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Counting stock

Cycle counts, the annual stocktake, and why the number in the system stopped matching the number on the shelf.

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Every stock record drifts. Items get taken without being recorded, two similar products get confused, a return goes back on the shelf and nowhere else. After a year the system and the shelf disagree, and nobody knows by how much.

This section is about closing that gap without shutting the business for a weekend: counting in small regular batches, measuring accuracy honestly, and investigating variances rather than adjusting them away.

Counting has a labour cost that is almost never measured, which is why the annual stocktake keeps being chosen over the cheaper alternative. A fortnight of recording how long counts actually take — with a spreadsheet or a task timer — usually shows that cycle counting costs less in total than the one weekend everybody dreads.

Counting stock8 min read

Why the number in the system is wrong

Stock records do not drift because people are careless. They drift because a dozen ordinary events each move stock without moving the record.

When labour is part of the cost, a short period of task-level recording is more useful than estimates. For a workplace example of structured time capture, see this page.

For a broader reference on product and location identification, GS1 standards document widely used supply-chain identification standards.

For general measurement and standards context, the National Institute of Standards and Technology publishes public technical references and standards resources.

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