Optimizing inventory accuracy: How a WMS can transform your operations

Without inventory accuracy, problems and confusion within the Distribution Center appear, potentially affecting the service provided to your customers. This could lead to losing a customer, if your service falls significantly behind your competitors.

Why Do Inventory Accuracy Errors Occur?

The origin of this problem lies in the lack of systemization in the Distribution Center. More specifically, the absence of an integrated system with real-time inventory updates. For example, if you have four inventory items but five people purchase them, you will inevitably disappoint a customer. Such situations arise when the various systems involved in the supply chain lack integration.

To understand why inventory accuracy errors occur, let's identify the primary processes within a distribution center and pinpoint the most common mistakes:

• Receiving: 

It's common for suppliers to deliver products in quantities different from those specified in the purchase order, resulting in shortages or surpluses of merchandise. Sometimes, merchandise may arrive improperly or require inspection or quarantine processes before becoming available. 

• Storage:

Incorrect placement of products can lead to inventory accuracy issues when they are stored in the wrong location. This can result in situations where merchandise cannot be found in the correct place, leading to assumptions of product unavailability and shortages in customer orders.

Additional complications arise with products with expiration dates. The expiration dates vary by product, so some products expire or become obsolete. Sometimes, stored products may become damaged, so they should transition from an available status to a damaged status, however, many times the product will continue to show in the inventory but is not usable.

• Picking:

Errors in the picking process directly impact distribution center productivity. There are several common picking errors, and if they’re not identified, they can increase costs and impact customer service. These include human errors in:

• • Product selection

  • Placement

  • Manual picking from paper sheets

  • Manual picking carried out by multiple individuals who create bundles without proper consolidation.

• Packaging:

Packaging is a crucial warehouse process to ensure product integrity and optimize order delivery costs. Knowing the weight and dimensions of packages before picking them is essential. This is only possible with a Warehouse Management System (WMS) handling logistical attribute. In large warehouses, coordinating picking and packaging operations efficiently requires a WMS.

• Shipping:

Shipping is vital for optimizing loading, unloading, and product delivery times. Without a well-mapped process flow, errors can occur, such as picking from different locations for the same orders, leading to incomplete orders that are noticed after the truck leaves the distribution center.

• Real-Time Information:

A WMS provides real-time information by tracking every movement within the distribution center. It offers step-by-step visibility of the entire process, from order receipt to planning and execution, allowing continuous customer updates until delivery.

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What Added Value Does a WMS Provide?

Here's how a WMS helps optimize inventory accuracy errors and the processes mentioned earlier:

• Receiving:

A WMS assists in configuring acceptable ranges for receiving from each supplier and validates received quantities, generating receipt documents against which supplier invoices are paid. Additionally, it manages merchandise status informing of pallet or box conditions and actual product availability.

• Storage:

A WMS suggests optimal product storage locations and ensures correct placement through location scanning or voice code verification. It provides real-time inventory visibility and ensures merchandise availability before picking starts, eliminating the need for returns or waiting for replenishments.

• Picking:

A WMS allows for planning and prioritized picking for specific orders, streamlining operations, and prioritizing time-sensitive orders. It's crucial in scenarios like counter sales, where quick order fulfillment is essential.

• Packaging:

With accurate logistical information, a WMS helps choose packaging units and enables direct picking and packing (Pick and Pack), optimizing resources and ensuring order integrity through cartonization.

• Shipping:

A WMS guides the process, ensuring merchandise is placed correctly, confirming loading onto the correct truck, minimizing errors, and ensuring order completeness.

• Inventory Control:

A WMS maintains inventory integrity and control. It facilitates immediate corrections for storage or product status errors and includes cyclic counting algorithms to verify product locations and statuses throughout the year.

Real-time inventory visibility and immediate communication of variations are vital to address the challenge of inventory accuracy errors. Achieve this with a Warehouse Management System (WMS). Please contact our experts for further guidance or with any questions.

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