Tuesday, 6:40 a.m. A warehouse supervisor at a 62-person HVAC parts distributor pulls a bin for fan motors. The system says 140 on hand. He counts 89. That is roughly $9,300 of parts that cannot ship today, and three customers are already on the phone.
It was not one bin. Over the next week the team counted 4,800 items and landed at 78% accuracy. Read that again: for every five picks, about one was wrong.
Everyone blamed the warehouse crew. Wrong target.
These were not careless people. They had run the same racks for nine years on paper tickets and a lot of tribal knowledge. They were working around a process that made errors almost unavoidable.
The damage started at the receiving dock. Deliveries were entered into the system hours before anyone shelved them, so the on-hand number went up while the parts sat in a staging area nobody counted. Two large vendors sent packing slips that ran to a second page, and two different people would enter the same shipment twice.
Three changes that took accuracy from 78% to 96%
- Receiving got one door and one rule: nothing gets entered until the pallet is physically on the shelf. Any delivery over $2,000 gets a second set of eyes.
- Bin labels got a check digit, so A-14-3 and A-14-8 stop looking identical at a glance. Mis-picks on the top 200 items fell by more than half.
- Cycle counting started on the 40 fastest movers — five items a day at 7 a.m., before the first truck arrives. Not a once-a-year weekend marathon.
The result only finance noticed
Ninety days in, accuracy sat at 96%. Emergency air freight dropped from 31 shipments a month to 6, taking about $4,100 a month off the freight line.
The bigger surprise was overtime. Receiving had been staying late to “catch up on paperwork.” Once entries happened at the shelf, the paperwork disappeared, along with 22 hours of weekly overtime.
Almost none of this came from changing software settings. That is the uncomfortable lesson from a lot of ERP Consulting projects: the system records whatever your process tells it to record, mistakes included.
And if you are paying an ERP Consulting team, watch what they do in week one. If they open a configuration screen before they walk your receiving dock, you are about to buy a very expensive report.
Tomorrow morning, pick ten items at random, count them, and compare to the system. Then write down where the number drifted. Do that for five days and the pattern will point at the one process worth fixing first.