After speaking to several NetSuite customers about their main goal in the warehouse, it’s almost unanimous: Higher customer satisfaction. In every case, this leads right into inventory accuracy. You want to get as close to 100% accuracy as possible to ensure happy customers. So what is inventory accuracy?
Inventory Accuracy is simply “Trusting that your inventory is on-hand when you need it, with the right quantity and in the right location.”
But why does this simple idea plague so many organizations worldwide? From our experience with over 2,000 NetSuite customers, it’s near impossible to operate accurately in a warehouse when manual or paper processes are in place. Paper-driven processes leave room for human error and serve as one of the main obstacles to an improved accuracy rate.
Are you experiencing any of these pain points from manual processes:
- Data discrepancy between what is on the floor and what is in your ERP
- Employees retracing their steps through the warehouse, spending time remedying errors, having to look up data from a desktop computer, or spending time hunting for missing items
- Over or under promising product to customers
- Stockouts or carrying too much safety stock
- Shutting down all operations for several days to do a physical inventory count or painful audit processes
- Shipping incorrect order due to mispicks
- Trying to read handwriting to manually enter data into ERP
- Staff relying heavily on individual knowledge or having a dependence on excel spreadsheets or paper printouts
- Spending weeks or months on training of new employees
Steps for improving inventory accuracy
- If you're currently working with manual processes, your first strategy to improve accuracy is to minimize the amount of times you touch a product. The more you touch a product, the more likely it could be misplaced or entered into NetSuite incorrectly. To avoid this, eliminate unnecessary moves in your warehouse.
For example, if you're using overstock bins, you're moving your product 3 times - from receiving, to the overstock bin, to the picking bin. Using an overstock bin isn't wrong, but any time you move your product, you need to let NetSuite know what you've done. Paper processes create a gap of where the product actually is and what is recorded in NetSuite. If you've moved it from the overstock bin to the picking bin but haven't updated NetSuite, your picker can't find it, or worse - picks the wrong thing instead.
- Another key step is to make sure the description on the product and the pick slip match. Think through things like color, size and the physical description. Often times, your workers can't see what is in the box and grab items simply by what they see on the shelf. Taking the time to ensure these match can make the difference in a happy customer.
- Implementing barcodes in your warehouse is the next step. You should put barcodes on both your products and the bins where you'll be stocking it. Better than a description, your picker is now looking for the barcode number that matches his pick slip. He can identify the location (bin barcode) and product and ensure they match.
Most NetSuite customers work with retail products that already have UPC codes on them. In this case, you do not need a unique barcode. The UPC can be cross referenced in NetSuite, and the UPC code is now your identifier.
Download our whitepaper on the ROI on Barcoding with NetSuite
- Once you have barcodes in place, the last strategy is to put those to work for you with an Inventory Management solution. This leverages barcode scanners to prompt users through warehouse transactions - from receiving, to counting, to picking and shipping. If you select a solution that is built for NetSuite, this information is updated in NetSuite in real-time. You'll know what products you have in your warehouse, where they are, who put them there and when (and even how long it took to do it).
Adding Inventory Management Solution
3 ways an Inventory Management solution can increase accuracy:
- Eliminates the pesky time element. By scanning and updating NetSuite at each step, you are eliminating the gap of NetSuite being out of sync with the warehouse. When your picker goes to fulfill an order, he'll know it's been moved from the overstock bin to the picking bin.
- Verifies you are handling the correct product. Your system will prompt you to scan the barcode and then verify that matches what is in the system. You can ensure you are shipping the right item out to another happy customer.
- Know what you have and where. With an inventory scanning system, you've scanned everything that is received or moved in your warehouse. You can tell your customer you have it and have confidence that you. in fact, do. If you are an Amazon supplier, this is critical.
Lessons From A NetSuite Customer
GEM Products provides premium products to the marine industry and lives by the motto “As the sea is wide and the sky is high” when it comes to their customers. They have to surpass the stringent quality and longevity challenges to make their products shine and function in difficult conditions. In their old facility, there was no bins set-up, and they weren't tracking them to know precisely how much product was on-hand or how often bins were being replenished.
Moving into a new facility, GEM improved their warehouse processes, implemented bins, barcoded and labeled everything and implemented RF-SMART. They initially started with functionality like putaway replenishment, preferred bins, assembly work for light manufacturing, sales order picking, shipping and receiving. Once they started seeing a 30-40% increase in efficiency, even as orders increased, they began looking for new ways to expand mobility and automation across their operations.
Since implementing RF-SMART, GEM has made many operational gains within their warehouse:
- Preferred bins have improved picking efficiency
- Pick times reduced from 3 minutes to 1 minute
- Picking errors have decreased
- Increased line items shipped by 23%
- Increased packages shipped by 18%
- Invested in an automated storage retrieving system (ASRS). By integrating with Automation and Pick Planner, staff no longer have to wait in line to use and it has expedited picking process with full inventory oversight updating in NetSuite in real-time.
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