Damaged inventory prevention better as there is no cure

You should read this if you have a problem with damaged inventory in your warehouse...and would like to fix it.

Damaged goods cost businesses in multiple ways – in some cases the knock-on effects can add up to more than the value of the item damaged. A damage percentage of 1/100 is high, 1/1000 is OK and the benchmark to which companies should be working towards is 1/10,000 or 99.99% of goods going through the warehouse should do so un-damaged.

This article will focus on ways to prevent damages and the other costs associated with processing them.

1. Operators mis-handling, crashing and incorrectly stacking goods - all preventable causes of inventory damage. With an inventory management system each warehouse operative logs in to the barcode scanner that they are using (see screen-shot below right).

Inventory software login

A record is kept of who has touched an item and when – making identifying who is responsible and understanding how damages have occurred easy.  This means preventative action like operator training can take place.

2. Damage to inventory often happens before it reaches you. A two phased approach to taking goods-in is best practice for preventing damaged inventory from suppliers being accepted - avoids any potential disputes with suppliers in which faulty, damaged or tampered goods are accepted through the dock-door before damage is spotted.

  • Do a visual check on all of the items that have been delivered before they are ‘accepted’.  Look for obvious damage such as crumpled corners. Beware of signs packaging has been tampered with - unauthentic seals, re-sealing and finely ‘knifed’ corners and edges. A barcode device with a 2D imager is often employed to record damaged inventory at goods-in.
    • Once any damaged inventory has been identified ‘accept’ the goods through the door. Reconcile the goods received against the delivery note and purchase order.3. Damaged inventory can also enter the warehouse in the form of customer returns.
      • Provide customers with access to an online system through which they can log returns (see screen-shot right). Each returned item can be issued with a uniquely serialised return ID for referencing and is categorised by why it has been returned.
        • Provide a downloadable returns form (see below) that they fill in and send back with the inventory they are returning. This form can be printed with the uniquely serialised return ID.
          • This enables returned goods to be scanned on arrival. Instructions can be given by return category e.g. faulty product, wrong size chosen.

4. Quarantine can be used as a stock status for damaged inventory.

Where inventory is issued with uniquely serialised barcodes stock items can be quarantined by using a ‘Quarantine’ function within inventory management software.

Operator scans item and presses a button to alter the status to ‘Quarantined’. If another operative comes to pick the item the software will block them from doing so.

This stops damaged items being sent out to customers by mistake and removes the ‘Quarantine’ location within the warehouse that can be an inefficient use of space.