Cycle Count Program Design & Implementation for E-commerce Fulfillment Network
Comprehensive cycle counting program across 8 fulfillment centers achieving 99.6% inventory accuracy and eliminating annual physical inventory requirements.
Client Overview
A rapidly growing e-commerce retailer operating 8 fulfillment centers across North America faced persistent inventory accuracy challenges impacting customer satisfaction and financial reporting.
The company processed over 45,000 daily orders with 2.4 million active SKUs, experiencing 3.8% inventory variance rates that resulted in stockouts, overselling incidents, and customer service escalations.
Their existing annual physical inventory approach disrupted operations for 3-4 days per facility and failed to identify root causes of ongoing accuracy issues, requiring a sustainable perpetual inventory solution.
The Challenge
High Variance Rates
Persistent 3.8% inventory variance rate across the network resulted in 1,200+ monthly stockout incidents, 850+ overselling events, and $2.1M in annual customer service costs from order cancellations and expedited shipping.
High-Velocity Operations
24/7 operations with peak volumes exceeding 75,000 daily orders during promotional periods made traditional counting methods impractical. Required cycle counting approach that wouldn't disrupt picking, packing, or shipping workflows.
No Existing Program
Company lacked formal cycle counting procedures, trained personnel, or technology infrastructure. Required complete program design including methodology selection, frequency determination, resource planning, and WMS configuration.
Multi-Site Consistency
Eight facilities operated with different WMS configurations, storage methodologies, and operational procedures. Needed standardized cycle counting approach adaptable to site-specific requirements while maintaining network-wide consistency.
Our Solution
ABC Stratified Program Design
Developed comprehensive cycle counting methodology using ABC classification based on velocity, value, and criticality. A-items counted weekly, B-items monthly, C-items quarterly with dynamic reclassification based on seasonal demand patterns and promotional activity.
WMS Integration & Automation
Configured automated cycle count generation in Manhattan WMS with location-based triggers, exception-based counting for high-variance locations, and integrated blind counting workflows. Implemented real-time variance analysis with automated escalation protocols for critical discrepancies.
Training & Change Management
Trained 240 warehouse associates across 8 facilities on cycle counting procedures, mobile device operation, and variance investigation protocols. Developed standard operating procedures, quick reference guides, and certification program ensuring consistent execution network-wide.
Performance Monitoring System
Implemented comprehensive KPI dashboard tracking accuracy rates, count completion percentages, variance trends, and root cause analysis by facility, zone, and SKU category. Established monthly governance reviews with continuous improvement initiatives based on performance data.
Results & Impact
Key Outcomes
Eliminated Annual Shutdowns: Perpetual cycle counting program eliminated need for annual physical inventories, saving 24-32 operational days annually across network
Improved Customer Experience: Stockout incidents reduced 87% and overselling events reduced 92%, significantly improving order fulfillment rates and customer satisfaction scores
Root Cause Identification: Variance analysis identified 14 systemic issues including receiving errors, picking mistakes, and system configuration problems enabling targeted process improvements
Sustainable Operations: Internal team successfully maintains program 18 months post-implementation with continued accuracy improvement and reduced variance investigation time
"This cycle counting program transformed our inventory management. We went from 3.8% variance rates and constant stockouts to 99.6% accuracy with minimal operational disruption. The team didn't just implement a program—they built our internal capability to sustain it long-term."
Ready to Improve Your Inventory Accuracy?
Our cycle counting experts design and implement sustainable programs that eliminate annual shutdowns and drive continuous accuracy improvement.
