american warehouse blog

Inventory Management: Cycle Counting Improves Product Visibility

It’s end of month. Do you know where your inventory is? Your WMS provides you data but unless your logistics provider has touched your products recently, you may not have the most accurate inventory counts. As a result, your revenue and loss reports as well as manufacturing recommendations may be inaccurate.

A regular audit of your units ensures the business decisions you make in regards to your inventory are being made with accurate information. Your logistics partners combat discrepancies in your warehoused inventory by cycle counting in one of two ways – passively or proactively.

Passive cycle counting-as you might expect-is done infrequently. Perhaps only at year end. If you’ve had little to no visibility into actual stock levels, your end of year write-off numbers might come as a shock.

By contrast, a proactive approach increases inventory accuracy, providing you visibility and flexibility in your supply chain. When your warehousing partner engages in frequent cycle counting, they can uncover inconsistencies in inventory levels much sooner, allowing for flexible problem solving, money savings and the chance to improve operations.

When discrepancies are discovered, your warehouser can trigger an investigation. With shorter cycles, errors can be quickly identified and corrected. Additionally, more frequent counts set benchmarks and inform metrics standards for inventory accuracy. When your warehouse partner improves their operational processes, you win too. Here’s a few other ways you can partner with your 3PL to increase inventory accuracy:

  • 1. Make product identification numbers highly visible
  • 2. Use barcode labeling
  • 3. Make labels visible and easily scannable (bigger is better). As a bonus, label units on all four sides
  • 4. High quality packaging can improve handling and reduce damage

Don’t wait until it’s too late to gain visibility into your warehousing operations. Ask your logistics partner how they dedicate resources to ensuring you have full visibility into your supply chain. If we at American Warehouse can help in anyway, please let us know.