How to Make Sure Your Inbound Freight is Perfect

At Verde, we manage millions of individual items of inventory daily. In doing so, it is inevitable that an inventory count will not come up correct, when we perform our weekly cycle counts. When we find just one item has the wrong quantity, we perform a very detailed inventory audit, which is documented in our Standard Operating Procedures. I’ll go into that in a moment. The important thing here is understand why inventory numbers can be incorrect. Here’s an inventory statistic for you: Over 60% of all inbound freight is not accurate. Why, you might ask, as I would too! Most of Verde’s inbound freight comes in from overseas factories, although more and more is starting to come in from elsewhere in the States. Not every factory around the world has the inventory control methods in place that we do. A master carton may be labeled as one SKU, but contain a different one. A master carton may say it has Qty 24, whereas there are only 23 or even 25. These small differences can cause major headaches with inventory management. Look at it this way: With a major retail store, you sell qty 72 of a particular SKU, which is qty 24 in each of three master cartons. If your warehouse does not physically inventory each item in each and every master carton, your major retail store may only receive qty 71 or less. This discrepancy is because the factory did not put the correct amount of that SKU in the master carton. If your warehouse doesn’t count each item in a master carton, then you inventory will be incorrect 60% of the time. Now, how does that make you feel? To make sure your inbound freight is perfect, at Verde we have an inbound process to help eliminate these inventory issues and ensure that you pay for only the inventory you received. 1. The inbound freight arrives at Verde’s facility. 2. We count each individual carton by hand. If the packing slip say’s 100 cartons, then we better count 100 cartons. If not, a claim is filed with the freight company and our client is immediately notified. 3. Next, we physically count the contents of 10% of the cartons. If there are 100 cartons, we physically count each individual item in 10 cartons. If there is a discrepancy between what the packing slip says should be in those particular cartons, we immediately notify our client. The next step is the critical one. 4. At this point, some companies say to go ahead and received the inventory into our system according to what the packing slip says. If we do this, there will be a 60% chance that the inventory will have issues further down the road, and usually right at a critical point of trying to sell the final bits of inventory (the stems and seeds). The better choice here is to always, always, always do a full and complete inventory of every single item as it comes into the facility. By not doing this, you are setting yourself and your company up for an inventory failure and headaches in the near future. 5. Once the inventory is accurately inventoried and received into our system, a cycle count (periodic counting of SKU’s) is done to ensure a correct count was completed during the inbound process. Other things you can do to help ensure your inventory is accurate is to have all inventory will barcodes on it. Barcodes with your UPC will enable your warehouse to quickly and accurately count inventory through the use of a mobile scanning device. One more thing you can do it be sure that your factory put very legible and accurate SKU, Qty, Box Count on each side of every master carton. The more information you give us, the better we can serve you and help keep your inventory 100% accurate.