Completing a physical inventory is a necessary part of inventory management because accuracy doesn’t just happen, it needs to be achieved.
Inventory accuracy is cornerstone to success. It is a bedrock topic to improving service levels, reducing lead times, increasing margins, improving efficiencies, reducing inventory levels….and the list goes on. Although I recommend implementing cycle counting programs as a way to replace physical inventories, there are times when a physical inventory is a must. Thus, it is worth thinking about a few tips to successfully complete a physical inventory.
- Prepare, prepare, and prepare: 80% of your success is in preparation. Organize the warehouse, clearly mark areas, label exceptions, complete and review system transactions, etc.
- Stop/isolate movement: When you begin your physical count, stop all physical and system movements and transactions. This is a critical foundation – similar to building a house, if you start adding windows prior to finishing the walls, the house might begin to fall apart.
- People and communication: Make sure the right people are in the right jobs for their skill sets. And, communicate, communicate, communicate. Make sure everyone has clear instructions, understands how to get questions answered, etc.
- Manage the control desk: This is the term I’ll use for the team organizing and controlling the process – the Grand Central Station hub. Typically, this person/team keeps track of count sheets, makes sure everything “adds up”, answers questions and keeps the process moving.
- Metrics/tracking progress: Putting the key metrics and vehicles in place to track progress is cornerstone to success. By reviewing these metrics, the leader can review progress, make adjustments as required and keep the process on track. Metrics also provide for a way to measure success.