Stocktake

North America usually calls it a physical inventory count.

Most stores do one a year, on a Sunday, badly.

Running one that works

• Stop selling and stop receiving while it runs, or the count chases itself
• Count by bin location, not by product list
• Two people per aisle: one counts, one records
• Recount anything more than a few units out before you correct it
• Write down the reason for every gap, not just the number

Scan rather than write. A count typed from a clipboard picks up its own errors on the way into the system.

What it is good for

Proving the total. An accountant needs a real figure at year end and a stocktake is how you get one.

It is much weaker at telling you why the figure is wrong, because twelve months of causes have piled up into one number.

Where it goes wrong

The correction is applied and the day is forgotten. You have a true number for one morning a year, and it starts drifting again on the Monday.

Count the fast lines weekly with cycle counting and the annual stocktake stops producing surprises. What is left after that is your real shrinkage.