How to run a stock take in a warehouse

A full stock take counts every item at every location. You do it once or twice a year, often for financial reporting. A cycle count checks a slice of stock at a time, such as one zone this week and another next week, so you never shut down for a full count.

If your books are reasonably accurate and you only need to keep them that way, cycle counts are usually enough. If you have never counted properly, or the numbers have drifted badly, start with one full stock take.

Choose a quiet stretch and tell suppliers and customers what is happening. Stop receiving, putting away and dispatching for the whole count. Nothing moves until the count is signed off.

A count taken while stock is still flowing produces variances you will never explain, and stopping is the cheapest way to avoid them.

• Give every location a code and a readable label. Bins with no label are where counts go wrong.
• Consolidate part-full pallets and boxes where you can.
• Set aside damaged, expired and returned stock so it is counted separately.
• Export the system quantities before you start, so you have a fixed baseline to compare against.

Give each team a zone with a clear boundary. Keep counters out of their own area where possible, since people tend to see what they expect to see. Two people per zone works well: one counts and one records, or one counts and the other checks.

Work location by location. Count what is physically there and record it against the location. Do not let counters see the system quantity while they count, or they will round toward it without meaning to.

Count in the unit of measure the system uses. Cartons of 12 counted as single units is a classic way to create a variance of 11 per carton.

When a zone is finished, compare the counts to the baseline. For any item that is off by more than a threshold you set, whether a dollar value or a percentage, send a different person to count it again. Many variances vanish on the second count. The ones that stay are real.

Adjusting the system to match the count fixes the number. It does not fix the reason the number was wrong. The usual causes:

• Receipts booked to the wrong item, or not booked at all
• Picks recorded against the wrong SKU
• Stock put away in the wrong bin
• Unit of measure mismatches
• Damage or theft that was never written off

Post the adjustments with a reason against each one. Keep the count sheets. An auditor, or you in six months, will want to know why a quantity changed.

Accuracy starts decaying the day you finish. Schedule cycle counts on your high-value and fast-moving items, and look at where variances cluster. That is where your process is leaking.

Varify covers the counting and reconciling steps from a phone. Counters scan the QR label on a bin and enter the count, and it keeps working offline once the session has been opened.

Variances show against your imported quantities. A second count on the same item becomes a recount instead of overwriting the first, and a Team Leader or above reviews and commits the result. Items and locations come in from a spreadsheet. See the full walkthrough in How It Works.