{"id":9406,"date":"2022-10-12T16:03:56","date_gmt":"2022-10-12T10:33:56","guid":{"rendered":"https:\/\/www.fusioninformatics.com\/blog\/?p=9406"},"modified":"2022-10-12T16:04:00","modified_gmt":"2022-10-12T10:34:00","slug":"best-practices-for-inventory-counting-automating","status":"publish","type":"post","link":"https:\/\/www.fusioninformatics.com\/blog\/best-practices-for-inventory-counting-automating\/","title":{"rendered":"Best Practices for Inventory Counting: Automating Manual Tasks"},"content":{"rendered":"\n<p>Many businesses conduct regular physical inventory counts as part of their annual financial accounting practices. Large companies with thousands of items typically shut down for a week or more to perform a complete <strong>physical inventory count<\/strong>. <\/p>\n\n\n\n<p>Cycle counting is an <strong>inventory management method<\/strong> that enables you to count products or items in a particular warehouse location without interrupting operations to perform a full physical inventory.<\/p>\n\n\n\n<p>Inventory counting is a critical process in <strong>warehousing<\/strong> because it provides a clear picture of items on hand, aids in maintaining optimal inventory levels, and allows for <strong><a href=\"https:\/\/www.fusioninformatics.com\/blog\/demand-forecasting-methods-machine-learning-for-future-sales\/\" data-type=\"URL\" data-id=\"https:\/\/www.fusioninformatics.com\/blog\/demand-forecasting-methods-machine-learning-for-future-sales\/\">data-driven inventory forecasting<\/a><\/strong>. When done manually, inventory counting is a time-consuming and error-prone process.<\/p>\n\n\n\n<p><strong>The following are some of the most common issues that customers encounter when automating inventory counting:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Inventory count procedures and matching of insights gained to <strong>inventory records<\/strong> take time.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>Full inventory counting may cause delays in certain <strong>manufacturing or warehouse operations<\/strong>.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>Employees are diverted from routine and strategic tasks that cannot be automated.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>Inventory counting is a time-consuming process prone to human error and bias, impacting inventory reports and balance sheets.<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"768\" src=\"https:\/\/www.fusioninformatics.com\/blog\/wp-content\/uploads\/2022\/06\/Brown-Plain-Gantt-Chart.jpg\" alt=\"Journey of Business Automation\" class=\"wp-image-8348\" srcset=\"https:\/\/www.fusioninformatics.com\/blog\/wp-content\/uploads\/2022\/06\/Brown-Plain-Gantt-Chart.jpg 1024w, https:\/\/www.fusioninformatics.com\/blog\/wp-content\/uploads\/2022\/06\/Brown-Plain-Gantt-Chart-300x225.jpg 300w, https:\/\/www.fusioninformatics.com\/blog\/wp-content\/uploads\/2022\/06\/Brown-Plain-Gantt-Chart-768x576.jpg 768w, https:\/\/www.fusioninformatics.com\/blog\/wp-content\/uploads\/2022\/06\/Brown-Plain-Gantt-Chart-380x285.jpg 380w, https:\/\/www.fusioninformatics.com\/blog\/wp-content\/uploads\/2022\/06\/Brown-Plain-Gantt-Chart-800x600.jpg 800w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Inventory counts can help you improve your inventory management.<\/strong><\/h2>\n\n\n\n<p>You already know how important it is to keep track of your inventory, whether you&#8217;re new to the game or a seasoned professional. That doesn&#8217;t make the task any less daunting or enjoyable.<\/p>\n\n\n\n<p>In this article, we will discuss how to make <strong>stock counting<\/strong> easier by covering the following topics:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>What exactly is an inventory count?<\/li><li>Why is it significant?<\/li><li>Inventory Counting Types<\/li><li>Using technology to count inventory<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What is an inventory count?<\/strong><\/h3>\n\n\n\n<p>An inventory count, also known as a stock count, is the process of tracking the inventory items in your warehouse that are available for sale. There are several methods for <strong>counting inventory<\/strong>, which best depend on factors such as the size of your business, frequency of counts, automation, and other factors.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote has-text-align-center is-layout-flow wp-block-quote-is-layout-flow\"><p><a href=\"https:\/\/www.fusioninformatics.com\/blog\/top-5-technologies-to-simplify-your-warehouse-management\/\">5 Technologies to Simplify your Warehouse Management<\/a><\/p><cite>Warehouse Management is not just how much space you got but how you use it! Definitely, technologies play a key role in shaping your business and managing your warehouse. What are the top technologies you should adopt to manage your warehouse? Let\u2019s discuss!<\/cite><\/blockquote>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Why is it significant?<\/strong><\/h3>\n\n\n\n<p><strong>Inventory counting<\/strong> is essential because it informs you of the amount of inventory on your shelves at any time. However, there are various other reasons why stock counts must be performed regularly.<\/p>\n\n\n\n<p><strong>A few of those include:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Avoiding stock outs or overstocking:<\/strong> Maintaining a regular inventory count gives you more information for demand forecasting-better planning results in optimized stock levels, which means less revenue lost.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Recognizing and preventing loss: <\/strong>Knowing what&#8217;s on your warehouse shelves allows you to identify when stock has passed its shelf life and when some of your inventory goes missing.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Improved accuracy:<\/strong> Knowing your stock levels provides greater clarity for your entire supply chain.<\/li><\/ul>\n\n\n\n<p>Inventory counting is essential because it tells you how much inventory is on your shelves at any time. However, there are numerous other reasons why regular stock counts are necessary.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Types of Inventory Counts<\/strong><\/h4>\n\n\n\n<p>As previously stated, the method you use to count your inventory can be influenced by various factors. Among the most common methods of <strong>inventory counting<\/strong> are:<\/p>\n\n\n\n<p><strong>Periodic inventory:<\/strong> Periodic inventory is a method used by businesses just starting with <strong>inventory control<\/strong>. It entails counting the entire stock on a weekly or monthly basis. While you will have an accurate count at the end of the day, those figures will not last long.<\/p>\n\n\n\n<p><strong>Inventory cycle counting<\/strong>: Inventory cycle counting is used when <strong>periodic counts<\/strong> become too frequent. It entails counting a portion of your inventory each day for a month to count the entire stock. These counts can identify discrepancies and trends in damage, shrinkage, and spoilage.<\/p>\n\n\n\n<p><strong>ABC counting:<\/strong> This method employs cycle counting but incorporates more data. This entails prioritizing your products based on their price and popularity. &#8220;A&#8221; items are the top 20% of items that sell the fastest and are the most valuable. The bottom 20% of items are &#8220;C,&#8221; and everything in between is &#8220;B&#8221;.<\/p>\n\n\n\n<p>&#8220;A&#8221; items are counted the most frequently, such as daily or weekly, &#8220;B&#8221; items less regularly, and &#8220;C&#8221; items the least often. This makes managing your stock counting calendar easier while maintaining a more accurate picture of your inventory levels.<\/p>\n\n\n\n<p><strong>Just-in-time inventory<\/strong>: Just-in-time inventory (also known as JIT inventory) is a method for when a supply chain is in sync. It coordinates receiving raw materials from the supplier as a customer purchases it, reducing waste in the form of inventory housing costs. However, this is risky because a single hiccup in the supply chain can disrupt the entire process.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Best Practices for Inventory Counting through technology<\/strong><\/h4>\n\n\n\n<p><strong>Conventional manual inventory counts<\/strong> are performed on paper by hand. However, this procedure is time-consuming and prone to human error. You can use technology to speed up and improve the accuracy of stock counts.<\/p>\n\n\n\n<p>The following are some examples of inventory counting technology:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Barcoding\/RFID<\/li><li>Lot control<\/li><li>Enterprise resource planning (ERP) software<\/li><\/ul>\n\n\n\n<h5 class=\"wp-block-heading\"><strong>Barcoding\/RFID<\/strong><\/h5>\n\n\n\n<p>One method of tracking inventory levels and movements is <strong>barcodes<\/strong>, <strong>RFID<\/strong>, or <strong>QR codes<\/strong>. Although some manual labor is involved in this automated process, inventory management is automated. To begin, determine whether your product already uses a format that you can use, such as <strong>UPC codes<\/strong>. Then decide where you want to add barcodes and what type to use.<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><strong>Lot control<\/strong><\/h5>\n\n\n\n<p>By this method, You can easily locate and track items for details like expiration dates, recalls, country of origin, materials, and more by assigning a lot ID to each item in your inventory. Lot control uses the ID to ensure <strong>regulatory compliance<\/strong> by, among other things, shipping items that cannot be combined separately, identifying hazardous materials, and restricting sales to licensed customers.<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><strong>Enterprise resource planning (ERP) software<\/strong><\/h5>\n\n\n\n<p>As your inventory system improves in stock counting, use <strong><a href=\"https:\/\/en.wikipedia.org\/wiki\/Enterprise_resource_planning#:~:text=ERP%20provides%20an%20integrated%20and,%2C%20purchase%20orders%2C%20and%20payroll.\">ERP software<\/a><\/strong> to track your inventory. Automated counting tools are not only available but also the norm. Cycle counting is performed regularly by ERP software; The results are then used to guide the rest of your <strong>inventory process<\/strong>. Furthermore, your inventory data is always up to date and available across your organization, ensuring that everyone in the supply chain is on the same page.<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><strong>In summary<\/strong><\/h5>\n\n\n\n<p>Most of you reading this might already do stock counts regularly. Or perhaps your company is growing, and your current method of stock counting is no longer adequate. Regular, <strong>pre-determined inventory counts<\/strong> are critical to business and revenue growth through technology or a different method of calculating stock levels.<\/p>\n","protected":false},"excerpt":{"rendered":"Many businesses conduct regular physical inventory counts as part of their annual financial accounting practices. Large companies with&hellip;\n","protected":false},"author":6,"featured_media":7784,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[2040,1992],"tags":[822,1952],"class_list":{"0":"post-9406","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-manufacturing","8":"category-transportation-logistics","9":"tag-digital-transformation","10":"tag-warehouse-management"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Best Practices for Automating Inventory Counting<\/title>\n<meta name=\"description\" content=\"Inventory counting is a critical process in warehousing. 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