Misshipment: What Is Misshipment and How To Prevent It

Misshipment occurs when an order is incorrectly sent to the wrong address, contains the wrong items, or is handled in a way that does not meet the customer's or sender's expectations. This phenomenon is more than just a minor inconvenience; it is a critical issue that can significantly impact a company's operational efficiency, customer satisfaction, and overall reputation.

Understanding the nuances of misshipment and implementing strategic measures to prevent it are essential for businesses aiming to maintain high standards of service and reliability.
 

 

Misshipment refers to a situation where goods are incorrectly shipped. It can happen in various ways, such as items being sent to the wrong address, the wrong items being shipped to the correct address, or goods being delivered at the wrong time. Misshipments can occur due to human error, system errors, or miscommunication within the supply chain. They can cause inconvenience for both the sender and the recipient, leading to delays, additional costs for returns and reshipments, and potentially harming business relationships.

 

Picking errors are a significant cause of misshipment primarily due to the manual nature of the picking process in many warehouses and distribution centers. This stage involves workers selecting the correct items from shelves to fulfill orders, a task that is susceptible to human error. Factors such as misreading order slips, confusing similar-looking items, or simply grabbing the wrong quantity can easily lead to mistakes. Moreover, the pressure to work quickly, especially during seasonal demand periods, can exacerbate the likelihood of errors. Since the picking process directly determines which items are packed and shipped, any mistake at this stage directly leads to misshipment, affecting customer satisfaction and operational efficiency.

Inventory mismanagement is a pivotal cause of misshipment due to discrepancies between the physical stock available and the inventory records maintained by a business. When inventory records are inaccurate, it can lead to a host of problems, including the shipment of incorrect items. For instance, if a product is mistakenly marked as available in the inventory system when it is actually out of stock, orders for that product might be processed and a different item could be sent in its place. The root of these issues often lies in poor inventory control practices, such as infrequent stock audits or the lack of a robust system to track inventory changes in real time.

When information about order details, inventory levels, or customer requirements is not accurately or timely shared between sales, warehouse, and shipping teams, it creates ample room for errors. For instance, if a customer changes an order last minute and this update fails to reach the warehouse staff in time, the original order might be mistakenly shipped out. Similarly, if the inventory team does not communicate stock shortages to the sales team promptly, orders might be processed for items that are no longer available, leading to potential misshipments of alternative products without customer consent.

Accurate labelling is essential for ensuring that the correct items are sent to the intended recipient. Errors can occur in various forms, such as incorrect or illegible labels, wrong shipping addresses, or mismatched product barcodes. Such mistakes can lead to packages being delivered to the wrong location, or the wrong items being sent to customers. The packaging process involves several details that must be precisely followed to avoid these errors, including the selection of the correct packaging materials and ensuring that the labels match the contents. Especially in environments where packaging and labelling are done manually, the risk of human error is heightened, making these mistakes more likely.
 

Rushed orders and high volume periods, such as holiday seasons or promotional sales events, significantly increase the risk of misshipments due to the intense pressure they place on every part of the fulfillment process. During these times, the volume of orders can overwhelm existing operational capacities, leading to shortcuts and rushed work as staff scramble to keep up with demand. This haste often results in mistakes such as incorrect picking, packaging errors, or mislabeling, as employees may not have sufficient time to double-check their work. The urgency to dispatch orders as quickly as possible to meet delivery expectations or deadlines further compounds the likelihood of these errors, directly impacting the accuracy and reliability of shipments.

 

Misshipment affects both businesses and customers in significant and often interconnected ways, leading to a range of negative outcomes:

Increased Operational Costs: Rectifying misshipments involves additional logistics costs, including shipping the correct item to the customer, handling returns, and potentially covering return shipping costs for the incorrect item. These expenses can accumulate, particularly for businesses with tight margins or those that experience frequent misshipments.

Damaged Reputation: Customer trust and brand reputation can suffer greatly due to misshipments. In the age of social media and online reviews, negative experiences can be shared widely and quickly, potentially deterring new customers and eroding the loyalty of existing ones.

Inventory Discrepancies: Misshipments can lead to inaccuracies in inventory records, complicating inventory management. This can result in stockouts, where customers cannot purchase desired items because they are erroneously listed as out of stock, or overstock situations, tying up capital in excess inventory.

Reduced Efficiency: Dealing with the aftermath of misshipments distracts staff from their core duties, reducing overall operational efficiency. The time spent rectifying these issues could be better used in improving the business or focusing on growth initiatives.

Strained Supplier and Partner Relationships: Frequent misshipments may lead to tensions with suppliers, logistics partners, and retailers, potentially leading to strained relationships or even the termination of partnerships.
 

Dissatisfaction and Inconvenience: Receiving the wrong product is frustrating and inconvenient, leading to poor customer experience. The process of returning the incorrect item and waiting for the correct one can be time-consuming and may dissuade customers from future purchases.

Loss of Trust: Customers expect reliability from the businesses they patronize. Misshipments can erode this trust, making customers more likely to turn to competitors in the future.

Unexpected Delays: Particularly for items needed by a specific date (e.g., gifts, essential goods), misshipments can cause significant inconvenience due to unexpected delays, affecting the customer’s plans or needs.

Financial Impact: In some cases, customers might face financial implications, such as missed work to return an item, non-refundable shipping costs, or the need to purchase a replacement item at a higher price elsewhere.

 

 

Preventing misshipment involves a multi-faceted approach that targets the underlying causes through improved processes, technology, and training. Here are strategies businesses can implement to minimize the occurrence of misshipments:

Regular Inventory Checks: Regular inventory checks is a critical measurement in preventing misshipments because they ensure that the physical stock in a warehouse matches the recorded inventory in the management system. Discrepancies between these two can lead to several issues, including misshipments, as employees may rely on inaccurate data when fulfilling orders. For example, if a product is erroneously listed as available in the system but is actually out of stock, an employee might pick and ship a different item as a substitute without realizing the mistake. Regular inventory audits help identify and correct these discrepancies promptly, ensuring that the inventory data is accurate and reliable. This accuracy is crucial for the proper functioning of automated systems and for employees who depend on this information to process orders correctly.


Utilize Barcode Scanner: Utilizing barcode scanners in the order fulfillment process is a highly effective strategy for preventing misshipment due to the accuracy and efficiency these devices bring to inventory management and order processing. Barcode scanners eliminate the need for manual data entry, which is prone to errors, by allowing workers to quickly and accurately capture product information directly from the barcode. This automation significantly reduces the chances of human error during the picking and packing stages. When an item is scanned, the warehouse management system (WMS) immediately verifies whether it matches the order details, ensuring that the correct product is selected. This real-time verification process helps to prevent misshipments by catching errors before the products leave the warehouse, thus maintaining high levels of accuracy in order fulfillment.

Upgrade Order Management System: Upgrading an order management system (OMS) is also a critical step in preventing misshipments, as it centralizes and streamlines the entire order fulfillment process, from receipt of the order to delivery. An advanced OMS integrates seamlessly with inventory management, warehouse management, and customer relationship management systems, ensuring that all departments have access to real-time, accurate information. This integration reduces the risk of errors at multiple points in the fulfillment process. For example, when an order is placed, the system instantly updates inventory levels, allocates stock for the order, and provides the warehouse team with precise picking information. By automating these steps, the likelihood of human error, such as selecting the wrong item or shipping an order to the wrong address, is significantly reduced. Furthermore, an upgraded OMS can automatically flag discrepancies or unusual orders for manual review, adding a layer of error prevention.


Keep Communication with Carriers: Carriers are responsible for the final step of the delivery process, and their performance directly impacts the accuracy and timeliness of shipments. By keeping in constant communication, businesses can relay important information about shipments, such as special handling instructions, delivery timeframes, or changes in delivery addresses. This reduces the risk of errors occurring during transit, which can lead to misdeliveries. Additionally, effective communication allows for real-time tracking and updates on shipment status, enabling businesses to proactively address any issues that may arise, such as delays or routing errors, before they result in a misshipment.


Outsourcing to Third-party Logistics (3PL): Outsourcing logistics operations to a third-party logistics (3PL) provider can significantly reduce the risk of misshipments due to the expertise, technology, and infrastructure these specialized companies bring to the table. 3PL providers are in the business of logistics and therefore invest heavily in the latest technology, systems, and processes designed to optimize the order fulfillment process. This includes advanced warehouse management systems, transportation management systems (TMS), and cutting-edge picking and packing technologies. These tools enhance accuracy and efficiency at every stage of the supply chain, from inventory management to shipping. By leveraging the capabilities of a 3PL, businesses can benefit from these investments without the upfront costs, ensuring that orders are fulfilled correctly and efficiently. Furthermore, 3PLs often have established relationships with a wide range of carriers, enabling more flexible and cost-effective shipping options, which can further reduce the risk of misshipments by selecting the most reliable and appropriate shipping methods for each order.

Mistakes made by people, like typing errors, are usually the biggest reason.

Technology like scanning barcodes makes sure orders are correct before they're sent out.

Teaching staff properly means they're less likely to make mistakes that lead to misshipment.

While it greatly reduces errors, it can't guarantee that misshipments will never happen.

Quickly fix the mistake, send the correct item, and maybe offer something extra for the trouble.