09/15/2026

The Benefits of Predictive Analytics Cycle Counting

Pilot and live-client results from the GEODIS predictive analytics cycle counting program, and how existing and new clients can get started.

We piloted the GEODIS PACC model with an existing GEODIS client in the healthcare industry, a global medical supply manufacturer. Following the success of the PACC pilot project, we have started to introduce the PACC approach for some of our clients in a live production environment. PACC is an optional approach that can replace or be used alongside existing cycle counting methods.

Key takeaways

Indirect labor hours were reduced by more than 30% and redirected to client revenue-generating activities.
A significant boost to top-line productivity through more efficient picking, packing, and replenishment activities, boosting productivity by 17% over four months.
PACC is an optional approach that can replace or be used alongside existing cycle counting methods.
PACC is available to all new and existing clients for GEODIS Americas.

Part 3 of 3 in a series on GEODIS's predictive analytics cycle counting (PACC) approach. Part 1 covers what predictive analytics cycle counting is and why GEODIS built it. Part 2 covers how the PACC model works.

PACC pilot project findings

Summary of PACC improvements for our pilot client

We piloted the GEODIS PACC model with an existing GEODIS client in the healthcare industry, a global medical supply manufacturer. GEODIS provides complete warehousing and logistics services to this client.

The results of the pilot program follow. As with many complex, interdependent systems or initiatives, it's not possible to state definitively that all of these improvements are purely the result of introducing PACC. But, the trends show that since introducing PACC, we are seeing significant improvements for this particular client.

In brief, we discovered that after introducing PACC, we saw significant improvements across several areas:

Reallocation from non-revenue support costs to revenue-generating activities for the client.
Significant increase in unit-per-hour throughput, for more efficient order processing.
Strong boost in throughput productivity, independent of revenue or order volume.
Increase in permanent employees compared to temporary employees servicing the pilot client.

Taken together, these findings demonstrate significant improvements across client operations, employee productivity, and workforce engagement.

Reallocation of non-revenue support costs to revenue-generating activities

GEODIS measures our workforce allocation in several ways. One method compares direct function hours with indirect function hours.

Direct functions are for activities that directly support client operations and revenue, such as receiving, picking, packing, and distributing products.
Indirect functions are for activities that are important to the client but do not directly generate revenue, such as account support, customer service, or inventory counting.

Introducing PACC for our pilot client during early Q3 significantly reduced labor costs and indirect hours as follows:

22% reduction in indirect hours and cost between Q2 and Q3
Further 17% reduction between Q3 and Q4

The introduction of PACC means that we were able to redeploy labor originally assigned to indirect functions to direct functions that generated further revenue for the client.

Significant increase in unit-per-hour throughput

GEODIS uses a "unit-per-hour" (UPH) measurement to show how many units we process through our facilities over an hour. A higher UPH means we're working more efficiently for our clients.

We compared our UPH efficiency to the percentage of hours we spend on indirect functions (defined above). We found that:

Our UPH increased between Q2 and Q3 and Q3 and Q4.
Our UPH during Q4 was the highest it had been all year.
Our indirect function hours fell while maintaining a high UPH.
The productivity increase did not result in more hours spent on supporting functions.

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Strong boost in throughput productivity independent of revenue or order volume

One measure of GEODIS warehouse productivity performance compares the amount of time we expect for the completion of a task to the amount of time the task actually takes. An example might be the total amount of time required to receive an order, pick the item, pack it, and prepare it for shipping.

We then compare our benchmark expectations for that task against the time spent, so if a task we expect to take ten minutes instead takes nine, that would be a productivity performance measure of 110%.

The pilot program saw an improvement in productivity performance.
Productivity performance rose from around 95% when the pilot program was introduced, to 110% at the end of the year.
This compares to the productivity of GEODIS Americas as a whole, where we saw productivity performance in July of 94%, rising very slightly to 96% at the end of the year.
In the pilot program, the productivity performance increase was independent of client order revenue, showing that GEODIS improved on productivity even as demand varied.
This demonstrates that changes in revenue levels or order volume does not negatively impact on productivity or vice versa.

Increase in permanent employees compared to temporary employees servicing the pilot client

GEODIS employs a skilled permanent workforce and uses temporary employees to maintain standards and service levels during peak periods or staffing challenges. Our desire is to strongly emphasize permanent employment to increase institutional workforce knowledge for the client, manage our labor costs effectively, and provide career development opportunities.

The overhead created by regular cycle counting, together with the challenge of peak periods, often means we have to increase our temporary workforce significantly to meet client needs. However, that was not the case for our pilot client after we introduced PACC.

We compared our permanent workforce percentage to our temporary workforce percentage for the pilot client:

Between July and December 2020, prior to introducing PACC, we saw our permanent workforce percentage decrease from 76% to 65%.
In the pilot program, between July and December 2021, after introducing PACC, we saw our permanent workforce percentage improve from 65% to 91%.
This compares to GEODIS Americas as a whole, where the permanent workforce percentage decreased from 72% to 64% between July and December 2021.

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PACC live client performance

Summary of PACC improvements for a live client in production

Following the success of the PACC pilot project, we have started to introduce the PACC approach for some of our clients in a live production environment. One of our clients is a major manufacturer and GEODIS handles their logistics and distribution in the US market:

Our client is a major, international toy manufacturer.
GEODIS handles 60% of their end-to-end US supply chain.
We handle approximately 5 million orders a year.
We ship approximately 30 million units a year.

Our warehouses started using PACC for this client's cycle counts in April 2022. The results below compare performance between January and August 2022, before and after introducing PACC.

As with the pilot program, we can't state definitively that all of these improvements are purely the result of introducing PACC, but the trends show that since April 2022, we are seeing significant improvements for this client in our production environment. Briefly, these improvements include:

A significant boost to top-line productivity through more efficient picking, packing, and replenishment (PPR) activities.
Strong reduction in non-value-added, indirect labor for our client.
A matching increase to direct, revenue-generating activities for our client.

These benefits follow similar trends to what we saw for our pilot client.

Significant boost in top-line productivity, supporting our client's SLAs

One measure that GEODIS facilities use to track productivity is our "PPR" percentage. PPR is a measure of efficiency that combines "picking," "packing," and "replenishment." It shows how effectively our employees are at meeting GEODIS expectations. PPR directly supports us in meeting client SLAs for everyday logistics activities.

Our benchmark for PPR is set at 100%. When our PPR% meets this benchmark, we are in line to meet our key client SLAs for picking and distribution. Any increases over the 100% benchmark show that we are exceeding both our internal productivity measures and contributing to improved client SLAs.

Introducing PACC for our live client in April 2022 significantly improved our PPR productivity:

PPR% increased from 101% in April 2022 to almost 118% in August.
This contributes to improved service levels for our client.

Please note that PPR is similar to the "units per hour" and "throughput productivity" measures shown in the pilot section above.

Increase in direct, value-added activities for our client

As mentioned in the pilot program data, GEODIS measures our workforce split between direct and indirect labor hours:

Direct functions are for activities that directly support client operations and revenue, such as receiving, picking, packing, and distributing products.
Indirect functions are for activities that are important to the client but do not directly generate revenue, such as account support, customer service, or inventory counting.

Introducing PACC for our live client during April 2022 significantly reduced indirect hours as follows:

The percentage of indirect labor hours fell from 22.8% in April to 16.4% in August.
This is a 28% reduction in the total number of indirect labor hours.

The introduction of PACC means that we were able to redeploy labor originally assigned to indirect functions to direct functions that generated further revenue for this client.

Enhanced productivity cost savings allowing for redeployment of effort

The reduction in the number of hours spent on indirect, non-value-added activities translates into headcount costs that we can reallocate to direct, value-producing work.

Introducing PACC generated cost savings of approximately $4,800 a month, or around $57,000 a year.
This is equivalent to approximately one FTE of effort that we can redirect to revenue-producing activities.
These savings occurred at the same time as improvements to our top-line productivity measure, our PPR% rate.

August results are not yet finalized due to slight processing delays, but they are expected to be in line with the savings we saw in May through July.

The benefits we've seen for our production client mirror the improvements in our pilot study. We'll continue to track PACC findings across our live clients to ensure we're meeting and exceeding service levels while boosting value and client satisfaction.

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How predictive analytics cycle counting will affect you

Communicating why PACC increases apparent errors is vital to managing client expectations

The nature of a PACC approach means that we expect to find more inventory errors over the short term as we're specifically counting items that have previously been inaccurate. However, over the long term, we expect to see these errors decrease as GEODIS teams use root cause analysis to identify and remove the issues that cause inventory variances.

The important point here is that the actual accuracy of a client's inventory will improve overall, even if PACC metrics show a greater number of variances among a specific subset of item counts. GEODIS agrees acceptable shrinkage service levels and baselines with each client. We use industry-leading best practices to stay within those contractual levels overall, even if a specific counting method identifies more variance.

This is an important aspect of account management and client communication. Clients should be reassured that even though PACC may identify greater discrepancies over the short term, over a longer period of time we expect to improve inventory accuracy. In all cases, we will meet our stated service level agreements for inventory shrinkage.

Predictive analytics cycle counting for existing GEODIS clients

If you're an existing GEODIS client, you can choose to use our PACC approach for your inventory management. We are currently introducing PACC as an option for all of our Americas clients.

PACC is optional: you can remain on your existing cycle count methods, or move to the PACC approach.
The PACC approach delivers improvements over our existing cycle count methods, as detailed in this article series.
GEODIS can customize PACC to your exact needs and specifications.
Please contact your account management team to learn more.

Predictive analytics cycle counting for customers looking for a new 3PL provider

If you're looking for a new 3PL provider in North America, GEODIS can provide PACC inventory management as part of our extensive range of warehouse and logistics services.

The PACC approach delivers improvements over the standard cycle count methods that are used elsewhere in the 3PL industry.
We've detailed the benefits of a PACC approach in this article series.
GEODIS can customize PACC to your exact needs and specifications.
Please contact GEODIS to learn how our logistics services can help you.

Predictive analytics cycle counting and what it means for the 3PL industry

We believe that PACC will transform the way that 3PL providers manage inventory for clients. Although existing cycle count approaches are well-established throughout the industry, our research and results demonstrate that PACC consistently achieves higher levels of accuracy and lower shrinkage with less workforce effort.

GEODIS is delighted to be a pioneer in this field as part of our "Technology as a Strength" initiative. We are happy to share our approach, methodology, and results through interviews, seminars, articles, and other media. For further information, please contact GEODIS Americas.

Conclusion

Predictive Analytics Cycle Counting is a novel and unique approach that drives more accurate inventory management compared to standard cycle counting methods. It significantly improves inventory reconciliation for GEODIS clients, leading to less shrinkage, better demand forecasting, lower costs, and more satisfied end customers.

The benefits of PACC also include enhanced root cause analysis and remediation to prevent inventory errors, redeployment of labor to revenue-generating activities, and a more engaged workforce that benefits the client.

PACC is now available to all new and existing clients for GEODIS Americas.