How a Scan-to-Shipping tool helped us reduce inventory shrinkage

For those in the warehouse industry, from warehouse workers to warehouse managers, we all know mistakes will happen. What separates good businesses from great businesses is how they go about minimizing errors in the workplace; part of that process is choosing the right supply chain management software for your facilities – but more on that later.

As a Warehouse Manager in retail, one of the most common problems that can disrupt operations is inventory shrinkage, or “shrink.” Inventory shrinkage is when “live” inventory exceeds or falls short of the amount of inventory that is physically in the warehouse.

Avoiding shrink is one of the top priorities of a warehouse manager. Although human error will always be a factor with combating shrink, choosing to ignore the issue can make the difference between your business being profitable or not.



A few years ago I noticed a higher volume of shrink errors in the warehouse. In the past our warehouse employees would pull an item, then manually delete it from our WMS. The problem was that occasionally someone would forget to delete items when they were pulled.

Typically this type of error would occur during busy times, when employees were working extra hard. An employee would be pulling many items at once and some would just get accidentally packed up and shipped before they were removed from inventory. And at the end of the day, the inventory system would claim to have more inventory than was physically there.

This problem did not always get noticed right away. Sometimes we found out a few days later, sometimes it might be a month or two; however, in both instances there was plenty of time wasted checking the zone where the item was supposed to be, as well as the areas surrounding that zone. Far too much time was spent looking for an item that simply wasn’t there.

After soul-searching and lots of meetings, we developed the idea of tracking items at every single step of the process. This warehouse management system would allow us to accurately follow the movement of items throughout our facilities. Additionally, we would take steps to streamline our processes in order to maintain efficiency. The creation of our scan to shipping tool is what blossomed from these discussions.

Increase Productivity

With the help of QR code labels and hand scanners, employees are able to scan the zone where the product needs to be pulled from, then scan that same product into a zone known as the “shipping zone.” Products remain in this zone (digitally) until the shipping process is complete.

The picked item will be ready to go through the pick ticket scan-out process, in which the item will be removed from the shipping zone after the shipping process is complete. For an item to be shipped out properly, it must be located in the shipping zone.

The Scan to Shipping tool has helped us in our pick and pack process immensely.

  • Using the data provided by the system, we’re able to find problematic areas and employees who require additional skills training. These employees are either moving too slowly or not adhering to our standard operating procedures. Managers and supervisors are given access to know who, what, when, and where inventory is accessed, providing greater accountability to warehouse staff, as well as the ability to create custom reports based on that data.
  • At the end of a shipping shift, we can check the “shipping zone.” If there are items still left in this zone it means that either a item was left out during shipping, or an item wasn’t properly scanned out during the shipping process. This allows management to identify employee inventory and shipping errors before they escalate into bigger problems.
  • Instructing and implementing this procedure was simple and easy. This allowed us to keep up production without squandering time with methods that were far more tedious.standard-operating-procedure-sop 12_16_19

Maintaining a clear and concise SOP (standard operating procedure) is vital in reducing shrink, but utilizing the correct warehouse management system (WMS) is equally important. Take into account what services are offered by different warehouse management systems in order to ensure your specific business needs are met. If you do not have the technology to accompany it, your business can run into similar pitfalls that our business went through.

Having issues with your warehouse management software? Looking for your first WMS? Need advice on ways to improve your warehousing processes? Visit our website or send us an email at