Statistical Inventory Sampling
Full inventory counts are expensive and create considerable personnel costs and effort every year. An alternative to a full inventory count is the sampling method which is legally recognized by auditors and financial authorities. Using this method, companies achieve high saving potentials without any impact on their operative processes.
Stock Taking During COVID-19 Pandemic Inventory sampling can be a solution
Inventory sampling can be done by single, individually counting employees.
The next stock taking is up, but restrictions and health risks due to the COVID-19 pandemic prevent the stock taking from being performed as usual, as a concentrated action with a large number of employees involved.
In this case, inventory sampling can be the ideal solution for you. It reduces the actual effort to a minimum and is ready to use within a few days, thanks to a cloud solution.
Thus, despite the currently uncertain situation and even temporary staff shortages, the inventory sampling method will provide you with meaningful results for your balance.
Overview
Efficient, precise and, above all, cost-efficient - this is how an ideal annual inventory count is imagined by companies. Although the sampling-type inventory has been a legal option for over 40 years, many companies still perform their inventory in a conventional way, and this despite the fact that inventory sampling is more cost-efficient compared to the full inventory count.
Contact
Christian Günther
INVENT XPERT Specialist
Tel: +49 (0) 2408 / 9456 - 1333 invent@informinform-software.com
Solution INVENT XPERT Features
INFORM is one of the pioneers of statistical inventory sampling and has more than 35 years of experience in developing inventory sampling software. The features of INVENT XPERT include:
- Flexible installation
There are three installation variations of INVENT XPERT: on premise, as a cloud version and a cloud service. You can choose the option that best fits your company.
- Easy to implement
INVENT XPERT can be connected quickly and safely to any ERP or WMS system using simple interfaces.
- Web technology
The application is web-based and data can be retrieved using a simple browser - also on mobile devices.
- Intuitive operability
The system is easy to use thanks to its uncluttered, cutting-edge user interface. With comprehensible workflows, you can carry out the inventory sampling procedure with great ease.
- Estimation procedures
For inventory at record date and perpetual inventory sampling, the software uses the difference estimation extrapolation method. This procedure is recommended by the Institute of Public Auditors in Germany.
- Test procedures
The sequential test is the most efficient inventory sampling method included in the INVENT XPERT portfolio. This testing procedure can be used in warehouses with a very precise inventory management. When inventory management is very accurate, users receive meaningful results after counting only 30 samples.
- Legally recognized and certified
INVENT XPERT is recognized by financial authorities and received its most recent certification in 2018 from PwC.
Benefits
With INVENT XPERT companies can:
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reduce counting costs by up to 95%
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reduce counting effort by up to 99%
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carry out their inventory parallel to their daily business operations
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shorten or eliminate warehouse closures and production downtimes
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avoid overtime
Manufacturing and Wholesale
An effective alternative
Statistical inventory sampling is an effective alternative to complete inventory counts for manufacturing and wholesale companies. The procedure is particularly efficient in large warehouses - in automated warehouses, it can reduce manual counting work by up to 99%. INVENT Xpert turns counting days into working days.
Inventory sampling is suitable for all companies with a warehouse containing at least 1,000 stock keeping units. The business must have an IT-supported inventory controlling system with items organized by type, quantity and value. This is usually an ERP or warehouse management system. A higher level of efficiency can be reached if 20% of the items in the warehouse account for about 80% of the stock value (stock phenomenon). An additional requirement for implementing the sampling procedure is highly accurate inventory data.
Retail
Reduce counting time by up to 70%
INFORM offers a special version of its inventory sampling solution for retailers. INVENT enables retailers to perform inventories flexibly, at a time that suits them. The dates for the stocktaking can be brought forward or moved back (in line with legal requirements) and an inventory can even be performed during normal operating hours.
The inventory sampling method carried out by INVENT requires a full stock take of a small section of the product range from each department. The remaining, far larger sections are calculated via samples. INVENT pre-determines the scope of the stock take in mathematically optimized intervals, ensuring the selection is entirely random while minimizing the counting involved. Compared to a conventional inventory count, the costs of this method are significantly lower. In practice, stocktaking times are reduced by 40 to 70%.
Legal Requirements
Business auditor approved
Inventory sampling is an effective alternative to conventional stocktaking and is officially recognized by German law. The legal foundations for this can be found in article 241 of the German Commercial Code.
At an international level, requirements and acceptance of the statistical inventory sampling results need to be clarified with individual auditors in the respective region or country. It is important to mention that this method has been formally approved by business auditors. Large auditing firms such as Ernst & Young and Price Waterhouse Cooper have for years been approving the inventory counting results provided by the INVENT XPERT system for all of our customers. It is also important to note that the mathematical core of the software system INVENT XPERT has even been certified by KPMG, and most recently, PwC.
References
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