« You Might Have A Bad Warehouse…If It’s A Moving Warehouse! | Main | You Might Have A Bad Warehouse If…It’s A Bit Too Flammable »

You Might Have A Bad Warehouse…If The Cycle Count Doesn’t Add Up

By Kate Vitasek | 08/22/2011 | 5:00 AM

This week’s Bad Warehouse comes to us from Gary Roghers, Logistics Manager for DuraTech Industries. A few years back Gary transitioned to a new position, managing warehouse and shipping operations.

“It was the time of year for our annual physical count. This meant that we had customer service reps, office assistants, purchasing agents, shipping personnel and even janitors counting parts for an entire weekend. Everyone worked really hard and we completed the count and did the adjustments by the end of the day on Sunday.

“The problem was that our inventory was a bigger mess after the count then before we did it. The reason was that we had people working in an area that they either didn’t understand or felt that this was just a good way to pick up some extra overtime hours.” The accuracy of the finished goods inventory was around 85 percent, and the goal was about 95 percent.

“We had to fix this problem and fix it soon,” he said. He met with his shipping and warehouse personnel to discuss ways to: 1.) Fix the mess and 2.) Prevent it from recurring.

Eventually, they decided that to do a recount with the process owners—“the people who have to live with the inventory every day and who have to make those dreaded phone calls when the counts on an item are off. This would solve the first problem.

“Then we met again to determine a path that would allow us to keep the inventory on throughout the year instead of having it on for a little while in January.” They decided to do cycle counting on a daily basis, and roll through the entire warehouse every quarter.

Under the new process, Gary says, “We have hovered right around 95 percent for the past five years.”

He adds that “without a barcode scanning system in place and customers ordering in less than full package quantities we have a huge job of counting and the team pulls it off every quarter. My hat is off to this great group of people that not only came up with the plan to fix our problem but implemented it almost to perfection.”

Gary and his team hit on the best solutions to cope with the situation. They also followed WERC best practice guidelines by installing a system to count inventory on a cyclic schedule rather than once a year.

The WERC guide says that most effective cycle counting systems “require the counting of a certain number of items every workday with each item counted at a prescribed frequency.”  The main purpose of cycle counting is to "identify items with on-hand quantity errors, thus triggering research, identification, and elimination of the cause.”

Gary wound up handling a messy problem by solving it “by the book.”

I love your feedback - and love your contributions to share those bad warehouse stories to help educate the profession on what NOT to do, and maybe what to do if you’re not doing it.

If you've got an example of a bad warehouse practice, send me your story and photo(s) to[email protected]. If I feature your example in one of my blogs, WERC will send you a free copy of the WERC Warehousing & Fulfillment Process Benchmark & Best Practices Guide (a $160 value).

Your submission can be anonymous if you like so you don't get your boss or company in trouble! I'll be collecting examples all year and the winner will receive a free WERC Warehouse Certification Assessment by Supply Chain Visions, a $10,000 value. The runner up will win a free conference registration to the WERC conference (a $1,375 value).”

TrackBack (0)

TrackBack URL for this entry:



By submitting your comments, you agree to our Terms of Service.

The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

About Kate Vitasek

Kate Vitasek

Kate Vitasek is a nationally recognized innovator in the practice of supply chain management. Vitasek is founder of Supply Chain Visions—a boutique consulting firm specializing in supply chain management. She is also a faculty member at the University of Tennessee's Center for Executive Education. A prolific writer, Vitasek has authored the Council of Supply Chain Management Professionals' best-selling mini-book series, Supply Chain Process Standards, and has contributed to other management books as well. Along with Karl Manrodt of Georgia Southern University, she co-leads WERC's popular annual benchmarking study.

About Steve Murray

Steve Murray

Steve Murray is a Principal Consultant and Chief of Research for Supply Chain Visions, a boutique consulting firm specializing in supply chain management. Prior to joining Supply Chain Visions he held a variety of functional and management roles in the distribution and manufacturing sectors, including 15 year managing an IT consulting firm. Steve has been instrumental in development of the Council of Supply Chain Management Professional's "Supply Chain Management Process Standards", the Warehousing Education and Research Council's Warehousing & Fulfillment Process Benchmarking & Best Practice Guide" and the WERC "Warehouse Certification Program". He is lead auditor for the WERC's Certification Program.


Popular Tags

Subscribe to DC Velocity

Subscribe to DC Velocity Start your FREE subscription to DC Velocity!

Subscribe to DC Velocity
Go digital