Count Back

Problem: The PAFC has experienced a high Defect Per Million Opportunities (DPMO), specifically as measured by our
Inventory Record Discrepancy Report (IRDR) ‘snapshot (on 23 April 2018 18,277 and 22,304 respectively.) Specifically,
‘stowed physically not virtually’ is the biggest driver of errors in our building which indicates a quantity style error not a
product type error (validated by sample taken on 4/23 and 4/18 of 6000 completed counts.) Section 409 of the Sarbanes
Oxley Act of 2002 requires the timely identifying and resolution of errors.

Proposed Solution: To remain compliant while the ICQA team is proposing quantity counting of the bins during zone
pick process. This will direct the picking associate to get a soft count on a bin / location and preform a quantity count.
Current cycle count process requires a second system triggered count if there is a discrepancy in the location. This
requirement will not change when moving to quantity count. If there is a count discrepancy a second triggered count will
need to be completed at the sku level. This second count will enable the ICQA team to address defects in the inventory
more quickly and drive down the DPMO of the building.

Process steps:
PAFC will require assistance from the DEV team to work through the change in WMS functionality.

Steps:
1. Authorized Associates Logs into WMS / At last
a. Zone picking tool
2. System directs associate to pick locations
a. .
3. Associate will be directed by the system to count locations
a. Leveraging the ‘tote snag’ logic built into the zone pick tool, the system will prompt an associate to enter
the remaining quantity in a location after the pick has been complete.
b. The system will direct the associate to enter the numerical quantity of items present in the bin / location.
4. Authorized Associate will be directed by the system to count locations
a. Following the same logic built into cycle count 5.0 a separate associate will be directed to count the
defect location.
b. The system will instruct the associate to scan bar codes for verification
When a quantity count defect is identified the second count will verify SKU level and the following defects which will be
inspected:
1. Mislabeled Item?
2. Extra / Short Physical item
3. Extra / Short Virtual item
The discrepancies will still be tracked in the cycle count tool within WMS.
Cycle Count DPMO will still be reported on the Perfect Order Score Card

Data Review:
.

Target Results:
- Increased bin health as measured by a decrease in IRDR DPMO and decreased overall Cycle Count DPMO
- Secondary benefit will reduce the amount of inventory shrinkage in the FC.

Timeline for Roll Out:

Week beginning 4/30/2018 – Communicate process to GM / SOPS and Network.
Week beginning 4/30/2018 – Communicate DEV in Seattle
Week beginning 6/04/2018 – Begin Count Back method

April 2018 – William Brent Page 1 of 2

 Count Back

Recognition Process:

April 2018 – William Brent Page 2 of 2