1. Assign a code to each location
Warehouse inventory is controlled by location, not by product. Every place that can hold goods needs a unique code, printed on a label that a scanner can read. A common scheme combines zone, aisle, rack and level: A-05-03-2 is zone A, aisle 05, rack 03, level 2.
In addition to storage locations, the warehouse needs locations for goods that are not yet in place: receiving, outbound, returns and quarantine. With these locations, every item has a recorded location.
2. Receive against a document
Every receipt must be compared with what was expected: a purchase order, a transfer or a return. Receiving without a document forces the warehouse to rely on the supplier's packing slip. Receiving is also where the data needed later to control outbound goods is captured: lot, expiration date and serial number.
Two rules prevent most inbound problems: a tolerance that blocks receiving more than was ordered without approval, and a minimum shelf life that rejects lots close to expiration.
3. Record the put-away
Received goods must reach a location, and the record must state which one. Put-away is the step most often skipped: the product is stored wherever there is space, and the system still shows it at receiving. A scan of the destination location keeps the record and physical stock in agreement.
4. Validate every pick
Picking is the source of many discrepancies: stock is taken from another location, another lot or in another quantity. A printed list does not detect these errors. A scan of the location and the product, compared with the allocation, does. When the product has an expiration date, the outbound rule should be FEFO: the lot that expires first ships first.
5. Count in parts, frequently
Counting the entire warehouse once a year stops operations and finds discrepancies when their cause can no longer be traced. A cycle count covers one zone or group of locations at a time, without stopping the rest of the warehouse. Locations with more activity or higher-value products are counted more often.
Each count must separate its results: matches, overages, shortages and products found in another location. Each type of discrepancy has a different cause.
6. Approve adjustments
The person who counts should not adjust. An adjustment changes the inventory and must be made by a person with authority, with a recorded reason. An adjustment without a reason corrects the quantity but removes the information that explains the discrepancy.
7. Keep a complete stock ledger
The stock ledger is the movement history of each product: each receipt and each issue, with its origin, destination, user and document. When a discrepancy appears, the stock ledger allows the warehouse to trace the movements back to the one that does not match physical stock.
Common errors
- Moving goods temporarily without recording the move, for example to clear an aisle.
- Using the same location for two products without recording it.
- Entering quantities in a unit other than the system unit, such as cases instead of units.
- Leaving returns on the floor without inspection or status.
- Correcting discrepancies with adjustments without investigating the cause.
The guide inventory discrepancies describes how to detect and prevent each one.
When to move from a spreadsheet to a system
A spreadsheet can track the inventory of a small warehouse with few people and no lots. It stops being sufficient when several people record movements at the same time, when products have lots or expiration dates, or when the company needs to know who made each change. The comparison WMS or Excel details those limits.
How Chainlink WMS applies these controls
Chainlink applies the seven controls in every plan. It generates locations by range, receives against a document with tolerance and minimum shelf life, creates put-away tasks with a suggested location, validates picking with scans, counts by zone on the handheld even without a signal, reserves adjustments for an Administrative user and records every movement in the stock ledger. See counts and receiving.