Susan Lacefield has been working for supply chain publications since 1999. Before joining DC VELOCITY, she was an associate editor for Supply Chain Management Review and wrote for Logistics Management magazine. She holds a master's degree in English.
Inventory accuracy has always been critical to the smooth operation of a distribution center. Without reliable and up-to-date information, DCs face significant hurdles in their quest to fill orders swiftly and accurately, or achieve much success with their demand planning.
Lately, however, inventory accuracy has been receiving even more attention than usual. Both the move toward omnichannel retailing and an upsurge in regulations mandating that companies be able to track and trace their products (particularly in the food and drug industries) have raised the stakes where inventory accuracy is concerned. Sound real-time inventory data are also necessary for the effective functioning of programs like Lean or Just-in-Time production and for meeting ever-mounting demands to ship product faster. "It all puts a premium on inventory accuracy and inventory control practices," says Mark Wheeler, director of supply chain solutions for the mobile technology company Zebra Technologies.
Cycle counting 101
For many companies, cycle counting has replaced the traditional physical inventory count, which involves shutting down a facility or bringing people in during off hours to conduct a count. Although physical inventory counts are still favored by some auditors, they are tedious, time-consuming, labor-intensive, and inevitably inaccurate.
By contrast, cycle counting involves validating inventory accuracy on a continual basis, by counting a portion of the inventory at regular intervals. Cycle counts typically entail recording the type of product, the location of the product, and the quantity. They can also be expanded to include information like expiration dates, serial numbers, and lot numbers. The frequency of those counts will vary based on the velocity of the product and sometimes the value, according to Jeff Ross of Forte. Generally, it makes sense to count faster-moving and/or more valuable items more frequently.
To determine the optimal frequency for the counts and keep the database updated, most organizations rely on sophisticated software. This might be a warehouse management system (WMS) or a warehouse execution system (a hybrid of an WMS and warehouse control system) that can not only see what is on hand but also forecast demand for a particular item, according to Michael Howes, vice president of software engineering at Forte.
In many operations, particularly larger DCs, cycle counting is performed by a specialized inventory control staff whose full-time job is to count inventory each day.
As a result, there has been a renewed interest among companies in improving their process for counting inventory, the most common of which is inventory cycle counting. (For more on cycle counting, see the sidebar "Cycle Counting 101.") A 2013 study by Motorola (now part of Zebra Technologies), Warehouse of the Future, showed that 41 percent of warehouses use manual cycle counting to keep track of inventory levels. But that method can be slow, labor-intensive, and inaccurate.
One way around that is to conduct cycle counts using mobile technology, such as bar-code scanners, handheld computers, and voice systems. Just under one-third (32 percent) of the warehouses in Motorola's study were using real-time warehouse management system (WMS)-enabled mobile devices for that purpose. However, the number of users is expected to soar; the white paper predicts a "seismic shift" to automated and mechanized inventory solutions in the next few years.
BENEFITS OF GOING MOBILE
Those predictions of a seismic shift are not surprising, as the benefits of using mobile devices for cycle counting are many. Consider just a few:
1. Inventory information can be updated in real time. When cycle counts are performed manually with paper, the information is updated in the system in batches. "Any accuracies that you may gain are after the fact," says Bruce Stubbs, director of industry marketing at Honeywell Scanning and Mobility. Mobile technology, however, allows inventory information in the WMS or warehouse execution system (WES) to be updated immediately, enabling operations to be adjusted accordingly. "With mobile technology, you can make corrections right there at the pick face or inventory face so operations can continue with an understanding of what is happening in real time," says Michael Howes, vice president of software engineering at the integration firm Forte.
2. Counts can be made "opportunistically." While a "true cycle count" occurs when a worker is specifically tasked with counting all of the items in a specified zone or product line, mobile technology also enables counts to be made "opportunistically"—which occurs when an associate is asked to confirm how much inventory is left at a location where he or she is already working, according to Jeff Ross, vice president of consulting at Forte. A common example is a "zero confirmation," which occurs when the system shows an order picker has picked the last item in a slot and asks the picker for a simple yes or no confirmation. While opportunistic counts don't eliminate the need for other kinds of cycle counting, they do reduce overhead and improve asset utilization by allowing workers to conduct counts on the spot instead of making a separate trip. However, Ross suggests that these types of counts only be conducted for "low threshold counts," which he defines as two items or fewer. "You don't want the order picker counting 50 items, that would only slow him or her down," he says.
3. Problems can be researched and resolved more efficiently. Cycle counting doesn't end when the count is completed. According to Wheeler, it also involves researching and resolving problems discovered when the count doesn't match what's in the warehouse management or execution system. This might involve searching adjacent locations for the product, looking into where else it could be stored, or determining who was the last one to touch it and where it could have gone from there.
Mobile technology, such as a rugged handheld or industrial tablet, can help with this process by sending queries to the WMS to figure out where to look first to solve the problem—and doing it in real time. That's important because while this search is being carried out, the location will have to be "frozen" (meaning no product can enter or leave), according to Wheeler. "Any time you freeze a location, you are disrupting the flow of materials in the operation and you may be impacting customer orders, so the more quickly you can get things resolved, the better," he says. Mobile technology can help speed up the process.
CHOOSE YOUR DEVICE
As for what technology to use for cycle counting, all of the mobile devices currently employed in the warehouse—handhelds, wearables, voice units, and tablets—can be pressed into service, with each having its strengths and weaknesses. The type of organization, product, and who is conducting the count will all factor into the choice of mobile device, according to Chase Sowden, supply chain architect at Barcoding Inc., a supplier of mobile technology. What follows is brief description of the types of mobile devices that can be used and some of the advantages they offer:
Handheld devices: Mobile computers with bar-code scanning capabilities allow the user to scan bar codes for both the location and item, and then key in the count. The scanning ensures that the worker is counting the right item at the right location.
In addition to bar-code scanning capabilities, some companies configure their handhelds so they can perform RFID scanning as well. When it comes to counting items swiftly, nothing beats RFID because RFID doesn't require line-of-sight reads, according to Wheeler. Stubbs, however, believes that RFID scanning is best reserved for special circumstances, such as cases where you are picking "eaches" (individual items) and an RFID tag is already associated with each item for tracking purposes.
Wearables: Scanners that are worn on the wrist or finger (as opposed to being carried) also work well for cycle counting. Among other advantages, you never have to set the device down, and you can reach into a location or slot to move items around while you count, Sowden says. He does warn that wearables tend to have a small display, limiting the amount of information you can see. But Wheeler doesn't see that as an insurmountable obstacle: a wearable can always be connected by a tether to a handheld or by Bluetooth to a handheld or tablet device, he says.
Voice: Voice systems are considered to be particularly well suited to cycle counting, especially when the cycle counts are being interleaved into the picking process. Counts can easily be confirmed with a voice command, eliminating the need to type in quantities and reducing the chances of data entry errors, according to Jay Blinderman, director of product marketing for voice system developer Vocollect. Also, because workers are not holding a device, they're more likely to reach into the slot to conduct their counts, making it less likely they'll miss an item. And because they're not looking back and forth between a screen and an item's location, they're less likely to count items in the wrong slot by mistake. Voice can also be used in conjunction with scanners and handhelds if companies need to confirm information such as lot or serial numbers, says Howes.
Tablets: Recent advances in industrial tablets—especially with regard to their scanning capabilities—have made them much more suitable for cycle counting than they've been in the past. "The advantage of a tablet is it has a bigger screen so it displays more information," Sowden says. "And if you want to look something up or check something in another program, it's easier to toggle between cycle counting and other software on a tablet than on a scanner or handheld."
According to Wheeler, tablets are especially well suited to conducting research associated with problem resolution, as they can quickly send unstructured queries to the WMS to help determine the root cause of errors.
No matter what device you employ, it's crucial not to overlook the most important element in effective cycle counting: the employees themselves. Sowden cautions that it's easy for employees to dismiss cycle counting as busywork and not take it seriously. Companies need to ensure that people on the warehouse floor buy into the process and understand the business case.
"It doesn't matter what the technology may be," Sowden says. "If people don't take ownership and understand the impact of inventory accuracy on the business and how it affects them, they won't get it right."
Senior Editor Toby Gooley contributed to this report.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.