Here’s a fulfillment industry secret:
A 99% inventory accuracy rate isn’t as impressive as it used to be.
There are too many tools, too many technologies and too many 3PLs that have been doing this work for a long time for brands to accept anything less than near perfection.
But doesn’t Capacity tout its 99.99% inventory accuracy numbers? It’s right there in the headline of this article!
Yes. We do talk about it. Not mentioning it would be suspicious. But an inventory accuracy rate of 99% is table stakes. Said differently, if a 3PL’s inventory accuracy isn’t 99% or better, its days are numbered.
What’s more important, in our opinion, is what these accuracy rates actually mean to brands. How are they tracked? Is it process-driven? How much of it is powered by technology? How much are humans responsible for? Why does that even matter?
To those inventory accuracy questions and more, Capacity director of inventory management, Venu Muni, has answers.
Inventory Accuracy is All
Inventory accuracy is a simple concept with massive implications. It’s the difference between what’s physically in the warehouse and what’s recorded in the warehouse management system.
“When those two match perfectly, everything downstream – from picking and packing to customer delivery – runs smoother,” says Venu. “Fulfillment moves faster. Orders ship on time. Customers receive exactly what they ordered when they expected it. That, in turn, builds trust between us and our brands. That trust is built one count at a time.”
But why does trust matter? Shouldn’t a brand just want their 3PL to do what it’s supposed to do?
The answer is obviously no. Trust between brand and 3PL should always matter, especially when there’s market uncertainty. It matters when a brand has a viral moment and their 3PL can rise to the occasion. It matters where there’s a hurricane, a pandemic or any other number of curveballs a brand might encounter.
When there are bumps in the road, our track record is what helps our brands trust our recommendations. Consistently accurate inventory numbers are a big part of that track record. We aim to have the highest inventory accuracy.
Capacity’s Approach to Inventory Accuracy
“Technology plays a role, but our real difference comes from people and process. We’ve built a culture that values doing inventory right,” says Venu. “Our standard operating procedures, our training, our teamwork… It’s all designed to deliver consistency and confidence for our clients.”
Every step of a count is outlined. Before each physical inventory, the team coordinates closely with clients to pause inbound and outbound activity, ensuring every item can be verified accurately.
“Sometimes clients are hesitant to stop their operations for a few hours or days, but it’s the only way to get truly clean data for wall-to-wall physical count,” says Venu. “And because we plan everything in advance, the process is smooth and predictable.”
Every team has a role to play to keep Inventory accurate, especially during a physical count. Operations. Client services. Engineering. “Everyone is a part of the process and everyone knows what to do and when to do it,” Venu says. “That’s what keeps us consistent.”
A key part of that process is our adherence to blind counts.
“With blind counts, our people cannot see what numbers the system is showing. This inherently removes count bias, “says Venu.
Not Familiar with Count Bias?
Inventory count bias occurs when human confirmation bias causes an individual to record what they expect the inventory count to be rather than the actual physical quantity.
This can happen for a number of reasons. If an inventory specialist knew that they were within a couple units, they might say, “Eh… Close enough.” Or, perhaps they’re tight on time and use the system count to estimate the actual remaining quantity.
At Capacity, our process also includes multiple verification steps. If the first count doesn’t match, we recount. If that still doesn’t align, we do a third count and audit each step. We never settle for “close enough.”
On a day-to-today basis, the inventory team safeguards the health and accuracy of client inventory, identifying, investigating and resolving discrepancies and variances. The team also coordinates to identify damaged products, guaranteeing that only saleable items are available.
“By keeping our finger on the pulse of each client’s inventory, we’re able to ensure that the right products are available in the right condition, at the right location,” says Venu. “That directly impacts client operational efficiency and profitability.”
Consistency, Consistency, Consistency
At Capacity, our inventory team has more than 35 inventory specialists across our New Jersey, Indiana and California locations. They’re trained in the same methods, follow the same documentation, adhere to the same communication protocols and work with the same purpose.
“Our people take pride in what they do,” Venu says. “Some of them have done over a hundred physical inventories. They know what to look for and they care about getting it right.”
That consistency matters most when brands hit major milestones like new funding rounds or acquisitions.
“We’ve had clients go through acquisition processes where their inventory had to be audited by the buyer. The feedback from those audits is always positive. Our clients and their auditors are impressed by the precision and transparency of our process.”
Staying Accurate Through the Peak Season
With peak shopping periods like Black Friday and the holidays, order volumes surge. Those surges can increase the likelihood of inventory discrepancies.
But Venu’s team plans ahead.
“We train our teams to stay vigilant during those times. We do targeted cycle counts on high-moving SKUs and double-check areas that see the most traffic.”
But errors do happen. (Any 3PL that tells you otherwise is taking you for a ride.) In those moments, it’s all about quick identification and fast correction so that something small doesn’t balloon into something bigger.
“We track everything. Sometimes a product is misplaced or a quantity is off, but our cycle counts and reports flag it before it becomes a bigger issue.”
Everything Accounted For
Brands want peace of mind. They want to know that their fulfillment partner has every order and every item accounted for. That’s how everything else happens as expected. That’s how trust builds. And for Venu and her inventory team, that’s what it’s all about.