs of mispicks in any way, which suggests that the impact of such errors on the supply chain may be even greater than reported, Intermec said.

Survey respondents indicated that they consider achieving high pick accuracy rates to be key to improving profit margins. Forty-seven percent said that picking was an area where cost savings could easily be achieved. In addition, 59 percent of respondents said they were using a "perfect order" metric to gauge picking accuracy and identify areas for improvement.

The research surveyed 250 supply chain, warehouse, and distribution managers in the United States, the United Kingdom, France, and Germany. Respondents came from a range of industries, including retail, manufacturing, distribution, logistics, chemicals, pharmaceuticals, wholesale, and consumer goods.