Easier physical inventory counts matter and can make a big difference to controlling and maintaining your business. Learn these seven steps in improve accuracy.
1) Prioritize Inventory Accuracy Over Order Fulfilment:
In terms of inventory accuracy, prioritizing accuracy over all other factors is the most essential yet challenging step. Quite a few inventory issues come up when someone feels like they need to push a transaction through whatever system is used while intending to return to the numbers to fix them later. Emergency rushing does often mean that people forget to come back and fix it later though. Missed production entries and negative inventory lines join a broad array of problems that result from this. Only when you put systems into place that keep employees from proceeding with a rushed transaction are you able to keep accurate and effective inventory records.
One instance of success that can be learned from is a team that recently instituted an accounting change. It prevented any shipment from being processed if it claimed to have more inventory than the system actually knew was on hand. For instance, if the team was trying to ship 12 units of an item, but the system saw only 6 in stock, then an alert would show up, forcing the staff to fix the issue before they could move ahead. That change helped the team deal with issues prior to the product units going out. By forcing the team to deal on the spot with missed production entries prior to shipments going out, the newly altered system helped them avoid their biggest inventory issues.
2) Everything Gets A Marked Location:
When the time comes that inventory must be counted, it’s necessary that everything has its own labelled home. Stray pallets and homeless loose boxes wind up haunting you when it’s time to reconcile things. Even new and temporarily locations for the duration of the inventory can make life a lot easier, so find a defined location for all items, mark it well, store it there, and then leave it.
3) Reduce Your Inventory As Much As You Can:
Do everything you can to wind up counting as little actual inventory as possible. That might mean stalling an in-bound shipment for a few days, or shipping extra units prior to doing the counting. When you have to count less, you have less opportunity for mistakes. You also want to avoid receiving or shipping any of your product during your count, since this will mean discrepancies.
4) Count Overstock Items In Advance:
Even before you start the official count, you can have individuals count the locations of overstock in advance. That reduces how much counting has to happen on the actual days where inventory is fully frozen. Make sure the spots are stocked fully and then wrap them, marking down the counts of the locations. Just be sure that counts are adjusted to reflect anything taken from overstock between the pre-count and the actual inventory. If you do a full inventory count it should be scheduled well ahead of time.
5) Do Visual Count Tracking:
Your inventory is probably going to take more than one person. That being said, knowing what has been counted and what is still waiting can get gruesomely complex. To keep things simple, make it very easy to know what was counted. Use large count tags that have bright colors as unmistakable signs of what has already been tagged. Go big and obvious, especially is you are going to use anyone not familiar with the environment. Have a second style of tag for anything that is not going to get counted at all.
6) Give Every Team A Product Specialist:
Something else that causes confusion is how items are packed. If an assortment of 12 items is packed as one, is it a dozen units or 1 case? Box markings give clues, but it’s better to have a member of each team be familiar with the product in question. You might need to bring in extra hands for a quick inventory, and they need to know who to turn to for questions in their group. If possible, partner experienced people with newer individuals.
7) Immaterial Counts Should Happen Quickly:
A number of smaller items just aren’t worth counting out individually. This can be things like gallons of chemicals, plastic hooks and bags, or tons of grains. In cases like these, physical measurements and counting, just aren’t worth it in establishing product value. Sensitive scales help out in copious quantities of small items, so weigh a sample and then do calculations on the larger supply. This works especially well for cheaper components. Larger quantities can be estimated and calculated through extrapolation, which is better than just doing guesswork.