Imagine a scenario in which product X is located in four different locations (A, B, C, D) throughout the warehouse. You get an order for 15 pieces of product X. Location A is supposed to have 20 pieces of product X, but when you arrive at Location A, there are only 12 pieces remaining. Recalling that product X is also available in locations B, C, and D, you pick those 12 pieces from location A, and pick the remaining amount from location B in order to fill the order on time. Once that order is filled, you are immediately assigned a new order and you forget to notify someone that location A was low in stock – and is now empty – and that you took some stock from location B. It may be days or weeks later before the inventory issue is discovered, and by that time, the problem may have spread to the remaining locations!
Pushing through orders without making the appropriate inventory transactions is a sure way to make your inventory inaccurate, and it increases the counts you have to do for physical inventory. Educating your employees on the critical need for maintaining a high priority on accurate inventory is a great place to start.
You know the old adage of having a place for everything and having everything in its place? In terms of inventory management and warehouse efficiency, this is a cardinal rule. In the rush of a busy day, it is very easy for boxes to get misplaced or half-empty pallets to get stacked in a corner. Ensuring that product gets put on the shelf in the right spot will ensure that physical counts are as accurate as possible, decreasing the need for recounts. Train your workers to put things where they belong and teach them to understand that spending just a couple extra minutes putting things away can save hours down the line.
Misplaced overstock can trigger the need to redo physical inventory counts. When you have product overstock, it is important to track where it goes. Knowing where overstock is located makes it possible to get an accurate count with the first pass. This reduces excessive physical counts for inventory. Most warehouse management systems make it possible to track multiple warehouse locations for the same product, but when you are attempting to manually manage your inventory, it can get more complicated and run a higher risk for error.
This is probably "The One" that will stop excessive inventory counts the fastest. Cycle counting is an inventory management method where a subset of warehouse inventory is counted each day or week via an automated warehouse management system (WMS). This method allows for counts of the entire inventory within a cycle period (monthly, quarterly, etc.), and these small, incremental counts keep the inventory more accurate than an annual physical inventory of the entire warehouse will.
Even more accuracy is possible when you use warehouse management software in conjunction with cycle counts. The software tracks what inventory you should have on hand at any given moment, and as you cycle count you can compare it with what is in the software. It will help you identify if you have missing inventory or more product than the system shows. Solving small problems throughout the year will make physical inventory a breeze... and most likely make it completely irrelevant.
Each of these methods will either help you reduce the time spent performing your next physical inventory or completely eliminate physical inventories all together. As an added bonus, these methods will help you improve your warehouse efficiency.