.svg)
.svg)
Shipment acceptance and validations, whether at a distribution center, warehouse, or retail store, are critical components of effective inventory management. At this stage, you should be able to trust your records completely. Unfortunately, for many retailers, this isn’t the reality. Inventory discrepancies often arise due to poor shipment validation accuracy. In this blog post, we'll explore the importance of accurate shipment validation, the common challenges faced in this process, and how RFID technology can provide a simple and reliable solution.
Why Accurate Shipment Validation is Crucial
Accurate shipment validation impacts the entire inventory flow and is essential for ensuring the smooth and successful operation of the business.
Cost
Purchasing, storing, and transporting stock all come with costs. If you order a specific quantity of stock but receive less, you should charge back the supplier to avoid bearing the costs of stock you didn’t receive and can’t sell.
Additionally, if you’ve requested the distribution center (DC) to ship a certain quantity and type of stock from the warehouse to the stores, you must ensure they’ve fulfilled the order correctly. If not, they should be held accountable and required to correct the mistake.
Every item lost or stolen along the way carries its cost, not only in terms of handling and purchasing but also in the lost opportunity to sell it. Accurate shipment validation allows you to identify issues that cost your business money and address them, ultimately maximizing your profit.
Stock availability
If you plan to have a certain quantity of items in your store but receive more or less than expected, it disrupts stock availability. Maintaining proper stock availability is crucial for attracting customers and ensuring smooth sales. When items are unavailable, you miss out on potential sales opportunities.
Conversely, receiving more stock than anticipated can clutter the store and backroom, creating a poor impression on customers and making it more difficult for staff to locate items quickly.
Customer satisfaction
Stock availability is directly tied to customer satisfaction. Without accurate shipment validation, you may not even realize that items are missing, preventing you from replenishing them in time. As a result, customers may visit your store intending to make a purchase but leave empty-handed because they can’t find the item they want. This not only costs you the sale but also erodes the customer’s trust and loyalty to your brand.
Accurate decision-making
Stock accuracy is crucial not only for smooth operations but also for informed decision-making. It determines whether items should be replenished, where they perform well, and which products are more popular. When stock is inaccurately shown as available in certain locations, it can create the false impression that an item isn’t selling, when in reality, it’s simply not there. Accurate shipment validation helps ensure stock accuracy, which in turn enhances decision-making.
Common Challenges in Shipment Validation
While the importance of accurate shipment validation is clear, many retailers still struggle with it. But why?
In warehouses, particularly third-party ones, staff often can’t open large quantities of boxes to check each item individually, so they have to rely on the Advanced Shipping Notice (ASN). Unfortunately, the ASN often doesn’t match the actual contents of the boxes. As a result, distribution centers (DCs) send these boxes to stores as they are, trusting the ASN, and the mistakes go unnoticed until they reach the next stage in the supply chain.
Retail stores, on the other hand, receive shipments daily—sometimes even multiple times a day. The same store staff responsible for running the register and assisting customers are also tasked with accepting and validating stock, which can be overwhelming. In the best cases, they might check the number of boxes or pallets received; in other cases, they simply accept the shipments without any verification.
For retailers that validate items one by one, this process is often done manually through counting or barcode scanning—both of which are labor-intensive, time-consuming, and prone to human error. Additionally, these methods require extra staff, increasing operational costs.
How RFID Technology Enhances Shipment Validation
RFID technology comprises three key components: the tag, the reader/scanner, and the system. These elements work together to gather data and perform necessary actions seamlessly.
When implementing an RFID solution, you can choose to tag each item, box, or pallet based on your specific product needs and limitations. Unlike barcodes, RFID technology does not require a line of sight to capture data, allowing for quick, effortless, and highly accurate data collection.
Data can be gathered using RFID handheld devices that swiftly scan all boxes or items. Alternatively, RFID gates or tunnels can be implemented to automate the scanning and data capture process.
With RFID, warehouses and stores can scan items in just a few minutes without even opening the boxes. This enables you to identify inaccuracies, missing items, or overstock immediately, rather than discovering these issues long after the shipment has been accepted.
By using RFID technology, there’s no need to dedicate specific staff to inventory management. Instead, give your existing staff a handheld device, and they can validate an entire shipment in minutes, with up to 99% accuracy.
Accurate shipment validation is crucial for maintaining inventory integrity, maximizing sales opportunities, and enhancing operational efficiency. While traditional methods can be challenging and error-prone, RFID technology offers a powerful solution by streamlining the validation process. By leveraging RFID tags, readers, and automated systems, retailers can achieve near-perfect accuracy, reduce labor costs, and swiftly address any discrepancies. Adopting RFID not only resolves common validation issues but also supports smoother and more reliable inventory management, ultimately boosting your business's success.
