Mis-picks are more likely with fast-moving goods, and high-value items are prone to shrinkage.
It is suggested therefore that fast-moving and high-value items are counted monthly, medium sellers are counted quarterly and slow-moving items either once or twice a year. The following percentages can be used to ensure a comprehensive count:
● 8 per cent of A items counted weekly (ensures each SKU is counted approximately once per quarter);
● 4 per cent of B items counted weekly (counted twice per annum); and
● 2 per cent of C items counted weekly (counted at least once per annum).
The accuracy of the counts will also determine the frequency. A high error rate should result in more frequent counts until the accuracy improves. Each discrepancy needs to be investigated and procedures put in place to ensure that there is no repeat of the problem. Increasing the frequency to daily ensures a more accurate count; however, this will depend on the number of product lines, available resource and the cost of that resource.
The trade-off here is the cost of the error against the cost of discovering it in
the first place. As mentioned previously, a number of auditors will be happy (or as happy
as they can be) if stock in the warehouse is counted at least once during the year.
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