22 March 2019
Cyclic Stock Take Vs. Annual Inventory Stock Take
Day-to-day management of the business and dealing with clients are all time consuming tasks for a business owner. Consequently to spend a full day counting stock and accessing inaccuracies is too much time to sacrifice.
Cyclic Stock Take has many advantages when compared to the traditional Annual Inventory Count. The method of stock checking is also dependent on the size of the organisation.
Annual Stock Take Explanation
Annual Stock Take is the counting of all the inventory on-hand. Most companies are engaging in an annual audit at the end of the financial year. In some cases, businesses conduct this every 6 months.
Cyclic Stock Take Explanation
Cyclic Stock Take is a method by which a category or set of SKUs of inventory is checked off periodically throughout any given year against the records in the system. This method offers minimal disruption to operational services. It doesn't require a significant amount of time to complete, by simply incorporating it into the weekly routine. The focus of cyclic stock take can be on the high value and sale volume stock that is most significant to the businesses sales.
Benefits of Cyclic Stock Takes
1. Improved Buying Decisions on the Purchase of Stock
With implementing cyclic stock take, it means that stock levels are continuously being monitored. Clearly shown in the system will be the items that are low in stock that need to be reordered. Due to the regular counts, trust can be associated with the inventory levels in the system.
2. Decrease Errors
With the decreased time between counting stock, this lowers the chance of potential errors in the system. Less errors as to the stock showing in the system compared to the actual stock on hand.
3. Minimised Business Downtime
It is important to include cyclic stock take as part of the operations weekly routine. Consequently the business is not suffering from an entire day focused on counting inventory.
4. Improving Stock Accuracy
It provides an accurate representation of your stock levels throughout the year and at any given time. As a result, business owners can have the confidence that the stock shown in the system is a true representation of the stock in the warehouse.
In conclusion, it is evident that the benefits of Cyclic Stock Take outweigh the dated method of the Annual Stock Take. There are many methods of Cyclic Stock Take. For example, a common method many warehouses are using is:
A-Type Inventory Items: Involves counting the stock regularly throughout the year, on items with the highest volume of sales.
B-Type Inventory Items: These SKU codes are counted several times in a year, they do not have such a high sale volume as A-Items and cost more for the business to store.
C-Type Inventory Items: Counted once or twice in a year and they take up the most of the inventory costs. These items are the slowest sellers and cost the most to store in the warehouse.