Greater control and efficiency in modern warehouse management rests on the reliability and accuracy of your inventory management processes. Using the right WMS and cycle counting best practices can dramatically shape the productivity of your operation from slotting optimization to returns management and beyond. Warehouse Managers need to understand the challenges of cycle counting, how the right KPIs can help, and how to leverage WMS and cycle counting best practices to develop the best inventory management KPIs.

Challenges in WMS Cycle Counting

Managing a WMS and cycle counting is essential to reducing supply chain costs and fulfilling more orders. Managing a WMS in the world of eCommerce while maintaining stringent cycle counting practices derived from increased product volume and activity can create many challenges. These challenges include:

• Multiple SKUs.
• Increasing number of vendors.
• Greater demand for efficiency by stakeholders and consumers.
• Poor slotting practices.
• Lack of visibility into bin locations.
• Failure to track replenishment and procurement activities.
• Multiple locations and continuous operations.

The Right Cycle Count KPIs Make or Break Productivity

The right cycle Count KPIs can make or break productivity, and as explained by Shane Starr of Explore WMS, Warehouse Managers need to implement a process known as “skilled cycle counting.” Skilled cycle counting refers to reducing instances of documenting discrepancies, following up on issues that led to inaccurate cycle counts, enabling process improvement, and taking corrective actions to minimize the inaccuracies in the future. Achieving these goals requires the use of data to measure performance and accuracy in inventory management, so Warehouse Managers must develop robust inventory management KPIs to enable such improvements.

Which Inventory Management KPIs Are the Best?

Identifying the best KPIs for your facility can be a difficult task. Dozens, if not hundreds, of KPIs can exist for every activity. The distinction between typical KPIs and the best KPIs is that the best KPIs can be leveraged to reduce demand for physical cycle counts. This may include the use of a WMS to reconcile issues and prevent problems from arising in the first place. According to Paul Trujillo of Business2Community, the right inventory management KPIs must include:

• Inventory turnover. Warehouse Managers need to understand inventory turnover, and how it could adversely affect inventory levels.
• Carrying cost of inventory. The carrying cost of inventory KPI should also consider added expenses, like labor costs to manage inventory, insurance, and both packaging and shipping costs.
• Efficiency during receiving. Maintaining an inaccurate cycle count goes back to accuracy during receiving. Efficiency and accuracy should be tracked through a common KPI.
• Order picking and packing. Similar to the importance of accuracy and efficiency, and receiving, order picking and packing will affect inventory accuracy. As a result, Warehouse Managers may need to integrate picker performance metrics with this KPI.

Leverage Data With Full System Integration Now

The best WMS and cycle counting practices lack value if your organization does not understand how to develop and leverage inventory KPIs. Make sure your organization understands the challenges in WMS cycle counting and start working on developing proper inventory management KPIs today.

Veridian, a Manhattan Associates, HighJump, and JDA warehouse management system implementation company, can help you realize your supply chain success. Fill out the contact information below in order to schedule a consultation call with one of our supply chain professionals.