Continuous improvement focus lifts inventory accuracy levels

A strong focus on operational improvements has enabled HSV’s Logistics team to achieve inventory accuracy levels of 90 per cent – up from 74 per cent eight months ago. 

This has been achieved through a series of process improvements that ensured systems worked together more cohesively, explains HSV Director Logistics Armin Odobasic.

“We began looking at our accuracy rates in August 2022 before we had systems in place,” he says.

“After implementing a series of improvements – including a systematic cycle count strategy – accuracy rose to 81 per cent in December 2022 and in March 2023 we recorded accuracy levels of 90 per cent.”

The systematic cycle count is an eight-week system guided count of every location in the warehouse that compares warehouse inventory with stock recorded on the system.

Armin says the team also gave trained inventory staff responsibility for the count, instead of store staff who were less familiar with the stock.

In addition, the team conducted a review of operational processes to track each function from receiving through to picking to check for areas that were prone to errors.

“For example, we found that occasionally receiving staff made errors when counting pallets, and we would get the wrong amount of stock recorded,” says Armin.

“We also identified stock labelling as an area for improvement because if errors were made this would impact on the replenishment of stock.”

These improvements increase the accuracy of our service provision, contributing to lower operating costs and improved efficiency across the Victorian health system, explains Armin.

The team is now focused on making further improvements to move accuracy levels closer to 100 per cent, including reducing the number of touchpoints at locations where products are picked.

“We’re constantly reviewing our sales orders when they’ve been picked and after they go out and we’ll be aiming to make those incremental gains so that we can keep improving,” Armin says.

The team is also running regular workshops with operations leaders and providing progress updates to improve understanding of processes among staff.