Inventory Variance Reduction: Eliminating the Hidden Costs of Inaccurate Data

Variance problems begin small but grow into major operational failures

Inventory variance reduction is one of the most important priorities for any brand that relies on accurate stock levels to meet customer expectations. Research shows that even small discrepancies can snowball into fulfillment delays, mispicks, stockouts, and costly customer complaints. Variance is not just a number on a report. It is a symptom of deeper workflow issues that damage operational precision.

When brands come to G10, they often describe chronic variance problems at their previous 3PLs: counts that never matched the warehouse management system, items that appeared or disappeared without explanation, and inventory that drifted so far from reality that teams spent hours performing recounts every week. These issues rarely begin as major failures. They begin with gaps in scanning, tracking, visibility, and process discipline.

As Maureen Milligan said, "Most of the customers who come to us from another 3PL, their challenges have always been access to their data, order accuracy and efficiency, and basically just meeting the committed requirements. So we've seen a lot of people come disillusioned by their last 3PL, where their orders weren't getting fulfilled in time, their inventory accuracy was not there, and they were not able to satisfy customer orders." Inventory variance reduction directly addresses these root causes.

Variance reduction requires real time operational tracking

Inventory variance grows when warehouses operate with delayed or incomplete data. Real time tracking ensures that every movement is captured at the moment it occurs, creating a dependable chain of custody for every SKU. Without real time visibility, discrepancies go unnoticed until they compound into large variances that require costly reconciliation efforts.

Bryan Wright described the level of detail needed to eliminate variance when he said, "Absolutely. We have portals that show you the data. We have history that shows you all of that tracking. It shows the product landed on the dock at 8 o'clock. At 8:10, John picked it up and took it to location XYZ, and at 10 o'clock, we picked two items off of that pellet in the location 1, 2, 3, 4, order, you know, ABC, and at 11 o'clock, we packed it, we put it in this box and put this label number on it, and all the way through the process onto the truck and to the customer." Inventory variance reduction depends on this kind of complete event history.

Scan-based workflows eliminate the guesswork behind variance

Variance often starts with simple oversights: a skipped scan, a mislabeled pallet, an unrecorded transfer, or a rushed pick. A warehouse cannot reduce variance when inventory moves without being tracked. Scan-based workflows ensure that every action is recorded accurately and immediately.

As Connor Perkins said, "You want everything to be scanned in the warehouse, nothing done on paper. You can lose a lot of money in this industry by you know having people ship stuff wrong, or store it wrong, and now it's lost somewhere. So having a 3PL and WMS that is 100% scan-based is crucial." Variance reduction begins with this level of scanning discipline.

Connor also said, "One of the pain points our clients have experienced with previous 3PLSs is inventory accuracy; maybe their previous 3PL wasn't great at picking the orders accurately. So they were losing money by shipping wrong items or wrong quantities of items." These inaccuracies are the early warning signs of variance growth.

Visibility portals strengthen variance reduction through transparency

When warehouses and brands share the same real time view of operational data, variance becomes easier to detect and resolve. Visibility portals empower brands to monitor stock levels, audit activity, and confirm accuracy without waiting for periodic reports.

As Maureen said, "We're in the last stages of developing a new portal that will give customers real-time visibility to their on-time order fulfillment, inventory accuracy, and even inventory levels so that they can monitor those things directly in our systems. They'll have visibility to what the statuses of their orders-are they getting processed as they expect?-and things like that." This transparency is essential for eliminating variance before it spreads.

She added, "A lot of the 3PL customer expectations are that order fulfillment is happening extremely timely, that our inventory is accurate, that we're able to execute on their orders very quickly, and get them shipped the same day. So what these real-time portals provide our customers is 100% visibility." Visibility and variance reduction go hand in hand.

Early detection prevents variance from escalating

Variance rarely becomes large overnight. It begins as small discrepancies that grow when they go unnoticed: a bin off by one unit, a SKU stored in the wrong slot, an inbound not fully received, or a transfer that was never scanned. Early detection is the key to preventing these discrepancies from compounding.

As Maureen said, "We will take in your inbounds, we will get them received and reported back to you within our SLAs, and oftentimes more quickly than what we contracted for. We will ship your orders out the day they're required. And our inventory accuracy is generally right there at that 99.7% that we agreed. So that's one of the areas where we really do excel, and where we've been able to win business." Maintaining this consistency requires controlling variance from the start.

Inventory variance reduction is now a competitive advantage

As ecommerce accelerates and customer expectations rise, brands cannot afford inventory surprises. Eliminating variance reduces operational risk, improves forecasting, strengthens fulfillment accuracy, and protects customer experience.

As Connor said, "This is one of our strengths. G10 is on the cutting edge for this kind of transparency and feedback for clients." Variance reduction is one of the clearest expressions of that strength.

If your brand wants fewer discrepancies, fewer customer complaints, and a more predictable fulfillment engine, inventory variance reduction is the most impactful step you can take.