Let’s be honest – inventory count is often a dreaded task. We hear about endless hours to get on top of the task, to discovering pricing errors that mean reconciling data against invoices from the previous year, a monotonous and time-consuming task.
Although the process can be tedious, it is critical for businesses to have an accurate and up-to-date picture of their inventory status as it can have an enormous impact on your business’ bottom line, particularly at the start of a new financial year. Conducting a physical stock count – whether every quarter or annually – can help maintain your business’ profitability by minimising inventory loss, damage, and theft. It can also enable more accurate forecasting and informed decisions regarding suppliers and distributors.
For Australian retailers in particular, accurate inventory counts have never been more important. Up to 82% of all Australian households now shop online, an astounding 57% year on year growth. Facilitating more online purchases increases the need to have greater visibility over stock levels across all locations and warehouses – without which, fulfillment will be challenging and could impact the customer experience.
Recent global influences, coupled by local extreme weather events have also led to a raft of supply chain issues – which Australian retailers expect to continue for up to 18 months. Such disruptions result in some retailers not having enough stock, product arriving late or at unplanned times. Whilst this cannot be predicted or controlled – having an accurate view over product levels on a regular basis may help to alleviate any added pressure from stock issues that may have compounded over time.
Here are three tips to make ‘stock take’ as smooth a process as possible:
- Set the date early
To make sure inventory is accurately recorded on the balance sheet, physical counts are often conducted at the end of the financial year. Given this process requires dedicated resources, scheduling this well in advance will ensure you have the right resources available.
Depending on the amount of your inventory and where it is located – the physical count may impact normal business operations, deliveries and fulfillment. So pick a time that is outside of regular business hours, or at the very least, during a time that trading is quiet. This will allow uninterrupted time to conduct the count and rectify any discrepancies without affecting the customer experience or your ability to operate efficiently.
You may also be able to minimise costs by reviewing allocation of tasks across your staff. This can be done by ensuring experienced staff focus on maintaining day-to-day critical operations to better service customers, while less experienced staff focus on lower priority tasks while they upskill.
2. Planning makes perfect
To avoid extra work on inventory day, take time beforehand to clean up and organise the count location. To help speed up the counting process and guarantee all inventory is accounted for, make sure everything is neatly stored and labelled.
Once everything is organised, map out the space and put together a plan on how the team will make its way around the area on the day. Make sure to include detailed information about exactly where products are located, ideally down to zone, aisle, shelf or bin numbers. Outlining a clear physical path around the store or warehouse will give direction and ensure everyone is working in unison, so everyone is aware of which inventory has or has not been counted.
3. Lean on technology
Inventory counting has come a long way. Mobile devices with scanners are now commonplace in Australia and for a good reason – by enabling the collection of scanned data from bins and items within them, more accurate reports can be generated which eliminates common human errors.
Although inventory and warehouse management systems cannot fully replace physical inventory counts, they can speed up the process and ensure that your inventory is up to date. Given the resources it takes to run physical counts, having technology in place is well worth the investment to make the process faster, easier and efficient. Also, as the detailed inventory information can be automatically added to a cloud-based business management system, it provides real time data and stock level insights, giving business leaders an accurate view of their operations at any point.
If you want your business to succeed in today’s increasingly digital and unpredictable world – inventory count is playing a key role. But fortunately – they can be made much more manageable with simple steps like good organisation, forward planning, and the right technology.
Jason Toshack is vice president and general manager for Australia & New Zealand at Oracle NetSuite.