Between the shrinkage suffered
from pick and holds and lost
inventory resulting from spoilage,
damage and theft, these
companies fight a losing battle to
preserve an accurate and useful
tally of their goods. So why
conduct these types of
inventories? One reason is that
by staging physical inventories
each year, companies keep the
process fresh in people's minds
and "help" them remember
where specific stock is located.
Despite these gross inefficiencies,
they can't imagine moving to
cycle counts, because they
believe it would be too disruptive
to change.
We witness many warehouses
and distribution centers
operating like this. Their
employees typically need to
sacrifice an entire weekend to do
a physical inventory, which ends
up costing the company overtime
pay while being neither
particularly accurate nor useful.
Most companies
conduct an annual
"all hands on deck"
physical inventory.
The company – and
its employees – hate
them.
