Tracking inventory solely within the four walls of a warehouse isn’t enough to stop shrinkage, says Eddie Misicka, vice president of product and solutions at OneRail.

When one thinks of inventory shrinkage, theft comes to mind, and that certainly accounts for a lot of missing items. Sometimes, however, inventory is simply misplaced or circulating somewhere in the warehouse, the store or in transit, and neither the shipper nor carrier knows its location, Misicka says.

A hand-scanning RFID process within the four walls of a facility goes back to a warehouse management system. That can be flawless, Misicka says, yet there’s still room for improvement. The shrinkage generally occurs once the in-transit leg begins, especially if there’s a transfer among several locations.

With traditional spot checking, the driver has a checkout list of inventory to be picked up. “They’re trying to compare physically what they have and what they're supposed to take,” Misicka says. “You’re putting that on the driver if they missed it, or even on the shipper's employees. So it's a black hole when inventory starts to move.” 

How costly is shrinkage? A recent OneRail survey found that two-thirds of the companies canvassed experienced losses between $100,000 and $5 million. Most losses didn’t surpass $2 million, Misicka says, but “it’s definitely a problem where it's hitting the wallets.”

Customer satisfaction is another major theme in the survey, and tracking can boost that greatly, Misicka says. The ability to pinpoint time of delivery and notify the customer is invaluable. “You want to be able to prepare a customer, give them a better ETA when they can expect it. You want to be able to set that expectation for the customers. That was one of the biggest findings that we saw as well.”

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