Stocktakes are an essential part of managing any business that has any kind of inventory.
What is it?
Stocktaking is when you physically count all of the inventory that your product-based business holds. This process helps you to find out how much actual inventory there is. This process differs for each company depending on the type of inventory that they hold.
Stocktaking is important because it helps to maintain their records of what is actually on hand.
- How are you tracking?
Unfortunately, you cannot rely on your systems for accurate reporting. By counting stock and comparing to the previous stocktake, you are able to compare and find discrepancies and fix them.
By accurate tracking, you are also able to forecast and plan better. If you are able to forecast and plan, you should have fewer stockouts, overstock or dead stock on hand. Keep the products and materials on hand that are moving.
- Where are your stock issues?
Your IMS might not be able to pick up issues that a physical stocktake can pick up. Identify problems such as damages, theft, missing orders or poor control. By identifying the problem, you are able to create solutions.
- Are you meeting your targets?
When you know how your products are performing, you know how to plan ahead to better meet your targets. To calculate inventory turnover, you need accurate figures.
How to stocktake?
- Choose a good time
Stocktakes are time-consuming and require resources and manpower. Pick a day when your business is less busy and you have the resources.
- Cut off sales and purchases so they don’t mess with your stocktake.
- Use physical stock sheets
Stock sheets should include things like:
- A list of the stock items
- The location or bin
- Quantity of the item
- Set aside and organise
Stock that is already sold, or waiting for delivery should be set aside and excluded from your stock take. Following those exclusions, you should sort your stock into categories so that you can account for everything faster.
- Clear aside a dedicated area for the stocktake
- Organise stock into categories and groups, and try to count that group on the same day to avoid mistakes
- Staff Organisation
Your staff should be assigned to certain categories and they should work in groups. They should be given the goals they are working towards and a clear direction on how to count.
- Supply equipment to your staff. The most common equipment includes pens, clipboards, stock sheets, calculators, scanners, and mobile devices.
- The supervisor needs to make sure that there are no distractions during the count.
- Remember to plan breaks during the day to keep your eyes fresh and mistakes at a minimum.
- Don’t make any guesses
The goal of the stocktake is to get an accurate account of what inventory is on hand. This requires methodical counting.
- Mark items as you count them
- Count in the same direction (ie. Top to bottom, left to right)
- Don’t take anything at face value. If a box says it holds 10 items, check that it holds 10 items.
- Compare the stocktake
Once the stocktaking is complete, compare the results from the previous stocktake to identify any discrepancies. Inconsistencies should be accounted for and noted. Make sure that your staff are aware of the procedures for dealing with different situations such as damaged inventory.
- Update your records
Once the discrepancies have been identified, you need to update the online system with the actual figures.
- Plan ahead
Take note of what worked and what didn’t work during this stocktake so that you can make improvements for your next stocktaking. This is also the best time to think about your inventory management and if there are any improvements you can make to your system. Ask for everybody’s input to help get their insight on what can work better as well.
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