Picking Errors Costing Business Millions Each YearMonthly inventory advice from the leaders in Inventory Solutions for small to medium businesses, IntelliTrack Inc. Find out how you can get a handle on, track and control your Inventory and Assets at www.intellitrack.net. September 2009 Inventory Tip: Get Picking Right!This is a true story. My wife and I remodeled our kitchen last year and we did a lot of the work ourselves. One of the tasks we took on was putting new hardwood into the kitchen and dining room. We ordered 500 square feet of Bamboo Flooring from a local distributor and set up a pick up date. We arrived at the floor distributor, wrote out a check and took the truck around back. The picker had the order ready and wrapped and dropped the load neatly in the back of the truck. It was a big pallet load! We quickly got back to the house and started unloading the truck and I was thinking it looked like we had too many boxes of flooring. It just did not look right. I checked my invoice and the order was for 56 cases with each case containing about 9 square feet. I counted the cases and we had 86 cases. The picker had loaded 30 extra cases of flooring at a value of a little over $800.00. The picker’s mistake was transposing the 5 into an 8 and the picker didn’t double check. In this warehouse, all of the picking transactions are done using paper invoice copies printed on a dot matrix printer and trusting the picker to do the job right! Immediately the little devil on my left shoulder started whispering in my ear to keep it. After all no one reports when we ship out too much. My ethics finally got the best of me and I pulled off the 56 cases, left the 30 cases on the truck and went back to the distributor. They were stunned of course that we returned the over pick and when I asked them about their shrinkage and unaccountable lost inventory they estimated a little over $200,000.00 a year. This is not a large company but they were producing a large loss. To summarize, anytime you use paper-based system you open yourself to “human error” and “human decisions”. A barcode inventory system is a smart technology. These systems direct users in their activities and ask for validation. They have fundamentally altered the way knowledgeable companies operate by reducing loss, customer service errors and management frustration. Every company should investigate how barcode technology interfaced to smart inventory software that can help you curb your losses. -Will Daniel, COO IntelliTrack, Inc. |
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