A stocktake shows where to investigate.
A difference between physical stock and ERP records is a starting point for investigation. Counting errors are one possibility, but delayed receipts, unrecorded transfers and late consumption entries may also contribute.
If the response is limited to adjusting the balance, the issue may return. Trace the item’s journey and the timing of each transaction before deciding what to change.
Four places where the workflow can break down.
1. Goods receipt
When are materials entered in the system? Do quantity, unit of measure and item selection match the documents and physical delivery? An incomplete receipt affects everything that follows.
2. Internal movements
Materials may be moved physically without their ERP location being updated. The total may appear correct while availability by location becomes difficult to explain.
3. Consumption and returns
Review when production consumption is recorded, how residual materials are treated and which rules apply to returns. Clear ownership matters for each activity.
4. Reporting
Two reports may use different filters, periods or definitions. Before comparing values, check that they describe the same thing.
Excel can help. The rules must be visible.
A spreadsheet can be useful for reconciliation or exception analysis. Risk arises when it becomes the only place containing the corrections and explanations needed to understand the data.
Formats matter too. An item code treated as a number in one file and text in another may fail to match. Codes with leading zeros need particular care: converting them to numbers can remove information.
Before automating a comparison, clarify the identifiers, data sources and interpretation rules.
Five questions for your next stocktake.
- Do the reports being compared use the same definition of stock?
- Have all relevant movements been recorded up to the agreed cut-off?
- Do we know who investigates and approves each discrepancy?
- Can we trace manual adjustments and their reasons?
- Can another person reproduce the report using the same instructions?
This is a starting point for a discussion between logistics, production, finance and the ERP administrator. It does not replace your company’s stocktaking procedure.
Start with a limited but complete workflow.
Select one item category or location and a defined period. Compare documents, ERP entries and the physical situation. Record exceptions and confirm their causes with the people performing the work.
Then establish which issues require a process change, training or a configuration adjustment. Only after that should you decide whether automation is needed.
A stocktake that is easier to explain starts with consistent daily operations.