Why do we need two different methods of inventory (annual and physical)?
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The business side of it:
Annual inventory is supposed to
be done only once a year at the year end and supposed to cover all the
inventory in the warehouse. With continuous inventory we can count different
parts of the warehouse as many times as we want.
The technical side of it:
However, technically speaking, there
are not much difference between annual and continuous programs LX15 and
LX16. Both programs allow selecting particular storage bins create physical
inventory number and enter the actually counted values. Using annual
inventory - LX15 you can also count small parts of the warehouse many times
during the year.
Main Differences
The main difference is that in Continuous
inventory you have control over inventoring the bins as often as you want
and the system will allow you, in annual inventory the system places a
restriction in that you can only do the inventory once a year, if you try
to do it again say a month later the system will not allow it. We always
by default setup up continous for our clients even when the customer uses
Annual as it gives us more flexibility in case a special inventory needs
to be taken etc.
Notes:
We for one do not do physical inventories annually because we have shown that our cycle count (continuous inventory) process is accurate.
In WMS we do a complete continuous inventory in 6 month cycle or twice a year.
Not only are we much better off operationally with accurate inventory (99%+), but we also avoid the high cost (dollars and accuracy) of the annual physical.
