Although conducting annual physical inventory audits can be a cumbersome process, it is a necessary warehouse inventory management step to ensure productivity. While an inventory count can be a seamless and accurate process, too often it trips up warehouse and inventory management staff because they rely on faulty processes to conduct the task.

To make sure physical inventory counts run as smoothly as possible, be sure to avoid making these five mistakes:

  1. Relying on manual processes: Once upon a time, every warehouse and store had to track and note all physical inventory by hand with a pen and paper. While this method may have a long track record, it also introduced a number of problems. Primarily, any system that relies so heavily on manual efforts is rife with error, and this is especially the case with larger operations. Thankfully, companies nowadays can avoid these headaches by adopting advanced inventory control systems that rely on physical inventory software to automate these processes. For example, instead of counting every item by hand, organizations can use a barcode scanning program instead.
  2. Not syncing physical inventory counts with ERP: One of the many benefits of enterprise resource planning (ERP) software is that it makes data accessible to all business departments. Although some warehouse managers are used to operating in an environment in which only internal auditing professionals cared about physical inventory counts, today's data-driven corporations require far more information sharing. To facilitate this process, businesses should make sure their Microsoft Dynamic NAV solution is optimized to make inventory data available to all interested parties.

  3. Picking a busy time of year: Since physical inventory counts can be an intensive process, companies need to devote enough time and resources to the undertaking. Stanford University recommended conducting these assessments during the summertime, as those are typically quieter months for many businesses. However, the best time of the year may vary depending on organizational need and availability. For example, a toy retailer may want to hold its counts in the fall, before the busy holiday shopping season.
  4. Putting the wrong people in command: Organizations should establish a clear chain of command prior to the undertaking. Brigham Young University – Hawaii recommended putting those with extensive prior experience in inventory counts in charge. Also, the ideal leader will have experience with the specific area being overseen, as this knowledge can often help expedite the counting process.

  5. Expecting everything to be done right the first time: Even with a barcode inventory system, organizations must account for human error during physical inventory counts. Since the efforts can be time-consuming, some employees may be tempted to cut corners and ignore proper protocol. Because ensuring accurate physical inventory counts is so critical, organizations should double-check their tallies. Stanford said that in certain instances, managers may even want to conduct three or four counts just to make sure the numbers are guaranteed accurate.

For more information on improving efficiency with technology, download the free white paper entitled " Keeping the Physical World and the Virtual World in Sync" from DMS today.