SCDigest Editorial Staff

The first time many distribution professionals see an order picking performing a “count-back,” it seems like modern distribution thinking powered by an advanced Warehouse Management System (WMS) has taken two

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A key driver from the outset was the level of discrepancies that 3PLs and their consumer packaged goods (CPG) clients often have about inventory levels. Count-back emerged as a way to substantially eliminate those discrepancies, even at the apparent cost of some loss in productivity. What do you say? Send us your comments here

steps backwards. But they are wrong.

What is “count-back?” A process in which order pickers selecting full cases from pallet rack locations perform an immediate cycle count at the completion of the pick for that location, using a Radio Frequency or voice terminal.

The goal: eliminate what is often the largest contributor to inventory errors, the case picking process, especially for consumer goods manufacturers.

How: by both prevention and error detection. Since order pickers know they will have to complete the cycle count – and have to take time to reconcile any errors that the cycle count shows - they are more careful in terms of case pick count accuracy, and apt to leave nice, orderly pallets that make cycle counting easier, rather than the traditional sloppy pallets found in the case pick area in most companies. If they do happen to make an error, the cycle count should pick up the discrepancy right on the spot.

The conceptual challenge: Count-back seems to some distribution pros like non-value added work that shouldn’t be necessary with the right WMS and supporting technology, such as RF. Productivity is certainly lost if pickers must stop to do a cycle count after each pick, rather than just moving on to the next location.

But that’s a short sighted view says Ken Miesemer, now a Senior Project Manager at St. Onge, and formerly Director of Distribution and International Logistics at Hershey.

(Distribution and Materials Handling Article - Continued Below)

Benefits of Count Back in Case Picking

The precise genesis of the count-back concept is not clear, but it has been used by Kraft Foods for a number of years. Hershey heard about the idea from Kraft, and ex-Kraft employees also took the idea to ConAgra. It has subsequently migrated its way to other companies around the globe.

A key driver from the outset was the level of discrepancies that 3PLs and their consumer packaged goods (CPG) clients often have about inventory levels. Count-back emerged as a way to substantially eliminate those discrepancies, even at the apparent cost of some loss in productivity. Another key benefit is reducing discrepancies at customer receipt.

“Over, shorts and damages” (OS&D) are a serious problem for most CPG companies, whether they run their own distribution centers or use a 3PL, says Miesemer – and case picking is often at the core of the problem.

“The use of the count-back program is just one component of being able to prove perfect order picking and the highest degree of inventory accuracy,” he observed.  “At Hershey, we combined the count-back process with an RF generated “pick with pride” label. That was then combined with a load manifest to prove that you loaded the pallet and where it was on the trailer. The manifest would give the pallet ID, who picked it, who loaded it, where on truck it was placed, and what were the contents. With that foundation, you can start to address the customer ship-to locations that are robbing you blind with reported shortages.”

Miesemer says that observers looking at only the small incremental effort to do the quick cycle count are missing the big picture.

“If you only look at the warehouse process and look at the time for count-back, you might say it is not worth it,” Miesemer said. “But if you can use the process to solve overall supply chain issues (OS&D loss) or to deliver supply chains savings, such as by certified receiving at the customer, now I would say you are crazy not to do it. Can you imagine if receivers know your process is in control and receive the load off your load manifest rather than sort, segregate, count, etc., with a pencil and paper?”

Warehouse Management System Support

Despite its adoption by several large consumer packaged goods companies, the count-back approach is still relatively unknown. That means it does not enjoy widespread support from Warehouse Management System (WMS) vendors.

WMS systems for a long while have generally had the capability to generate a cycle count when there is an opportune time, such as a location quantity of zero or a location falls under some number of units, such as less than five cases. The count-back process should be able to leverage this existing code.

The system needs to force a cycle count after each pick in designated storage/pick areas. For example, count-back may make sense in case picking from pallet rack, but not from case flow racking, where picking accuracy may be better and cycle counting harder. Though primarily used in case picking, if accuracy is a problem in “eaches” (single unit) picking, it might also be used there.

The key to minimizing the productivity impact in case picking is for the system to know the pallet configuration of each SKU. That makes it possible for the picker to avoid difficult counting, and instead simply enter the number of layers remaining on the pallet, and the number of loose cases on top. The WMS does the calculation based on the SKU/pallet config, and quickly determines if the count is right. The need to enter full layers and cases on top is what disciplines pickers to maintain orderly pallets.

Compared to cost of scanning each case, the impact of count-back would seem a small amount of overhead to ensure case picking accuracy.

Do you use count-back? Or is it a new concept? Does it make sense, or seem like a non-value added activity? Will RFID eventually eliminate the need altogether? Let us know your thoughts at the Feedback button below.