Introduction
In the fast-paced world of e-commerce, picking accuracy is a key determinant of a business’s efficiency and customer satisfaction. One of the major factors influencing picking accuracy is the complexity of your Stock Keeping Units (SKUs). As product lines expand and businesses scale, SKU complexity can become a significant barrier to maintaining order fulfilment accuracy.
In this blog, we’ll explore how SKU complexity affects picking accuracy and the potential solutions that can help brands optimise their fulfilment processes. Whether you’re operating with a wide variety of products or a few highly specialised items, understanding how to manage SKU complexity is essential for maintaining operational efficiency.
What is SKU Complexity?
The Relationship Between Product Variety and Fulfilment Challenges
A Stock Keeping Unit (SKU) is a unique identifier for each product in your inventory. It can represent a single item or multiple variants of the same product, depending on size, colour, style, or configuration. As a business grows and expands its product range, the number of SKUs typically increases. This SKU complexity—the sheer number and variety of products you manage—poses unique challenges for picking accuracy and operational efficiency.
The more SKUs you have, the more difficult it becomes to efficiently manage inventory levels, organise warehouse layouts, and ensure accurate picking. This challenge is amplified in environments where high-velocity SKUs—products with frequent orders—are mixed with slow-moving or rarely ordered SKUs.
How SKU Complexity Affects Picking Accuracy
Increased Risk of Picking Errors
The higher the number of SKUs, the more likely employees will make mistakes when picking orders. These errors can range from picking the wrong size or colour to mistakenly pulling a product from the wrong location.
SKU complexity can lead to confusion, especially if products look similar or have overlapping characteristics. In these cases, manual picking can result in frequent errors, delayed shipments, and customer dissatisfaction. For instance, a mix-up between two similar products or sizes could result in sending the wrong item to a customer, leading to returns and additional costs.
Key Impact:
Increased SKU complexity leads to a higher chance of picking errors, which directly impacts order accuracy, customer satisfaction, and fulfilment speed.
Slower Picking Process
When SKUs are numerous and diverse, employees need to spend more time searching for the correct items, particularly if the warehouse layout is not optimised for quick access to high-demand products. This search time results in slower picking times, which can further impact the overall order fulfilment time.
In addition, if products are stored inefficiently (e.g., similar items spread across different locations or poorly organised shelving), pickers may need to retrace their steps multiple times to find items. This reduces productivity and increases the likelihood of errors.
Key Impact:
SKU complexity directly leads to slower picking processes, increasing operational costs and reducing fulfilment efficiency.
Inventory Visibility Issues
The more SKUs you manage, the harder it becomes to track stock levels accurately in real time. Inventory visibility issues can lead to stockouts, overstocking, or picking errors. For example, if a product is out of stock but the system shows it as available, a picker might select the wrong item for the order. This can lead to delays and customer dissatisfaction.
Effective inventory control methods become crucial when managing a broad range of SKUs. Poor visibility can significantly disrupt operations, especially when the inventory system isn’t integrated with warehouse management systems (WMS) or order management systems (OMS).
Key Impact:
Inventory visibility issues due to SKU complexity can result in stock discrepancies, which negatively impact picking accuracy and fulfilment efficiency.
How to Address SKU Complexity and Improve Picking Accuracy
Streamline Warehouse Layout and Product Organisation
To mitigate the effects of SKU complexity, businesses should optimise their warehouse layout. Efficient warehouse design can significantly reduce picking errors and improve operational speed. One strategy is to use zone-based picking, where similar SKUs are grouped in the same area of the warehouse. High-demand items should be placed in easily accessible locations, reducing time spent searching for products.
Incorporating barcode scanning and labeling systems into the warehouse layout ensures that pickers can easily identify the right SKU, even in a crowded storage space. This reduces confusion and helps maintain picking accuracy.
Key Impact:
An optimised warehouse layout that groups high-demand SKUs together and uses barcode systems will reduce search time, improve picking accuracy, and enhance overall fulfilment speed.
Use Technology for Enhanced Accuracy
Technology plays a vital role in reducing the impact of SKU complexity on picking accuracy. Warehouse Management Systems (WMS) and RFID scanning can automate many aspects of the fulfilment process, making it easier for workers to locate the right SKU and reduce the chance of errors.
AI-driven solutions can help improve order picking accuracy by predicting which products are likely to be ordered together or which SKUs have high turnover rates. AI-powered route optimisation for pickers can further reduce travel time and improve overall efficiency.
Key Impact:
Integrating WMS, RFID, and AI solutions will reduce errors, improve picking accuracy, and streamline the fulfilment process.
Implement Batch Picking and Cross-Docking
Batch picking is an effective strategy for businesses managing multiple SKUs. Instead of picking items for a single order one at a time, batch picking allows workers to pick items for multiple orders in one go. This strategy reduces time spent on repetitive trips and can be highly efficient in warehouses with SKU complexity.
Cross-docking is another strategy that can help. In this approach, goods are directly transferred from inbound shipments to outbound shipments, reducing the need for storage and streamlining the picking process.
Key Impact:
Both batch picking and cross-docking optimise picking efficiency and reduce errors, especially in warehouses with high SKU complexity.
Regularly Review and Optimise SKUs
To prevent SKU complexity from getting out of hand, it’s essential to regularly assess your product offerings. Conduct periodic reviews to eliminate slow-moving, obsolete, or redundant SKUs from your inventory. By keeping your product range lean and focused on high-demand items, you can reduce complexity, improve inventory accuracy, and enhance picking performance.
Key Impact:
Reviewing and optimising your SKUs ensures that your warehouse operations remain manageable and that picking accuracy is maintained as your product catalogue evolves.
Conclusion
SKU complexity can significantly affect picking accuracy, leading to increased errors, slower fulfilment times, and higher costs. However, by optimising your warehouse layout, implementing technology, and streamlining processes, you can minimise the impact of SKU complexity and improve fulfilment efficiency.
At Emiza, we optimise order fulfilment with advanced picking solutions that eliminate errors and improve efficiency. Unlike traditional manual picking, we use handheld devices to scan product codes, ensuring that every item picked is accurate. Our picking process follows FIFO (First In, First Out) or FEFO (First Expired, First Out) methods, tailored to meet customer-specific requirements. This technology-driven approach guarantees that inventory is managed with speed, accuracy, and efficiency, helping businesses scale seamlessly and enhance their fulfilment processes.
