Common Pitfalls of Stock Taking

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Stock taking is an important part of inventory management and as the name implies, it involves counting the inventory stock on hand. It is often an avoided task as it can be difficult and tedious, however an accurate count is essential for good inventory control. As simple as counting items sounds, there are some common pitfalls which will be outlined in this article.

Warehouse Organisation

An appropriate and organised warehouse storage system is essential to a successful stocktake. Everything that requires counting needs to be accessible in a logical way. So many stocktake errors result from an ill-prepared environment. If stock is in five different places with five different people counting it, then it is near impossible to attain any sort of accuracy during the stocktake.

Train and Release

It is vital to train staff in stock counting to ensure it is done accurately and consistently. Staff need to know what they are supposed to be counting and how they are to count it. Do not be a helicopter-manager where you hover about trying to get involved in the micro-tasks. Managerial skill and time is far better spent investigating inaccurate counts and ironing out issues rather than actually interfering with the count itself.

Resolve Errors

It is important to investigate the source of errors, no matter how small, in a timely manner. Often, small discrepancies are simply written off which can cause a much larger, cumulative error downstream resulting in erroneous corrective actions and a headache to sort out. Ensure the books are balanced periodically with discrepancies resolved quickly to save time and money in the long run. Read this article on how to solve your stock take discrepancies.

Organise Counters

Counters should count stock in sections so that it is organised and systematic. They should count stock in pairs so that each item is handled and counted by one person and documented by another. If one person does both tasks simultaneously, errors can easily creep in. Another vital key for stock taking success is to use a way of tagging what has been counted. A common source of count errors is double-counting or discounting stock because it is unknown what has already been counted. This leads onto a very important pitfall.

Embrace Automation

It is especially beneficial in a large warehouse or factory to use an automatic system to facilitate stock taking and inventory management. Not only is it beneficial for quickly summarising counts and inventory but also, it allows for very easy and effective electronic tagging of stock through the use of barcodes. It is imperative to have eyes on every item and barcoding is a useful and quick way of doing that.

Act with Diligence

A major source of stock taking errors occur when items are small, grouped in boxes or difficult to access. Whatever the dilemma, the temptation is to estimate or count from afar without touching each item. This habit is dangerous for inventory management as it is impossible to get accurate figures that are absolutely necessary. There are methods to count for difficult items such as liquor or tiny products where specific estimation or weights are used, however generally, each item must be visualised and handled to be counted.

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Melanie - Unleashed Software
Melanie

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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