The Hidden Costs of Manual Data Entry in Supply Chain Operations

In today’s fast-paced supply chain landscape, efficiency is everything and every second counts. Despite advancements in technology, many supply chain operations still rely on manual data entry—a practice prone to inefficiencies and errors.

Manual data entry can include (but are not limited to); entering purchase or sales orders into ERPs, verifying order details for accuracy, and sending updates to customers about order status or changes. Inventory management also involves labor-intensive processes, such as physically counting stock in warehouses, using spreadsheets to plan replenishments or track turnover rates, and manually adjusting inventory levels across multiple sales channels like eCommerce platforms and marketplaces.

While it might seem like a manageable task for small-scale operations, manual data entry poses significant challenges as your supply chain grows in complexity. Beyond errors and inefficiencies—neglecting to adopt modern solutions puts you behind competitors who have already implemented automated processes.

There are a lot of solutions on the market that will promise to automate your workflows. Perhaps it’s an iPaaS solution that will connect CSV to your ERP. There are also ecommerce-focused order management systems that will empower workflows with Shopify and Tiktok.

Your competitive advantage is finding an automation solution that connects your entire supply chain, from ecommerce to CSV to EDI and beyond. While it’s advantageous to automate certain manual processes, automating your entire end-to-end workflow is the most powerful way to set your business up for unprecedented growth. 

The True Impacts of Manual Data Entry

As supply chains grow more complex, the limitations of manual processes become even more apparent, creating roadblocks to scalability and visibility. 

Higher Error Rates

Manual data entry is inherently prone to errors. Typos, misplaced digits, or skipped entries can have a ripple effect across supply chain operations. For instance:

• A single error in a purchase order can result in overstocking or understocking.
• Incorrect shipping details can lead to delivery delays or lost shipments.
• Errors in pricing or invoices can damage relationships with trading partners.

According to research, the manual data entry error rate can reach as high as 4% meaning even a small percentage of errors can lead to significant financial losses. For example, if your business processes 10,000 transactions per month, a 4% error rate means 400 transactions are likely to contain mistakes.

Now, consider the potential cost of each error—whether it’s an overstock, a delayed shipment, or a pricing discrepancy. If each mistake costs an average of $50 to correct, this adds up to $20,000 in monthly losses ($50 × 400 errors). Over a year, that’s $240,000 in avoidable expenses.

Time-Consuming Processes

When you still rely on manual data entry, employees spend hours entering data into systems, cross-checking information, and fixing errors. This time could be better spent on strategic activities like optimizing inventory, improving vendor relationships, or exploring new markets.

For example, consider a supplier using an ERP to manage inventory and needing to update product availability across multiple eCommerce sites like Shopify or Amazon. Without automation, this process involves manually exporting inventory data from the ERP, reformatting it to meet the specific requirements of each platform, and uploading the updates one by one. If even a small error occurs—such as listing an out-of-stock product—it can result in overselling, unhappy customers, and costly refunds. 

Let’s put a cost on this. Assuming your Order Operations Manager is paid $75,000 annually, and they spend 3 hours a day manually updating the ERP and eCommerce platforms, this adds up to roughly $108.18 per day. Over the course of a year, this amounts to $28,181.08 just for handling manual updates. 

Increased Costs

Manual processes are labor-intensive and often carry hidden financial costs. Many businesses fail to fully realize the impact of manual data entry, which includes not just the labor costs of hiring staff to manage the data, but also the significant resources required to fix mistakes. A single error in order fulfillment—like mispriced items or incorrect shipping addresses—can lead to costly mistakes such as additional shipments, refunds, or even penalties from trading partners. 

For instance, a supplier who ships the wrong product to a customer may have to cover return shipping costs, resend the correct item, and possibly offer a discount or refund as compensation. Over time, these errors add up, straining profit margins. 

Data Silos and Poor Visibility

Manual data entry can lead to fragmented and inconsistent information, spread across multiple systems, spreadsheets, or paper records. This lack of cohesion makes it difficult individuals within a business to access the most up-to-date or complete information. 

You may already be mitigating this with multiple systems; one for managing inventory, another for processing orders, and yet another for tracking shipments. Visibility into inventory levels becomes limited, making it hard to track product availability or anticipate stockouts. 

Stifled Scalability

As your business grows, so does the volume of data you need to manage. When relying on manual processes to handle this increase, the strain becomes unsustainable. Scaling operations manually often means hiring additional staff to input and manage the growing amounts of data, which results in rising labor costs. But the issue isn’t just the cost of more employees; it’s also the inherent risk of human error that escalates as data volumes increase. 

With more transactions to process, there’s a higher chance of mistakes slipping through the cracks, leading to costly disruptions in the supply chain. In addition to errors, the increased workload can slow down overall operations, making it harder to maintain the speed and agility required in today’s competitive supply chain landscape. 

Without modern systems to support this growth, manual processes can become a bottleneck, ultimately limiting a business’s ability to scale efficiently and meet the demands of a larger customer base or a more complex supply chain.

Calculating The Cost of Manual Data Entry

The hidden costs of manual data entry are often more significant than businesses realize. Small errors can quickly compound, leading to costly mistakes, wasted time, and inefficiencies that severely impact a company's bottom line.

Let’s consider a hypothetical scenario of a medium-sized supplier. Over the course of a year, this supplier processes 10,000 transactions per month, with an error rate of 4%, resulting in 400 errors monthly. At $50 per error, the business incurs $20,000 in monthly costs, or $240,000 annually.

Additionally, the Order Operations Manager, spending 3 hours each day manually updating the ERP system and eCommerce sites, incurs $28,181 in salary costs just for handling manual data entry. Further costs stem from fragmented data across multiple systems, making it hard to maintain accurate visibility. This lack of cohesion can delay order fulfillment, damage relationships with vendors, and lead to missed sales opportunities. For example, delays in inventory updates could result in overselling products, triggering costly refunds or customer dissatisfaction.

Manual processes also create inefficiencies in scaling operations. If the business is growing and needs to hire additional staff to handle increased data volumes, labor costs increase. Let’s say that hiring a new employee to handle the growing workload costs $50,000 annually. If the company is also processing 20% more transactions as it grows, that’s an additional $50,000 in labor costs each year, which can compound as the business expands.

In addition, the need to manually reconcile data between different systems increases the chances of making errors during this process. For instance, when inventory levels are manually tracked across separate systems, discrepancies can arise that may delay the restocking of popular items. These missed opportunities to keep popular products in stock can easily lead to lost sales, which might amount to $10,000 in missed revenue each month. Over a year, that’s another $120,000 in potential revenue lost due to inefficiencies.

Lastly, as a business scales, the risk of errors also rises exponentially. With an increasing number of transactions and manual processes in place, the likelihood of mistakes grows. For instance, if shipping addresses are entered manually into the system and there’s a 2% error rate in the 100,000 shipments processed annually, that’s 2,000 shipments that are at risk of errors like wrong items sent, leading to an additional $100,000 in corrective action costs annually.

In total, the combined impact of these inefficiencies—including error correction, labor, missed revenue, and shipping errors—could easily exceed $600,000 annually. This highlights the true financial burden of manual data entry. 

As supply chains become more complex and businesses strive to scale, automation offers a clear path forward. By reducing human intervention, automation minimizes errors, accelerates processes, and provides real-time visibility into operations—helping businesses avoid these hidden costs and unlock new levels of efficiency and growth. Investing in automation now can prevent these ongoing losses, streamline operations, and provide the foundation for a scalable future.

How Automation Transforms Supply Chain Operations

In an increasingly complex business environment, supply chain management has become a high-stakes challenge for businesses of all sizes. As we’ve discussed, when data volumes rise and systems grow more intricate, managing operations manually can be a costly and error-prone. 

Automation is the solution that businesses need to stay competitive, reduce operational costs, and scale efficiently. By integrating automation into supply chain operations, companies can streamline processes, eliminate errors, and unlock new levels of productivity.

How Automation Eliminates Manual Data Entry

One of the most burdensome aspects of traditional supply chain management is the reliance on manual data entry. With automation, data is transferred seamlessly between systems—ERP, EDI, eCommerce, and beyond to accelerate workflows.

Enable Real-Time Data Synchronization

In a manual system, updates can lag, causing delays in everything from order processing to inventory management. Automation ensures real-time synchronization of data across all platforms, giving businesses up-to-the-minute information on inventory levels, order statuses, and more. When an inventory item is sold or restocked, automation ensures that the changes are instantly reflected across all channels—eCommerce, ERP, and partner platforms—without any delays. 

Enhance Employee Productivity

Manual data entry can eat up valuable employee time that could be better spent on strategic initiatives. Instead of spending hours updating product listings or cross-checking stock levels, employees can dedicate their time to improving customer relationships, streamlining operations, and exploring growth opportunities. 

Scale Effortlessly

With platforms like OrderEase, companies can manage increasing data volumes without hiring more people to keep up with the workload. The system automatically processes orders, tracks shipments, and syncs inventory, all while maintaining accuracy and efficiency. This scalability enables businesses to expand quickly without increasing overhead costs or sacrificing operational speed.

Real-Life Examples of Manual Data Entry in Supply Chains

Scotts, a 150-year-old company, faced inefficiencies in their ordering process, relying on outdated methods like phone calls, emails, and faxes. This manual approach led to errors, delays, and time wasted that could have been spent on other important tasks. By implementing OrderEase's automated solution, Scotts was able to streamline their ordering system, allowing independent retailers like Barrie's Garden Centre to place orders online, access real-time inventory data, and gain better visibility into product performance.

The results included significant time savings, with Barrie’s Garden Centre reducing administrative work and freeing up time to focus on customer interactions. OrderEase also provided benefits like improved product awareness, informed purchasing decisions, and the convenience of ordering on the go via a mobile app. This shift to a more efficient, automated system eliminated the need for manual data entry, cutting costs, reducing errors, and empowering businesses to better serve their customers.

The Path Forward: Solving Manual Data Entry Challenges

While manual data entry may present significant challenges, the good news is that solutions are within reach. By taking the right steps and implementing the right tools, businesses can eliminate inefficiencies, boost productivity, and pave the way for scalable growth. With the right approach, the transition from manual processes to automated systems can be smoother and more impactful than you might expect. 

Here’s how to get started on the path to efficiency:

Assess Your Current Processes

Take the time to review your current supply chain workflows and identify where manual data entry is slowing things down. This assessment helps you understand where your pain points lie—whether it's handling inventory data, managing orders, or dealing with customer communications. Once you know where bottlenecks and inefficiencies occur, you can focus on those areas for improvement, setting yourself up for a more streamlined future.

Invest in Automation Tools

The next step is to choose the right tools that align with your business needs. Look for automation solutions like OrderEase that integrate easily with your existing systems, such as your ERP, EDI, and eCommerce platforms. By automating routine tasks, you can eliminate errors, ensure data consistency across all channels, and provide your team with the resources they need to focus on higher-level priorities. With the right tools in place, the benefits are immediate and far-reaching.

Monitor and Optimize

The journey doesn’t end once automation is in place. To keep your processes running smoothly, continuously monitor your workflows and look for opportunities to optimize. Use data and feedback from your team to identify areas for further improvement, and make adjustments as needed. The key is to keep refining and evolving your processes, ensuring that your business can keep up with growth and changing demands.

Why Automation is Essential

In an industry where accuracy and efficiency are paramount, manual data entry is no longer a viable option. Its impacts—higher error rates, increased costs, and inefficiencies—can derail supply chain operations and hinder business growth.

By adopting automation tools like OrderEase, businesses can eliminate manual data entry, streamline processes, and create a supply chain that is agile, accurate, and scalable. Ready to revolutionize your supply chain operations?

Let OrderEase help you take the first step. Book a demo today!