Mastering Year-End Inventory: Your Guide to Smoother Counts and Greater Accuracy 📦💰

Each week, I'll delve into subjects that resonate with businesses of all sizes across various industries equipped with warehousing capabilities. 

My aim is to enhance the performance of your warehouse and enable your Warehouse Operations TEAM to reach their full potential.

Today's featured subject: Mastering Year-End Inventory: Your Guide to Smoother Counts and Greater Accuracy 📦💰

The calendar is quickly approaching everyone's favorite time of the year, PHYSICAL INVENTORY time. 📅 

We're so eager to learn if we've been bad or good at managing our inventory. Since most dread the year-end inventory process, I'm guessing that the question of "how bad is it" will be asked A LOT in the coming weeks. 

However, it doesn't have to be that way, and I would like to share some planning tips and suggestions that I've used to help make this process go smoother and help improve the results.

Who is responsible for Inventory Records Accuracy in your company?

Answer: EVERYONE. Because as a TEAM, everyone should each take responsibility and it's this same team that should begin the preparation, TODAY! 🤝

• Site Preparation 🧹: Utilize 5S techniques to keep the Warehouse VERY Clean, Orderly, and Everything in Its PROPER PLACE to make counting easier.
• Inventory Preparation 📋: Clean and organize inventory areas before the big day. You can perform pre-counts on certain areas, especially for items that don't move often. Physically segregate any inventory that should not be included in the count and label it accordingly.
• Inventory Instructions 📝: Have written instructions for the physical inventory count, prepared by management, distributed in advance, and reviewed with employees involved. Use maps to assign areas of responsibility.
• Count Sheets/Tags 📄: Designate a responsible employee to monitor and control the distribution, use, and return of count sheets or tags. Keep track of unused, voided, or mutilated sheets/tags.
• Inventory Movement 🚚: Minimize or halt inventory movement during the physical inventory. Ensure proper documentation and monitoring if movement is necessary. Failure to control and account for inventory movement could lead to nightmares when reconciling counts.
• Verification Checklist ✅: Verify received items, shipped orders, and Work-In-Process (WIP) Inventories. Be 100% thorough because this Physical Inventory will be the FOUNDATION of future Daily Cycle Counting.
• Counting Procedures 👥: Teams of two should count together, with a supervisor assigned to each area. One counts the product, and the other records the count. Each count sheet should contain enough information for potential re-counts. Accountability is key.
• Recounts 🔁: Supervisors for each area should perform recounts on a sample basis to assess accuracy and diligence of the count team. This helps avoid errors during year-end financial audits.
• Damaged/Obsolete Inventory 🚫: Segregate damaged or obsolete inventory before the physical inventory. Count teams should be vigilant during counts for such items. Record this information for later analysis.

There's a lot of activity both leading up to and during the physical inventory count. By considering the above, you should be able to get your inventory recorded as accurately as possible and, with less frustration. Remember, this is MONEY ($$) in the warehouse, not just components and materials! 💰

One final piece of advice to consider once the Year End activities have calmed a bit, consider implementing a Cycle Count Program in the coming year. 

Your goal should be to minimize or ELIMINATE these costly & inaccurate year-end inventories. Once fully implemented, cycle counting can provide sustainable accuracy levels of 98-100%. 🔄💯

So now, let’s learn from one another:

• What strategies have you previously implemented to prep and run your Physical Inventory?
• Of the reverse, what challenges have you faced during the PI and what did you do to address these?
• Share your success stories and tips in the comments below. 
• Let's continue the conversation and learn from each other! 🚀

Until next week, remember that CONTINUOUS IMPROVEMENT is the KEY to Unlocking Warehouse Efficiency! 

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About Joe Crews

Joe Crews is the Founder of Key Warehouse Solutions, a Warehouse Operations Consulting firm based in Winston-Salem, North Carolina. With over 30 years of Warehouse Management experience, Joe is passionate about helping companies nationwide achieve and maintain a HIGHLY EFFICIENT WAREHOUSE through improvements in 5 KEY areas of their operations.

• Connect with me on LinkedIn: LinkedIn Profile
• Visit my website: Key Warehouse Solutions Website
• Reach out to me via email: keywarehousesolutions@gmail.com