How do I test the accuracy of a 3PL’s inventory counts before I buy?

Inventory accuracy is the product a 3PL sells. If the counts are wrong, clients lose trust and claims follow. Begin with a sample test in both directions. Choose products and locations from the system and check that the stock is there in the right quantity. Then choose items from the shelves and check that the system knows about them. Do this in different zones, including the oldest corners and any overflow area. Note how long each count takes.

Next, study the history of adjustments. Ask for reports on cycle counts, write-offs and corrections, and for client reconciliations that show whether clients agree with the numbers. Ask how often counts happen, who does them and who approves a change. A pattern of frequent corrections for one client or one area needs an explanation.

Look at the process, too. How are items received, labelled, moved and picked? Where do mistakes happen? Ask for examples of disputes and see how they were settled. Have your accountant look at how inventory values flow into the books, especially for goods held for clients, which should not be counted as the 3PL’s own stock. A physical count near closing is a common protection. Ask the seller to explain the largest past corrections.

Key takeaways

• Test counts both ways, from system to shelf and shelf to system.
• Study cycle-count results, adjustments and client reconciliations.
• Keep client-owned goods out of the seller’s own inventory figures.