Distribution center shrinkage — the gap between book inventory and physical inventory — is routinely attributed primarily to theft. In reality, industry data consistently shows that 65–80% of DC shrinkage is not theft. It's inaccuracy: inventory that has been mislocated, mis-received, mis-counted, or lost in process gaps that don't trigger WMS adjustments.
The Four Causes of DC Shrinkage
Mislocation — Product put away to the wrong slot. The WMS records it in location A; it's physically in location B. Both locations now have wrong records. This is the most common form of DC shrinkage and the easiest to detect with frequent cycle counting.
Receiving errors — Product received but not accurately counted or scanned into the WMS. A pallet of 100 units recorded as 90, or a case received without scanning. These errors propagate through every subsequent transaction involving that SKU.
Process gaps — Inventory moved between locations, returned from fulfillment errors, or damaged without proper WMS adjustments. Every unrecorded movement creates a discrepancy.
Actual theft — The category everyone focuses on, but typically represents 20–35% of total shrinkage at most distribution centers, not the majority.
Why Daily Counting Changes the Math
The destructive part of shrinkage isn't the initial discrepancy — it's the time between when it occurs and when it's detected. A mislocation caught the same day it happens takes 5 minutes to resolve. A mislocation discovered during quarterly cycle counting may have cascaded through dozens of transactions, driving failed picks, emergency replenishment, and customer service failures.
The Corvus One drone counting every location daily means that mislocation is caught on day one — before it drives any downstream failures. The WMS accuracy improvement within 90 days of deployment consistently reaches 99%+, which directly reduces shrinkage from the 65–80% non-theft category.
Use our ROI calculator to model shrinkage reduction as part of your deployment business case, or read our comprehensive ROI guide for the full methodology. Contact Actel Robotics for a facility assessment.