How to Improve Inventory Accuracy
Inventory accuracy is one of the most important aspects of supply chain management. Making sure that you know exactly what it is you have and where it’s located is critical to shipping orders on time and efficiently. Sending an order out for picking and packing only to find that a certain item is no longer in stock (at which point the customer needs to be called about a backorder) is something to be avoided at all costs. Here are a few ways to achieve greater inventory accuracy in your warehouses.
How to Maintain Inventory Accuracy
1. CONSOLIDATE INVENTORY INFORMATION
If you’re selling through multiple channels, including sales reps, a B2B eCommerce platform, a direct-to-consumer site, etc., and these transactions aren’t being collected and tracked in a centralized location, it can be extremely difficult to keep inventory levels accurate in real time. Consolidate your inventory information to stay abreast of what’s coming in and, more importantly, what’s going out at all times.
2. ELIMINATE CONFUSING CHARACTERS FROM YOUR SKU NUMBERS
It might be strange to consider what letters and numbers you’re using in your SKU numbers (as well as the fonts you’re using), but this can actually be a major source of confusion. Whether a lower case “l” gets confused for the number “1,” or a “5” gets mistaken for an “S,” there’s always room for human error when it comes to a mistyped data entry data point, or perhaps a case of bad handwriting on an order form.
3. DO A PHYSICAL INVENTORY
While digital inventory management and warehouse management systems can be a huge help in keeping track of your inventory and stock levels, you shouldn’t manage your inventory on electronic data alone. Every so often, be sure to take physical inventory. It is a painstaking, but necessary process to ensure that your digital systems are working (or to alert you to any potential problems, whether it’s theft or a process issue). Cycle counting––frequent evaluations that occur on a continuous basis––in particular can be an early warning mechanism.
4. MAKE SURE ORDERS ARE SUBMITTED ON A ROLLING BASIS
Inventory accuracy can be hurt simply by virtue of the fact that orders are submitted late. A common pattern is for sales reps to take orders throughout the week and wait until Friday to submit them to the back office––when they can get to a fax machine or sit down in front of their computers to enter orders. This results in a flood of orders arriving in the back office all at once. While it may have seemed like the company had plenty of widgets in the warehouse on Monday, it may become apparent on Friday that demand was high throughout the course of the week, and there is no longer enough product to fill every order. Inventory management is a critical business process for wholesalers, but it ultimately doesn’t have to become a huge drain on time and resources. With a streamlined order submission process, asset tracking systems, and physical counts, it can be a straightforward process that reduces headaches and improves efficiency across your business.