Case Study — Company Success Using Inventory Audits for High-Volume Distributors
Inventory audits can be time-consuming, labor-intensive, and disruptive — especially in high-volume operations managing multiple yards. But when done right, they become a powerful tool for reducing shrinkage, improving service levels, and increasing trust in the numbers.
This case study explores how a regional building materials distributor overhauled its inventory audit strategy using ERP-driven tools, mobile workflows, and team-wide accountability — and achieved measurable success across four facilities.
The Background
The company:
Operated across 4 locations with over 6,000 active SKUs
Stocked bulk items (cement, gravel), long goods (lumber, pipe), and packaged materials (adhesives, insulation)
Conducted one annual physical inventory and occasional manual cycle counts
The problems they faced:
Inventory accuracy averaged just 89%
Audit-related shutdowns led to lost revenue
Frequent delivery errors due to inaccurate stock levels
Adjustments were made without oversight or explanation
Staff didn’t trust the system — and neither did finance
The Turning Point
After a missed delivery to a large contractor due to a miscounted lot of plywood sheets, the leadership team committed to a full audit process transformation.
They partnered with an ERP provider to:
Implement automated cycle count scheduling
Enable mobile-based scan-to-count workflows
Lock down inventory adjustments to supervisor-only access
Track audit variance by user, SKU, and location
Launch audit training modules for all warehouse staff
The Implementation Strategy
Cycle Counts Replaced Annual Physicals
The ERP scheduled daily counts by zone, with high-turnover SKUs counted weekly. Yard operations remained open.
Real-Time Variance Handling
Variances triggered ERP alerts, required a secondary count, and had to be resolved within 24 hours with reason codes.
Mobile Devices Rolled Out to All Yards
Each team received handheld scanners with guided count tasks and zone-specific workflows.
Audit Metrics Tracked Weekly
KPIs like audit completion rate, variance rate, and average resolution time were reviewed by yard managers every Friday.
The Results (Within 6 Months)
Inventory accuracy jumped to 98.5%
Stockout-related delivery delays dropped by 42%
Unexplained inventory adjustments dropped by 67%
Audit time per zone reduced by 60%
Customer complaints tied to fulfillment accuracy dropped significantly
Finance closed books faster. Warehouse staff became more confident in system data. The cycle count process became part of daily life — not a yearly panic.
Unexpected Wins
Faster onboarding: New staff could be trained on cycle counts in under 30 minutes.
Vendor accountability improved: Damage and shortage patterns became clearer through count history.
ERP adoption spiked: Staff saw real-time results from better data and started using mobile tools more consistently.
Key Takeaways
You don’t need more people to audit better — you need better systems.
Replacing annual audits with rolling cycle counts increases control and reduces risk.
Inventory audits aren’t just about the numbers — they’re about empowering your team to trust the process.
Final Thoughts
This distributor didn’t just fix their inventory accuracy — they changed their inventory culture. By integrating ERP tools, clear accountability, and daily audit habits, they created a system where inventory becomes a strength, not a stressor.
You can’t grow what you can’t count — but with the right audit strategy, you can count on growth.
