Stock Adjustments What, How, When & Why?

Stock adjustments are made for a number of reasons. This article discusses how to reduce stock adjustment volume and how you can record stock adjustments faster by using barcodes for stock control.

stock adjustments
stock adjustments

Stock adjustments screen on PeopleVox warehouse management system

How barcoding can help you make less stock adjustments:

1. Stock variances from stock-takes or cycle-counting

Barcoding reduces the amount of stock variance from stock-takes and cycle-counting and thus the number of stock adjustments necessary. Order picking accuracy can be improved from 90%+ to 99.99%, this reduces stock mispicks and resulting stock variances.

[Related: 6 tips for performing an eCommerce stock take]

2. Stock damages

Barcoding provides warehouse managers with full traceability on stock in the warehouse. Where stock is damaged the warehouse manager is able to see who handled the damaged stock last. This information can be used to guide warehouse operative training and reduce stock damages.

3. Stock spoilage

Barcode systems can enforce rules like FIFO and FEFO far more rigidly than manual, paper-based stock control systems. This means the amount of stock spoilage can be reduced, decreasing the number of stock adjustments.

4. Stock theft

The full traceability on stock and warehouse operative handling can help to reduce stock theft. Barcode stock control can increase stock accuracy to 99.99%, this deters stock theft as it shows up more clearly and is less likely to be given the benefit of the doubt.

5. Stock is obsolete

Improved stock accuracy from barcoding enables warehouse operators to reduce the total stock necessary and stock buffer levels; this reduces the likelihood of stock becoming obsolete. Barcoding enables stock receipts to be processed in real-time; this removes any lag between stock delivery and it appearing in stock. This reduces the chance of purchasing over-ordering. Barcoding stock systems also allow Warehouse Managers to drive reports on stock that does not move location or is starting to become obsolete and make actions to liquidate it earlier.

6. Stock samples for marketing

A barcode system will allow a stock-adjustment to be made at the point of action. A reason code can be set up for marketing samples and this can be entered against the stock.

Reason codes at the point of action make stock adjustments faster. Barcoding systems enable the stock control system to be updated with stock adjustments in real-time at the point of action. This removes the manual processes and data-entry duplication, saving time.

When setting up the barcode system, ‘reason codes’ for stock adjustments can be assigned to stock adjustment types. When making a stock adjustment the user must first scan the stock to be adjusted and then enter the relevant ‘reason code’.

When not to make a stock adjustment

>> Stock adjustments should not be used to put-away stock to the warehouse. Goods-in and put-away functions of the stock control system should do this.

>> To balance out stock receiving with a stock count the stock should be scanned and assigned the ‘reason code’ related to receiving error.

Summary of stock adjustments and how barcodes can help

Barcoding decreases the number of stock adjustments by increasing the accuracy of the stock figures. The speed with which stock adjustments can be made is improved by making them at the point of action and assigning ‘reason codes’. By reducing the time spent and the volume of stock adjustments warehouse operators can reduce their operating costs.

[Related: 3 reasons to automate your warehouse]