Inventory accuracy measures the difference between recorded stock and physical stock. The measurement is a depiction of accuracy in a percentage. For example, if you have 100 units in your storage but your inventory management system counts 90, your accuracy rate will be 90%. According to research findings, the typical rate stands at 63%.
Inventory Accuracy Formula
The inventory accuracy rate is equal to the counted units divided by the units on record and multiplied by 100, to get a percentage.
How To Improve Your Inventory Accuracy
Do Regular Inventory Audits
In order to keep track of your physical inventory, is better to do regular inventory audits. By making sure that your counted units are the same as on record, you’re keeping your inventory accuracy at a high percentage.
Organize your Inventory Storage
Keeping track of inventory becomes simpler when it’s not hidden deep in the stockroom. Arrange your inventory in an organized manner for easy item location and counting during physical stock-takes. Here’s what you can do:
- Assign specific shelf space for each SKU.
- Implement a labeling system to maintain order.
- Group similar products together for easy access.
- Schedule regular stockroom organization days to keep things tidy.
By taking advantage of technology you can improve your accuracy rate. Over half of retailers use manual methods for supply chain logistics, which can lead to human errors. In order to enhance it, opt for barcode scanners or radio-frequency identification (RFID) technology. With RFID, each product gets a tag, and a scanner reads the tag, storing the information in a database like an IMS or warehouse management system (WMS).
Improve your Inventory’s Security
The main goal in order to better your accuracy rate, is to make improvements to the security measures concerning the inventory. The reason for enhancing security is to achieve more precise and reliable inventory records. In summary, by strengthening inventory security, you can ensure that your inventory records are more accurate and dependable. This is essential for preventing losses due to theft, misplacement, or other issues that might compromise the accuracy of your inventory tracking system.
Upgrade your Inventory Management System
To scale your business sustainably, having a dependable inventory management system is crucial. If your current system is too basic or lacks necessary features, it may be affecting your inventory accuracy. In this case, you should think about investing in an improved and well-connected inventory management system or an ERP system. This will help you maintain better control over your inventory and support the growth of your business in the long run.