Benefits of Warehouse Management System Stock Counting

The key benefits of a warehouse management system: stock counting

Welcome to the fourth and final part in our series of blog posts on the Return on Investment (ROI) which can be realised from the implementation of a Warehouse Management System (WMS).

Welcome to the fourth and final part in our series of blog posts on the Return on Investment (ROI) which can be realised from the implementation of a Warehouse Management System (WMS) by Eric Carter, Solutions Architect, Indigo Software.  In this series I’ve looked at each of the key warehouse processes and shown you the impressive cost savings you could gain for your company by implementing a warehouse management system.


The blog highlights the non-productive times spent capturing data manually compared to automating the data capture process.  As Indigo has been around for over 30 years, we have extensive experience in demonstrating ROI and these blog posts will give you food for thought in terms of how you can save thousands for your company.


In this final ROI series post I’ll examine stock counting.  Read on as there are some stunning cost savings to be made.


Stock counting in its various guises forms a fundamental process within any WMS. Nowadays most businesses rely on the ability to count continuously i.e. perpertual inventory.  This method is by far the most effective as it allows the warehousing processes to continue whilst the counting is taking place.  Old style four wall counts, where the warehouse comes to a complete stop, have been typically consigned to the history books with a few notable exceptions.


Interleaving the counting transactions by priority within the warehouse operator’s daily task list ensures that effective count management can take place simultaneously.  Indigo’s Perpetual Inventory module allows count ‘calendars’ to be created be they monthly, weekly or periodically.  For example, in many businesses the picking locations are counted twice a month whereas bulk locations are required to be counted only once a month. This is absolutely right as the picking location is the most likely source of any stock discrepancies. The use of a Right First Time metric also ensures that the effectiveness of the count process can be measured over a longer term.  It’s no good counting if all you end up doing is correcting the counting errors – that in itself could cause a bigger issue.  Many of indigo Software’s customers have dispensed with yearly four wall counts by providing their financial auditors with the necessary audit trail proving count compliance, right first time indicators and user metrics.


As an example, one of Indigo’s prospects reported that they counted once a month. To do this it took 15 people in the warehouse two days to do the stock count. Furthermore three people took two days recounting and keying in the results of the count. This totalled 288 days each month equating to 3456 days taken a year to do 12 four wall stock counts.


Add into the mix the cessation of the sales order process whilst the counting is actually taking place means that the held orders need to be picked and despatched usually using expensive overtime payments.


Based on £7.50 pay per hour this was costing the business £25,920 per annum minimum.


It is therefore no surprise that in this case the ROI provided by Perpetual Inventory was a large proportion of the overall savings available.


And so concludes my series on the serious savings which can be made at each stage of the warehouse management process.  The figures speak for themselves and are proof that by investing in efficiencies in your warehouse you will reap considerable and pleasantly surprising benefits.

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