What’s Stock Counting? That means, Significance, & Methods – Buzz Credit score

You’ve stock – however are you aware exactly how a lot you’ve got? 

It may be tempting for ecommerce manufacturers to assume that, so long as you’ve got sufficient models to satisfy demand, the precise rely doesn’t matter. However correct stock counts are extremely vital, as they affect decision-making, gross sales, accounting, replenishment, and different key facets of your ecommerce operations. 

On this article, we’ll dive deep into what stock counting is, overview some counting strategies you should utilize, and discover greatest practices that can enhance the stock counting course of.  

What’s stock counting? 

Stock counting is nearly all the time a structured course of, starting with grouping stock, counting every particular person unit of each SKU, and recording the numbers (both manually on paper and pencil or scanning product barcodes to replace data in a cloud-based stock administration system).  

This course of helps you confirm whether or not your stock data match your precise bodily inventory and determine any discrepancies within the knowledge. 

Why is stock counting vital? 

Stock counting could appear to be a trivial or menial process, however it’s completely worthwhile. It’s because stock counting helps you: 

• Detect discrepancies in your stock data – Stock counting is a key step within the stock reconciliation course of, because it reveals any variations between your present stock knowledge and your precise bodily stock. This helps you preserve correct stock data, which in flip facilitate higher decision-making in your half. 

• Replenish inventory ranges accurately – When precisely how a lot stock have readily available, you possibly can reorder simply the correct quantity of inventory to satisfy buyer demand with out over- or understocking. Additionally, you will have a greater concept of once you’ll have to replenish, which helps you keep away from expensive stockouts.   

• Keep away from overselling – When you assume you’ve got extra stock than you truly do, you run the chance of promoting inventory you don’t have, creating backorders, backlogs,  cancellations, and disgruntled prospects. Counting stock frequently offers you correct knowledge to work with, so when to when to flag objects as out of inventory.  

When do you have to run a listing rely? 

Stock counting schedules differ for each enterprise. Relying on the dimensions of your operations and the varieties of merchandise you promote, you might have to rely your stock month-to-month, quarterly, bi-annually, and even yearly. Ideally, you’ll need to time your stock counting together with your stock accounting schedule. 

Moreover, you might want to rearrange a counting to coincide with main occasions (comparable to a listing write-off). Firms may also need to think about a radical stock counting in the event that they frequently expertise points with stock discrepancies, stockouts, shrinkages, and extra stock. 

4 varieties of stock counting strategies 

Whilst you may consider stock counting as an easy course of, however there are a number of completely different approaches to it – and which method is greatest for your enterprise is dependent upon your model’s sources, time availability, and instruments.  

Listed here are among the commonest varieties of stock counting strategies to contemplate to your model. 

1. Full periodic stock rely 

A full periodic stock rely is a periodic stock counting methodology the place you rely whole bodily stock in a single sitting, so you may get a complete and correct overview of your stock inventory.  

Since a full stock rely is a time-consuming course of, it’s sometimes carried out yearly or bi-annually to keep away from disrupting enterprise operations. Even then, the sort of bodily stock counting course of is very labor intensive, usually requiring firms to dedicate most of their workforce for it. Some could even want to herald momentary workers to assist with the rely. 

For small companies particularly, this may put a pressure on their operations. Seasonal companies may be at a drawback, as they’ll have to strategically time their counts to be throughout slower months, which can not all the time coincide with their stock replenishment schedules. 

2. Cycle rely 

Stock cycle counting is a well-liked various to a full stock rely, because it entails counting small batches of stock frequently. Stock is split into teams based mostly on location (i.e., one warehouse aisle) or kind (i.e., all clothes SKUs), and counts are carried out frequently (normally each day or weekly) for a selected group at a time. 

This enables for a extra environment friendly stock counting course of, as companies don’t have to shut down their whole operation in the course of the rely. Furthermore, it permits them to nip points and discrepancies within the bud, for the reason that counts are carried out frequently as an alternative of on the finish of a complete fiscal 12 months. 

3. Perpetual rely 

Whereas some manufacturers favor full counts and cycle counts that happen every now and then, different manufacturers need to hold an ongoing, steady tally of stock that’s continuously up to date.  

A perpetual stock system entails constantly updating your stock rely based on the newest transactions, so your stock knowledge is mechanically up to date each time a sale or buy occurs. In different phrases, your stock rely is carried out in real-time as objects are added by means of receiving or subtracted by means of gross sales and order achievement. 

This is among the best and correct stock counting strategies. Nonetheless, it requires subtle expertise and vital funding in instruments like RFID tags, barcode scanners, and cellular units. These instruments have to work seamlessly to make sure that perpetual stock counting features as meant. 

4. ABC stock counting 

ABC counting is a cycle counting course of used alongside the ABC stock segmentation methodology. Stock objects are divided into A, B, and C classes based mostly on worth or gross sales frequency. Class A objects have the best worth or turnover and are counted most continuously. In the meantime, class C objects consist of things with the bottom worth or turnover and are counted least continuously. 

This course of permits companies to focus their stock counts on high-value merchandise or SKU objects which might be most vulnerable to alter as a result of excessive turnover.

Greatest practices for environment friendly stock counting 

As a result of correct stock counts are so essential to your ecommerce model’s success, it’s vital to take the time to optimize your counting course of (no matter it seems to be like). Listed here are a few greatest practices to implement the following time you rely your stock.  

Set up your stock house 

Having a structured storage system that organizes your stock makes it simpler to rely models accurately. Your warehouse setup ought to: 

• Group every SKU collectively and retailer every group in its personal distinct location, which makes it simpler to rely all of the models of a single SKU rapidly and successfully.  
• Be organized in a method that enables rely groups to maneuver rapidly from one stock group to a different. 
• Take away any muddle or trash and put away stock of their designated areas. 
• Organize stock objects neatly (moderately than haphazardly piled on high of one another or shoved collectively in tight areas) to forestall counters from by accident lacking models of their rely. 
• Place barcodes and labels on the product in order that they’re accessible and distinguished. 
• Leverage stock storage options that can help you strategically retailer objects for simple counting and retrieval. 

Leverage stock and warehouse administration expertise 

Stock counting could be a very environment friendly course of, particularly in the event you ditch guide knowledge entry. Manually recording your stock knowledge (as an illustration, with paper and a pencil) could be time-consuming and vulnerable to errors; as an alternative, think about implementing stock administration software program and warehouse administration methods to hurry up and streamline the method. 

These methods can help you mechanically file and monitor your stock motion, which can replace your stock rely in actual time, so each transaction that provides or subtracts stock shall be accounted for. This lets you effectively replace your stock rely in actual time. 

Warehouse administration methods like ShipBob’s WMS run a number of checks and balances all through the achievement course of, guaranteeing a excessive stage of stock accuracy. It unifies all of your stock data throughout a number of touchpoints and provide chain features, serving as a single supply of reality on stock counts. This reduces the chance of miscounts and ensures that you’ve essentially the most correct data in your inventory ranges. 

“A variety of our merchandise are related to one another, which may make choosing difficult – however ShipBob’s system has built-in checks and balances that ensure that the correct new merchandise are getting out to the correct prospects. This not solely minimizes errors and potential complaints, but additionally outcomes a greater buyer expertise that encourages them to repurchase from us.”

Connor Westby, Co-Founding father of NutriPaw 

Use barcodes and RFID tags 

You also needs to think about using stock administration instruments like barcodes and RFID tags to streamline the counting course of. These instruments can help you use scanners and sensors to mechanically seize stock knowledge and monitor motion throughout the warehouse. 

Barcode scanning simplifies the stock counting course of as a result of it permits rely groups to scan objects to rely them, and mechanically replace your stock data in doing so. This reduces the chance of human error and enhances stock accuracy. In lots of circumstances, it even automates some facets of stock counting as automated sensors perpetually seize and replace your stock knowledge all through the warehouse.   

Widespread stock counting challenges (and overcome them) 

Counting stock may sound like a easy process, however it may be surprisingly difficult. Companies could face a number of challenges that may create issues within the stock counting course of. A number of the commonest points manufacturers face when stock counting embody: 

Human error and miscounts 

When companies predominantly depend on guide processes and instruments to carry out stock counts, all the endeavor is very vulnerable to human error. Counting groups may simply miscount objects or by accident enter incorrect numbers throughout knowledge entry. This might result in inaccurate stock counts, which create points additional down within the provide chain. 

This additionally places manufacturers at a better threat of sudden stockouts and even extra stock. In some circumstances, it might result in errors of their monetary data, requiring vital work to reconcile. 

As such, it pays off to spend money on instruments that automate the counting course of and facilitate real-time stock monitoring, comparable to barcode scanners. That method, stock ranges are constantly up to date each time a brand new transaction takes place, guaranteeing a better stage of accuracy.  

“ShipBob’s achievement is definitely extra correct than our in-house achievement was! Once we have been choosing and packing orders, round 2% of them would have some form of high quality management challenge. ShipBob introduced that error price to primarily zero. We ship 1000’s of orders, and we’ve virtually by no means had mispicks, incorrect portions, or something like that. We’re additionally saving cash as a result of we don’t should pay to reship merchandise or lose revenue on returns, and it’s a greater buyer expertise.”

Charlotte Katona, President of Makesy 

Seasonal surges and inventory administration 

When companies obtain, retailer, and ship out quite a lot of stock in a brief span of time, it’s straightforward for stock to get disorganized, misplaced, or in any other case miscounted within the shuffle. That is very true for seasonal merchandise, and makes it difficult – however all of the extra vital – for seasonal companies to rely their stock and handle their SKUs accurately. 

When you promote seasonal objects and anticipate a surge in demand at a specific time, be sure that to arrange beforehand in order that stock shall be saved, organized, preserved, and counted correctly, regardless of the flurry of exercise.  

Useful resource and workers limitations 

Most stock counting procedures require enormous quantities of labor. Some companies dedicate a crew to carry out stock counts, whereas others could even have to allocate their whole workers to rely their stock. Workers limitations can considerably set again the method, particularly for smaller companies since they have an inclination to have a smaller workforce. This may create inefficiencies and main operational disruptions. 

Some could even tackle momentary workers to assist with stock counts, though this usually requires vital funding in coaching and onboarding (and due to this fact will not be all the time an choice for companies on a restricted funds). 

Whilst you’ll want some headcount to carry out a rely, it is usually attainable to enormously streamline the method by leveraging automation. Strive investing in automated software program and processes to assist workers, or implement automated alerts and real-time stock monitoring methods to simplify stock administration and save time.  

Even smaller operations will be capable to depend on these options for environment friendly and correct stock monitoring with out the necessity to amass an enormous extra workforce. 

Lose the stock administration headache with ShipBob 

With real-time stock monitoring and highly effective stock administration instruments, ShipBob enhances counting effectivity and accuracy. 

Monitor your stock in actual time with ShipBob’s WMS 

ShipBob’s WMS is an all-in-one platform that integrates your order and stock knowledge from throughout the provision chain whereas powering your warehouse operations. It contains a number of checks and balances and real-time monitoring as stock strikes by means of the warehouse, guaranteeing that you’ve essentially the most up to date stock knowledge always. 

With built-in perpetual stock counts that replace inventory ranges mechanically when stock is offered, acquired, fulfilled, shipped, and returned, your model can obtain unparalleled accuracy and effectivity within the stock counting course of. 

“ShipBob’s WMS has utterly reworked our operations. It makes the receiving course of very straightforward and simple, and the stowing tag system that’s constructed into the WMS has been so useful. We even have a devoted location for each SKU and corresponding barcodes that pickers scan to replace stock counts within the ShipBob dashboard in actual time, which we by no means had after we have been managing stock by means of Shopify. Every part is so seamless now, even with 1000’s of SKUs in our portfolio.”

Tim Poyer, VP of Operations and Logistics at Elwood Clothes  

Simplify stock counts with automated options 

ShipBob’s expertise works seamlessly with a listing scanner system in order that your stock knowledge is mechanically captured and up to date in your data. Your warehouse workers can scan incoming and outgoing stock, which can mechanically be recorded by the system. 

Maximize stock accuracy with customizable cycle counts 

The ShipBob WMS helps clever cycle counts, with the pliability to decide on a way that works greatest for your enterprise. You possibly can customise your cycle counts to give attention to high-priority stock classes, and give attention to objects which might be most certainly to expertise fluctuations in amount or are most certainly to have an effect on your operations. That method, you possibly can guarantee a better stage of accuracy for high-value objects or merchandise that promote rapidly. 

Cut back prices with clever stock distribution 

ShipBob’s Stock Placement Program allows retailers to strategically optimize their stock distribution for pace and cost-efficiency. This system allows you to ship your whole stock to at least one hub location, the place our proprietary algorithm determines the optimum stock distribution technique (based mostly on your enterprise’s precise order knowledge). 

Stock is then distributed between completely different achievement facilities based mostly on components like demand and historic gross sales efficiency. That method, orders are shipped out from essentially the most excellent achievement middle to cut back price and enhance supply speeds. This lets you decrease your achievement prices as an entire whereas guaranteeing optimum inventory ranges throughout key areas. 

“The beauty of ShipBob’s Stock Placement Program (IPP) is that it makes stock allocation a lot simpler. Attempting to determine how a lot of what stock to ship the place could possibly be wildly advanced for our provide chain managers – however since ShipBob mechanically tracks our order and transport knowledge for us, that knowledge principally tells us our optimum stock distribution.

We additionally get automated reminders notifying us properly earlier than stock ranges are getting depleted, so we don’t should continuously be checking our inventory ranges. IPP has saved our provide chain crew quite a lot of additional work, they usually additionally really feel actually supported by ShipBob and know that they’ll flip to them for assist.”

Tyler McCann, Co-Founding father of Style Salud  

ShipBob’s dashboard additionally delivers real-time stock counts in any respect ShipBob achievement facilities the place you retailer stock, so that you all the time have visibility into inventory ranges (with out having to be in all places without delay).    

Stop stockouts and overstock with data-driven forecasting 

A part of environment friendly stock counting is sustaining optimum inventory ranges. With ShipBob’s stock analytics software program, you may get complete insights into your stock efficiency, KPIs, and historic gross sales knowledge. These insights can then be used for correct demand forecasting to tell your replenishment technique. 

Not solely does this enable you keep away from costly stockout prices by timing replenishment accurately, but it surely additionally ensures that your warehouse isn’t holding extra inventory. This prevents warehouse crowding and disorganized stock, guaranteeing a extra seamless stock counting course of. 

Furthermore, you should utilize your demand forecasting insights to plan your stock counts based on your replenishment schedule. That method, you possibly can enhance counting effectivity by lowering the necessity to double rely (as soon as earlier than replenishment and as soon as after replenishment). 

“Now we have over 5,000 SKUs, however that hasn’t been an issue for us in working with ShipBob. Their dashboard offers us visibility to stock administration, which has been wonderful. ShipBob’s stock counts are very correct to what’s on-hand, and we will all the time see what now we have out there there.”

Charlotte Katona, President of Makesy  

For extra data on how ShipBob could make stock counting – and stock administration – simpler, click on the button beneath to get in contact. 

Stock counting FAQs 

Under are solutions to essentially the most generally requested questions on stock counting.