20 July, 2022


Inventory accuracy is paramount if you’re going to offer high-quality fulfillment services. But why is it so critical, and how do you achieve it when accuracy is low?

Ever see a sale at the grocery store? It’s not always there because the manager was feeling generous.

Most of the time, markdowns happen because of inaccurate inventory decisions. Sometimes, all the manager can do is mark the price down and hope it sells. In many cases, it sells at a loss.

The good news for grocery store owners is that they can move their inventory around. But in order fulfillment, there are no grocery deals. Companies with inventory inaccuracies have to eat the costs.

The only way to avoid these costs is through prevention. And that only happens with an accurate inventory. Here’s how (and why) superior inventory management and tracking can change everything.


Without inventory accuracy, you could have the wrong lot numbers, the wrong on-hand balance, or misplaced items. It all adds up to confusion, work, and obsolescence. Don’t let this eat into your profit margin. It’s worth getting right with proper inventory management. To understand more about logistics techniques that can aid in inventory management, learn about transloading.

Inventory accuracy is about more than having an accounting of your materials. Inventory issues affect every other aspect of fulfillment. Without an accurate inventory, you can’t prepare for spikes in demand. You won’t even know that you should prepare.

Estimates suggest that inventory issues cost an estimated $1.1 trillion every year. Problems like shrinkage, stockouts, and the costs associated with overstocking eat into profit margins. Some companies don’t even know it’s happening.

It’s not all about saving money, either. If your inventory doesn’t match what the customer receives it reflects on your fulfillment processes.

It can get complicated. If a product comes in a pallet, for example, do you know what to do with it? Do you have to put it into a case before shipping? You have to answer these questions in your inventory. The end-goal: the customer receives the right product quickly. Inventory management helps ensure that happens as consistently as possible. Different types of warehousing can also impact how inventory is managed and its accuracy.

But true accuracy isn’t achieved simply because you have two systems in agreement. Accuracy means one of your employees can inspect the location of a product and find it. Is it in the right location? In the right quantity? With the right serial number? The right label?


The best way to improve accuracy is to use an advanced WMS, or Warehouse Management System. A management system will have tools for improved inventory accuracy already built-in. For example, even the proper tagging of inventory has improved accuracy from 63% to 95%.

Standardization is the key here. With the advancement in technology, there have been significant improvements in how technology has enhanced inventory management. The more standardized your inventory is, the easier it is to identify every product. As QAD notes, even something as simple as tidiness can have a dramatic impact on your inventory accuracy. Using different sizes on a single rack means that if something is the wrong size, it can fail to show up in inventory. As a consequence, it disappears from the system.

How do you know that you’ve made progress on upgrading your inventory system? There are a few variables you can watch out for, including:

  • Real-time inventory visibility. If your inventory isn’t accurate up to the current moment, it isn’t accurate. Real-time tools include barcode scanning, real-time inventory reports, web-based reporting for real-time data, and transaction history for every item.
  • Data warehousing and data mining. Inventory is, ultimately, about your data and how it’s organized. Comprehensive data warehousing and mining are requirements. Make sure you can view your inventory in a single location without sifting through disparate systems.
  • Transaction History / Order Status / Shipment history. Can you find these elements in your reporting software? Are they accurate? With barcode scanning, you can use the most recent scan to find inventory. The product should be right where history says it is.
  • Automated reporting. Web/email-based reporting can create automated reports with minimal input. This makes it easier for employees to review at a moment’s notice. They save time by avoiding digging through the information themselves.


What does order accuracy have to do with service? At first glance, they seem like two separate issues.

But consider that an efficient inventory makes staff more efficient. There’s less time-wasting (also known as motion waste) when staff members aren’t looking for missing inventory. Products go to the right people at the right time.

McKinsey report stated that “lean techniques” can also reduce costs. They can “save 20-50% in warehousing” and “up to 40% in transportation” costs. Says McKinsey: “The first challenge in optimizing warehouse operations is that there is no standard.” Simply having a standard in place is a step forward. The result is a system that makes sense. For staff, it means a more efficient service.


An accurate inventory also means that there’s minimal guesswork. You’ll make the entire fulfillment smoother for the end-user.

When a major industrial equipment manufacturer approached WSI looking to streamline their distribution system, they found that inventory accuracy had powerful effects on the entire operation. WSI implemented RF scanners to identify orders and pull items from inventory. Every facet of the inventory management system was fully integrated with billing.

The results? Reduced obsolescence and improved delivery efficiency. This saved a truck’s worth of inventory for every four they used before. The savings added up to about $8,000 per month.

Customer satisfaction comes down to accuracy, speed, and service. It’s tough to achieve all three without an efficient inventory system. With proper inventory management, life gets easier. Better pricing, fewer returns, and time-to-fulfillment all affect the customer’s perspective of your company. The way your company handles even the smallest things is how it also handles its biggest priorities. And it starts with knowing where your inventory is.

At WSI, we achieve a high retention rate among public warehouse clients (nearly 100%) because we understand what inventory management can accomplish. Find out what we can do for you by getting in touch with us today.

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