The Importance of Accurate Inventory and WMS

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By Published On: January 13, 20200 Comments

Inventory is a process that takes a little bit of time to get under control. Whether your e-commerce company has a garage full of stock or an entire warehouse, it's imperative that brands have a secure and up-to-date system that accurately reflects the stock levels. So, what happens if your inventory system isn't the best it could be, and what does that mean for your business?

In short, if a company doesn’t have a proper inventory platform, it can lead to theft, customer complaints, lack of control in multiple locations and prevents accurate record keeping. Ultimately, it’s one of the most significant parts of running a successful e-commerce business.

For example, if an e-commerce retailer sells T-shirts, the inventory system can track the import of cotton, manufacturing tools, packaging materials and other essentials. Then, it keeps a record of the individual stock in the warehouse (or stores if you work with brick-and-mortar). It ultimately monitors the movement of all stock, so customers can be sure if the items they’re after are available.

Critical Ways of Improving Inventory Accuracy

    1. Establish and Inventory Department

      It goes without saying, but ensuring there is a dedicated team that tracks and reports the inventory system is essential for a successful business. Off course, SMEs may not have this luxury, so you could train a member of staff to be responsible for this, along with other tasks. They should identify and implement ways of keeping the inventory accuracy high, identifying inventory shrinkage, reduce paperwork and correcting backorders.

    2. Implement Cycle Counting

      Cycle counting is one of the most popular ways to count and track stock within a warehouse. This is an example of a sampling technique, where retailers count a certain number of items infers the count for the whole warehouse.

    3. Secure High-Value Products

      For retailers that offer high-value products, it’s imperative that they’re kept in a secure place, thus preventing inventory shrinkage and theft. Missing inventory (or products that ‘grow legs’) can occur as staff believe the stock has ‘gone bad’, gets stolen or broken. This can be prevented by installing a cage that securely holds these goods. Keep a record of these items, even if daily checks are necessary, to maintain accuracy and safety.

    4. Implement RFID

      There are plenty of pros and cons of implementing RFID to track inventory. RFID (Radio Frequency Identification) requires a scanner that uses radio waves to communicate with its RFID tag. This tag contains a microchip that allows the warehouse staff to read the date and update its location.


      Improved visibility and faster scanning: These trackers can be read from any angle and even at a distance.
      Tracking of returnable item: If your e-commerce company has a high turnover of returns, RFID allows you to track stock through its entire supply chain loop, which increases visibility.
      Reduced labour costs: Retailers with large warehouses can benefit from implementing RFID scanning. This is an automatic and ultra-fast way to keep track of stock, which counts, provides check-in and verifies shipment in a few scans.


      Security concerns: As with much Infrared technology, RFID is vulnerable to hacking, and therefore can be breached. Remote devices, such as mobile phones, can infiltrate the scanner and create clones of the product tag. To prevent this, it’s safe to keep mobile phones away from the RFID scanners altogether, which is a downside of the technology.
      Infrasture needs: It’s not simple tech t0o set up, which means there would be infrastructure costs that come along with it. This includes updating software systems to support the scanning, real-time asset tracking and, in some cases, completely re-doing the warehouse’s network and inventory management system.
      Expensive: As with the previously mentioned downside, investing in RFID scanning can be a costly procedure. From updating the current WMS to maintaining the process, it can be too expensive for businesses to consider.

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About the Author: Power Retail

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