Stock transfers between a company’s own warehouses seem straightforward on paper—but in reality, they can be riddled with discrepancies that, if not managed well, create inventory mismatches, reconciliation headaches, and even customer service issues.
Let’s explore some common discrepancy scenarios, how they occur, and how modern warehouse operations practically handle them.
Common Discrepancy Scenarios
- Quantity Mismatch
- Example: 100 units dispatched from Warehouse A, but only 97 received at Warehouse B.
- Possible Causes: Damage in transit, miscounting during dispatch or receipt, theft/loss during transit.
- Wrong SKU Received
- Example: Warehouse B receives 50 units of SKU-ABC instead of the intended SKU-XYZ.
- Cause: Picking or packing errors at source location, especially in visually similar SKUs.
- Damaged Goods on Arrival
- Example: Goods are received with physical damage or broken packaging.
- Cause: Poor handling, improper packaging, or unsuitable transit vehicles.
- Short Shipment with No Documentation
- Example: 10 units not shipped, but not marked as “shipped” in system.
- Cause: Manual oversight or system desync.
- Duplicate Receipt
- Example: Same transfer marked as received twice at destination.
- Cause: Manual entry errors, system lag, or untracked partial receipts.
- Transit Delays Misread as Missing Stock
- Example: Stock marked “missing” due to delay but actually en route.
- Cause: Lack of transit visibility.
- Incomplete shipment received
- Example : Only 8 out of 10 shipped boxes received
- Cause : Network misrouting or network glitches
- Excess stock received
- Example : Warehouse receives stock that was not part of the demand
- Cause : Shipping errors or network routing glitches
How Industry Practically Handles These Discrepancies
- Two-Step Transfer Process
- Many companies adopt a Dispatch + Receipt method.
- Warehouse A records an “Out Transfer” with exact quantities.
- Warehouse B performs a GRN (Goods Receipt Note) after physical verification.
- Discrepancies are logged instantly and flagged for investigation.
- Scanned-Based Movement
- Barcoding and scanning during pick, pack, load, and unload reduces manual error.
- Ensures correct SKUs and quantities are recorded at each step.
- Transit Inventory Tracking
- Stock is moved to a special “In Transit” location in the system.
- This ensures stock isn’t double-counted at either origin or destination.
- Exception Handling Workflows in WMS
- Modern WMS systems allow you to:
- Flag discrepancies in GRNs
- Auto-generate incident tickets
- Hold the stock in “quarantine” or “inspection” zones
- Trigger automated alerts for reconciliation
- Modern WMS systems allow you to:
- Discrepancy Reporting & Audit Trail
- System logs maintain full visibility into who performed what action and when.
- Enables faster root cause analysis (was it a source error, in-transit damage, or destination issue?).
- Tolerance Thresholds
- Some companies configure thresholds for acceptable variances (e.g., ±1% in bulk).
- Anything outside the limit is flagged for mandatory review.
- Return-to-Origin (RTO) or Adjustment
- Depending on the nature of the discrepancy:
- Damaged stock may be sent back
- Shortages may be manually adjusted in system after investigation & approval at source or destination
- Misrouted goods may be re-transferred to the correct warehouse
- Virtual stock transfer back to origin in case of excess receipt
- Temporary parking of virtual stock in ‘Shortage bin’ if partial shipment expected later
- Depending on the nature of the discrepancy:
Why It Matters
Unresolved discrepancies can:
- Distort inventory accuracy
- Cause stockouts or excess inventory
- Lead to financial misstatements
- Affect customer service levels
A well-configured WMS ensures that discrepancies are not only detected but actioned intelligently—with accountability, audit trail, and process integration.