Blind stocktake procedures work best

Posted on Nov 28, 2010


With or without an inventory management system, you have the choice of two stocktake procedures. The first is to tell your warehouse operators what stock should be in the specified locations. The other is to let them go at it blind, where they are not told what stock should be in the location. Which works best?

Non-serialised versus serialised:

If you are dealing with not serialised items, you will be recording your inventory by SKU (stock keeping unit)/product code and putting a quantity against it, maybe in defined locations. The best stocktake procedures for this is blind. Ask your operators to scan everything in the locations, with no hints. Without hints, they are not tempted  to be lazy and just agree with the system.

If it is serialised product, the same applies as above, but giving them clues is OK as they will have to scan every pallet or item anyway as each item is 100% unique.

How accurate should my stock take be?

If you have an inventory management system and your stocktake procedures are such that you are doing perpetual inventory counts every week on a rolling basis by product or more typically, location, you will be 99.99% accurate. If you are user paper pick lists without any electronic warehouse system, but doing a stock take monthly, you will be at about 96% with errors, mis-ships and probably a labour intensive quality control. the once a year club – constipated elephants – 90-95% is typical.

The variance report produced in stocktake procedures should enable adjustments to occur extremely quickly and also provide you on the tracking of where your problems are, so you can quickly resolve them.

We see Excel being used to track millions of £s of inventory with cumbersome stocktake procedures in place, that are often considered to be great. Pure denial and arrogance, otherwise millions of other companies would not have invested in these solutions. Best way,
get a few potential suppliers in that know their stuff on stocktake procedures and warehouse management, and use the free consultancy time!

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

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Author: Jonathan Bellwood

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