2nd CEO's memo Why Do Inventory Levels Go Awry? Let's Examine All Processes and Possibilities
One of the major issues faced by logistics companies is the discrepancy in inventory levels. Let's consider this problem based on my experiences in the logistics industry, focusing on both the software and warehouse perspectives.
【Purchasing Errors】
A common issue in logistics warehouses is purchasing mistakes. For standard products, errors are rare, especially when using JAN code management and QR code scanners. However, mistakes often occur with very small items or products that come in boxes labeled as containing ten units. I once encountered a cardboard box that was supposed to contain ten spray cans. The delivery slip also indicated "xx spray 10 units." However, I thought to myself, "This seems a bit light for ten units." Normally, I wouldn't do this, but I decided to open the box and check. To my surprise, it only contained six spray cans. I quickly contacted the sales representative to have them notify the customer. The point is, even if it says "ten units," you should not take it at face value, especially in a logistics company that requires precise inventory counts.
【Office Errors】
Once the logistics team completes their count, the delivery slip is passed to the office. Errors can also occur here. For example, the actual purchase might be "xx gum 120 units," but the office records it as "xx gum 12 units." The reverse scenario could also happen, indicating a data entry mistake in the office. Moreover, there might be cases of missed entries.
【Shipping Errors】
When an order is placed and shipping is confirmed, the logistics team proceeds with the dispatch. For instance, if a customer orders eight units of "xx juice," everything is fine if eight units arrive. However, we must also consider the possibility of mistakenly sending ten units instead. In this case, a very considerate customer might contact the company to return the excess two units with cash on delivery. However, this may not always happen. Alternatively, if a customer orders eight units of "xx juice" and only six units arrive due to a logistics error, normally, the customer would point this out. Yet, it's also possible that they might not notice or choose not to report it.
【Employee Theft】
While it's a topic I prefer not to dwell on, logistics companies must consider the possibility of employees intentionally stealing products. In such cases, inventory discrepancies are unavoidable. The only methods to address this are to enforce employee etiquette, install surveillance cameras, and ensure that theft incidents are reported to the police.
【Software Issues】
As someone involved in software development, it's a bit odd for me to say this, but discrepancies can also arise from software bugs. For example, if there is a problem with how inventory calculations are processed, it could lead to issues. In such cases, please contact the vendor promptly.
【Electrical Issues】
We must also anticipate situations where power outages could temporarily halt servers while using the software. To prevent this, we might consider using GPS power supplies or multiple servers. However, this can significantly increase costs.
【Virus Threats】
There is a risk of server databases being altered due to virus attacks. To mitigate this, one approach is to configure the server's data to prevent external exposure.
【Malicious Employee Manipulation】
This is another possibility (though I prefer not to think about it). Similar to the previous point, we should ensure strict moral education for employees. If there's a chance employees could directly access the database, we should implement a system that logs when, by whom, and for what purpose they accessed the database.
