Step 1: Preparation and Planning
It is important to undertake appropriate preparation and planning. This should include:
1. Establishing the priorities for the stocktake – are you merely counting or should the stocktake focus on any specific areas or issues?
2. Identifying which areas and materials to be included – don’t laugh I have seen stocktakes where there were major misunderstandings relating to what and where to count.3. Ensure availability of appropriate Personal Protective Equipment.
4. Identify problem materials (for example, hard to count, hard to reach or hazardous material) and resolve the problem by planning ahead how to handle the materials.
5. Ensure that participants are familiar with how they are to count problem materials.
6. In conjunction with local Supervisors, determine whether to halt or minimize operational activities at any particular location during the stocktaking period.
7. Determine how to track any movements of materials during a stocktake.
8. Ensure that cost data is up to date prior to stocktake finalization.
9. Ensure that the count team has appropriate training before the stocktake.
10. Identify who to contact for resolving issues that arise during the stocktake.
Step 2: Physical Materials Count
Obviously, this is the step that gets the greatest attention. Here are a few points that can help improve results:
11. Appoint a Stocktake Supervisor for each location. The Stocktake Supervisors are responsible for ensuring that procedures are followed and that a full count is completed in their area.
12. Ensure the identification of all deliveries, redundant materials, damaged materials and any returns to the store.13. Ensure that the inventory management system is updated before actually starting the count.
14. Take care to correctly identify materials and ensure that the quantities recorded are in the correct unit of measurement.
15. Mark material counted to ensure it is only counted once. This also helps identify items that counters miss.
16. Include an independent observer to make random checks of physical counts. The proportion of items checked will be determined by the independent observer based on their initial findings but should be a minimum of 10%.
17. Conduct a final tour of the location(s) to ensure that all materials have been counted, all stock count sheets completed and that that the area is ready to be released for normal activity.
Step 3: Finalization
Finalization involves entering the count data, checking and resolving inconsistencies, gaining approval for variances or write downs, updating cost data and finally closing off the stocktake. However, there is one more important task:
18. Following any stocktake the count procedures should be reviewed to determine how they may be modified to improve the next count. The best time to make adjustments to the next stocktake’s instructions is immediately after the current count is completed.
Stocktakes and cycle counts can be seen as a necessary evil but a little extra care and attention can make them both effective and efficient.
