How Cedro Reduced Picking Error Rate to 0.1% with Automated Order Picking

Cedro Sdn. Bhd. is the official B2C Distributor for illy Caffè, the premium Italian coffee company’s branches in Malaysia and Singapore. The distributor manages all of illy’s online channels and illy Cafes in Malaysia. As a distributor, Cedro aims to provide a high-quality end-to-end experience to consumers who wish to enjoy illy coffee across a range of touchpoints including online channels, offices and their stores.

Cedro sells their client’s products across Malaysia with a physical store in Klang Valley. All of their operations are internal with a warehouse forming the core of their business and ensuring their client’s merchandise is moving smoothly and reaching the correct customers and stores on time.

However, as a distributor they managed their operations manually, which caused them to face a few problems affecting their operations and services.

Challenges

The root of Cedro’s challenges was manual processes and inefficiencies in inventory and order management. This hindered their operations and customer satisfaction in several ways.

1. Overselling due to inaccurate inventory management

Despite regular inventory updates across their sales channels, Cedro often found that their stock counts were inaccurate across each platform. The problem stemmed from their manual updating process. Cedro dedicated different stock quantities to each of their sales platforms and had to update them every time a sale was made. However, these updates couldn’t be done in real time leading to overselling, order cancellations, and revenue impacts.

2. Returns and customer complaints due to incorrect parcel delivery

Another challenge Cedro faced was customer complaints and negative feedback as incorrect products would be picked, packed, and shipped to customers. Most of the distributor’s products have similar packaging which made it difficult to tell them apart. As a result, the fulfillment team had trouble picking the right items and Cedro experienced a 10% order issue rate. What they lacked was automated order picking.

3. Product wastage due to poor batch and expiry management

As a distributor of FMCG products and coffee machines, Cedro maintained product sheets with batch and expiry details. Unfortunately, implementing inventory flows like FIFO (first in, first out) and FEFO (first expire, first out), was difficult because it took longer to differentiate the older stock units from the newer ones. In the attempts to work quickly, the picking team often picked products based on proximity over batch and expiry. This translated to the problem of product wastage and redundancy.

4. Rigid order management due to manual backend operations

In the event of an order change, for example, clients calling up the distributor to alter their order quantity, Cedro found it difficult to edit orders to meet customer requirements. To ensure the correct orders were updated and fulfilled accurately, orders were delayed and sometimes errors occurred in the process.

5. Difficulty managing promotion campaigns

Cedro runs pre-order promotions for their client’s products. But managing the orders for these promotions was often a challenge as they couldn’t meet their SLA targets once stocks arrived. That’s because they managed and processed inventory manually and couldn’t fulfill their orders efficiently.

6. Limited product bundle variations

When selling on their webstore, Cedro faced the complication of managing multiple product bundles and therefore had to limit the variations provided. These bundles had to be created digitally and the inventory for the same had to be bundled physically and managed manually. This blocked inventory that was eating up valuable space in their warehouse.

Implementation

Upon assessing their internal challenges, Cedro decided they needed to digitize and automate their operations to reduce errors and costs, fulfill orders faster, and keep their customers happy. Cedro chose to implement Anchanto Order Management and Warehouse Management systems, as the SaaS technology provider came highly recommended by top 3PL players in Malaysia and Singapore.

Cedro’s team found the onboarding process very detailed and well prepared, which allowed the distributor to discuss their exact requirements and obtain the flexibility they required. The launch of Anchanto’s technology for Cedro was a smooth hands-on process, and the distribution company received thorough training to enable faster team onboarding.

Solutions and Results

After implementing automated order and inventory management technology to their backend operations, Cedro managed to eliminate many of their challenges, leading to a surge in customer satisfaction. The distributor also obtained several other benefits ensuring their customers enjoy a great experience.

Here’s how Cedro excelled with OMS and WMS technology:

1. Automated inventory updates

Cedro was able to end inventory inaccuracies and overselling with the help of smart warehouse and order management systems. These systems enabled the distributor to manage orders and inventory centrally and stay connected with their sales channels through ready-to-use integrations. That way, every time an order comes in, the inventory records are updated on the systems and the relevant sales channels, preventing overselling, order cancellations, and marketplace penalties.

Cedro also uses the data export tools and inventory tracking features available on Anchanto Warehouse Management. These capabilities allow them to respond to internal requests on stock status in real-time, preventing overselling items and disappointing customers.

2. Guided order picking

From a 10% picking error rate, Cedro managed to reduce it to less than 0.1%. The distributor’s fulfillment team now identifies the correct packages from the right storage shelves with the help of Anchanto’s Warehouse Management technology. The software enables automated picking ensuring that every stock unit picked is selected carefully and matches the order requests perfectly.

3. Product batch and expiry management

When onboarding new inventory, Cedro can now record inventory quantities and details like batch numbers and expiry dates. This information is saved on Anchanto Warehouse Management and transferred to the hand-held devices that pickers use when scanning and choosing stock units for order fulfillment. With this information available on hand, Cedro now implements smart inventory flows like FEFO and FIFO with ease.

4. Order editing

To enable flexible orders, Cedro uses order editing to include or remove order units requested by customers. With this feature, the distributor can make immediate changes to orders before picking is initiated. All edited order records are updated accurately before they reach the warehouse, preventing errors and delays in delivery.

5. Faster order fulfillment

Cedro has also witnessed an improvement in their SLA management. With the help of integrated SaaS systems, the distribution company has reduced orders with problems from 5% to less than 1%. It also saves an average of 2.5 minutes per order. Fulfillment details are automatically communicated to 3PLs (third-party logistics companies) today by Anchanto Warehouse Management. So, the company no longer works with logistic partner websites to submit collection requests and other information.

6. Pre-order promotion management

With the help of the promotions module on the OMS implemented, Cedro can now manage promotion campaigns flawlessly, with consistent results and easy preparation for their promotions. They are particularly using the Pre-Order Promotion function to sell products that are on the way to their warehouse facilities. This ensures that their products are always available to customers, and they can meet their SLA targets.

7. Customizable product bundles

By integrating their Woocommerce web store with Anchanto Order Management, Cedro can now manage product bundles in a flexible way, enabling their customers to select the content of bundles by themselves. This is without the distributor having to create hundreds of variations of their product bundles. Catering to their customers’ different tastes is vital for Cedro, and the ability to create customized bundles has led to a notable improvement in their customer experience.

Cedro is currently working to create a solution where they can store goods in Malaysia, transferring them for final sales in Singapore. They plan on reducing storage costs by leveraging better Malaysian storage rates. The Anchanto Warehouse Management system will play the part of tracking and ensuring stock availability, enabling Cedro to repackage and replenish stock levels in Singapore according to the market requirements.