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How to Improve a Warehouse Inventory System

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Inventory accuracy is a vital measurement of the efficiency and reliability of any warehouse. Incorrect or lost inventory can result in missed sales, incorrect purchasing decisions and poor customer relations. All of these factors translate directly to the bottom line, to the profit of the company. Improving inventory accuracy is a direct result of hard work, dedication and the implementation of proper procedures.

Perform cycle counts using the ABC method. Break your inventory into three categories, A being the fastest moving 1/3, B the second fastest moving and C the slowest 1/3 of your inventory. Cycle count all A items monthly, B items quarterly and C items annually.

Research all variances and resolve them quickly in order to reflect an accurate inventory level. Track and evaluate all variance for patterns or trends, then modify your training or order fulfilment method to help correct any deficiencies you might discover and reduce variances moving forward.

Track the productivity and accuracy of all staff. Precise records need to be maintained on errors and who they are attributed too. The purpose of this tracking is not to fix the blame, but to fix the problem.

Identify error prone employees and provide them with re-training or additional training. Every error made effects inventory accuracy to some degree and by reducing errors you increase inventory accuracy.

Institute a warehouse management system capable of tracking inventory at the carton level. Apply an LPN (Licence Plate Number) to each carton as it enters the warehouse.

Scan the LPN each time the product is moved or handled. This system allows you to monitor the inventory more closely and it develops a trail of who handled the product, when, and for what purpose. This can be extremely valuable information when attempting to resolve an inventory error.