How to carry out a quality inventory?

What is the purpose of an inventory?

The stocks inventory makes it possible to note the value of the products which are physically in stocks and to make the difference between the quantities indicated in the management software and the quantities actually present. If discrepancies are observed between these two quantities, they highlight problems in the storage process or traceability, and even potential theft.

Improving the method of stocktaking will therefore have positive consequences on the balance sheet. It will, for example, avoid dead stock, save on warehousing costs and overall increase the ROI of your plant.

Prior organization

In order to carry out the inventory of stocks, it is necessary to be organized beforehand.

• Get organized around what you need to count, whether it is goods, raw materials, semi-finished products, work-in-progress or fluid stocks.
• Establish a clear procedure that you will share with the personnel involved.
• Make sure during operations that the procedure is followed. Ideally, you should work in pairs to avoid mistakes due to fatigue or poor concentration.

Set a strategic date

Timing is critical to a successful inventory. It should be done when inventory is low or close to the close of business.

If your business has many different products, you don’t have to do an annual inventory, but you can do a rotating inventory to avoid freezing the business for too long.

This second type of inventory consists of taking several counts during the year, grouping them by storage location for example.

How to carry out an inventory?

In order to carry out an accurate inventory, it is necessary to use count sheets, also called inventory tables, to be completed, in which all the elements useful for the traceability of the products are gathered. If you do not already have access to count sheets, you can find an example in the Guide to conducting an inventory from Roche Formation.

There is another way to make an ultra-accurate inventory. Zozio offers the inventory management service through its solution based on indoor and outdoor geolocation.

Our system of visualization and analysis of field data extracted thanks to geolocation in real time facilitates the inventory of stocks.

Bastien Triclot, founder of Zozio

Stock valuation

When the counting sheets have all been filled in, the logistics manager can retrieve all the sheets and compare their values with the quantities in the computer tool.

Valuation of quantities

The last step consists in valuing the quantities according to their purchase price in order to be able to transmit it to the accounting department. Several methods can be used, such as the weighted average unit cost (WAC), or the first-in-first-out (FIFO) method.

By respecting the different steps, you guarantee your company a quality performance that will positively influence the industrial production.

Written by Emma Guignard