Stored cargo must always be separated from the ground, using pallets, tarpaulin, shelving, or racking. Warehouse managers should be constantly motoring the status and condition of stock on hand. All handling units should appear in good condition, and be free from avoidable damage of any kind, including water damage, punctures or rusting. If cartons or items appear to be crushed, punctured or experiencing damage from regular wear and tear, they must be separated, repaired (if possible), and returned to inventory in a manner that prevents future damage.
It is strongly advised that a full stock count should be conducted at least every six months, if not more frequently depending on the size of the facility and the overall volume of throughput. Stock counts should be conducted “double-blind” – a method to reduce human error or tampering of individual counting. How a double-blind stock count works:
- Two teams of two persons each (four persons total) are identified in advance. These two teams will conduct the count sequentially. All four persons should ideally come from different parts of the organization, and not have direct control over the stock or direct financial incentive to tamper with stock counts.
- Warehouse activities are completely halted during the time of the stock count. This means that no cargo goes in or out, and stored items are not moved around the facility. Ideally, only counters should be let inside the facility during counting.
- The two team should meet in advance to ensure all parties understand the process.
- The first two-person team starts at one far end of the warehouse/storage facility and begins counting, using a pre-defined common understanding (example: Piece count per shelf, piece count per line item, etc). The first team member counts, while the second team member records on a pre-defined recording system.
- The second two-person team begins after the first two-person team. The second count can begin after the first count has ended, or even by waiting for only a few minutes.
- The second team will count using the same agreed upon common understanding. The second two-person team can start from the same location as the first team, or start from the opposite side of the warehouse.
- Once the full warehouse/stockroom has been counted fully by both parties, both parties compare counts. Any place where there are discrepancies between the two counts, both parties must go to that stock location and reconcile the differing counts.
- Only after both teams have come to a mutual agreement on the stock numbers can the count be considered closed.
Some agencies prefer to have an appointed person to oversee or manage the counting teams. Agencies may also choose to employ the “stock tag” system to facilitate counting. The overall size of the warehouse and quantity of items stored within it will determine the length of time required to complete a full double-blind count. A small facility could be completed in a just a few hours, while a large facility might take several days. Humanitarian agencies should consider their storage setups when designing a stock count system.
There are a variety of methods for conducting physical inventories. Agencies should review different inventory methods, and set up guidelines and time intervals for conducting inventories, including ad hoc and regularly scheduled annual inventories.
Throughout the course of managing physical stock, damaged items will be discovered, either as a result of age, expiration, mishandling, or even from items that were defective in the first place. As damage items are discovered, they must be clearly marked and addressed. Some damaged items can be repaired, especially if damage is only to outer packing. An item that is ultimately still usable, but has damaged outer packing can be repacked into new cartons/bags where available, the packaging itself can be taped or sealed. Even if there are no replacement cartons/bags available, the usable items can be stored loose on the racks/shelf/stack and be marked for usage first during the next pick order.