Should Your Fulfillment Center Be Striving for 100% Inventory Accuracy?

Published : July 15, 2015

inventory_accuracy

Everyone in your company has likely experienced the difficulty of inaccurate inventory—from the warehouse picker staring blankly at a bin that shouldn't be empty to the customer service rep explaining to distressed customers that their items are backordered. It's a natural part of doing business, right? Not entirely. Inventory accuracy may be a moving target, but it doesn't mean you can stop aiming for it.

Want to know how to get close—or even within—that coveted bull's-eye in your own warehouse? Try these scalable tips, compiled from industry experts.

Determine an Accurate Starting Point

With nearly every industry immersed in the omni-channel movement, the classic once-a-week/month/quarter inventory assessments just can't keep up. The methods used to implement the one-and-done approach are equally troublesome. Either you're pulling in an inventory team to pull an all-nighter, shutting down for several days to get an accurate count, or trusting a third party company that is unfamiliar with your workflow processes to do it.

Each of these options contains an inherent bias or a single-set-of-eyes problem, which in turn means bad numbers on the rare inventory you're scheduling. Supply Chain Consultant Chuck Intrieri lauds the modern business' boon for inventory control: cycle counts. Used everywhere from retail franchise operations to massive component warehouses, this method gives a snapshot of different areas to allow businesses to assess and control their entire warehouse one slice at a time.

Once your starting inventory is accurately assessed, start a visible report—a whiteboard, a daily printout, an email or whichever method is most suitable for your workflow—to keep everyone working in the fulfillment center on the same path to the same goal.

Find the Leak

Inventory discrepancies always come from a root issue or issues, explains Larry Fast in Industry Week. Once you have your initial numbers, you'll need to return to them during your next set of cycle counts to see which areas suffer the most in terms of inventory accuracy. From there, your team can narrow down the "human elements" that could be contributing to the problem. An incorrectly labeled bin, lax security measures that allow individuals to wander in and out, even product damages from storage conditions can end up as culprits.

If you find major problems across the board, it may be time to invest in new tracking or labeling systems, such as RFID tags or mandatory barcode scans, in order to give you a better idea of your stock movement.

Move Towards 100 Percent

Once you've gotten a solid idea of your existing inventory accuracy, researched and addressed problems and have at least 2 comparison cycle counts to refer to, it's time to kick it into high gear.

Post your periodic counts and percentages in a place where all warehouse employees can see them, communicate often and clearly with other company employees who depend on that accuracy and mention your goals prominently in any meetings. While 100 percent may be elusive or difficult to maintain over extended periods, your goal should fall between 98 and 100 percent.

In an age of high-tech WMS, real time transport information and unprecedented vendor and sales data, there's no reason this can't manifest into a reality for your workflow. Keep your inventory processes as simple as possible, and your team should be enthusiastically on board alongside you. 

As more and more digital feedback and monitoring is fed into the fulfillment industry as a whole, discrepancies will emerge with or without your team digging for them. Make sure you're ahead of the game by determining problems and addressing them before metrics have a chance to tell your tale for you. Remember, good business is about preventative action, not frantic reaction, and getting your inventory accuracy in hand is an excellent place to start.

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Topics: Supply Chain Logistics

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