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How to Conduct Physical Inventory Counts

Barcoding Inc. has various software and hardware solutions to help you conduct year-end inventory counts that will drastically reduce the time and effort it takes to perform them. As items can not be added to, or taken away from, your inventory as it is being counted, performing an inventory count in as little time as possible while maintaining its integrity is critical to keeping your business up and running.

Basic Steps to Follow:
First you want to divide your facility up in to separate zones. Remember that everything in your facility needs to be counted, including raw materials, spare parts, items that are in the “work in process” stage, as well as finished goods. The only items that shouldn’t be counted are items not yet put in to your inventory and items already taken out of inventory.

You then want to divide the people up that are helping conduct your physical inventory to cover each zone. Ideally it is best to have several groups instead of individuals to maintain integrity of the data. Using a portable data collection device will help ensure the integrity of the data is maintained as well.

Train each person on the data collection device that they are using. Depending upon your facility, the Symbol MC3000 is a great device to perform physical inventory counts. It’s light ergonomic design along with it’s 1/4 VGA screen make it a good choice when training new people on using portable data collection devices. The Windows CE operating System allow it to run nearly any inventory software package available today.

Make sure when you give each person their device they know where they will be conducting their counts as well as what units they should be counting (each, dozen, bottles, cans, cases). This is where using an inventory software package with your data collection device can eliminate a lot of confusion as the count units will already be pre-programmed before giving the devices to the inventory team.

Describe to the counting teams the arrangement of the stock in order to facilitate the count and identify and exclude from the count any items that are:

On consignment
In the receiving process and have not yet been included in the perpetual inventory records
In the shipping process and have already been removed from the perpetual inventory records
Counting The Inventory
You will want to perform inventory counts during a low-point of your inventory activity. Perhaps during a slow season, or on a weekend. During the inventory counting process, items can not be transferred, moved in to, or out of inventory. The process must be completed without any interruption.

Once the count has been completed, the items that were counted need to be matched up against your system by an independent person. An inventory software package can do this process for you automatically. Any discrepancies in your inventory count should be investigated by a counting team, preferably a different team than the one that did the counting. For instance, the team that counted items in Zone A can check discrepancies in Zone B, and Zone B’s team can recount items in Zone A.

Once all discrepancies are ironed out your physical inventory is complete and you can resume your daily processes. Make sure to record any adjustments you make to your inventory for accounting purposes.

How to perform Inventory Counts using Cycle Counts by Frequency