Setting a cut-off time when the plant keeps running

If stock stops moving for the duration of a count, the cut-off is simple: the book at the close of the previous day is compared with what stands on the shelf. In a plant that keeps running, goods continue to arrive and leave while people count. Without a fixed cut-off, a moment in time to which both the book and the count refer, every difference becomes an argument about whether an item was issued before or after the counter walked past.

What a cut-off is

A cut-off is a date and an hour, for example the end of the shift on Friday at 18:00. The book is frozen at that moment: all documents up to the cut-off are included and later ones are left out. The counted quantity is also expressed as of that moment, even for zones that are counted later.

Fix the document basis first

1. Choose a moment when activity naturally drops: the end of a shift, a break or the gap between shifts.
2. Write down the number of the last receipt, issue, transfer and production report of each type before the cut-off, and have the shift supervisors sign. Documents with higher numbers belong after the cut-off.
3. Require all documents up to the cut-off to be entered in the system within a set time, for example by noon on the next working day, and keep a list of those that arrive late.
4. Export the book balance as of the cut-off and keep the file with its time of export.
5. Gather any paper receipts and issue slips that are not yet in the system, and number them before the count, so that it is easy to tell which side of the cut-off each one falls on.

Counting while movements continue

Two methods are usually combined:

• Freeze by zone: ask for receipts and issues in one zone to stop only while that zone is counted. This suits a small zone that can be counted quickly, and it is released as soon as the count ends. Held-back movements are recorded separately.
• Movement log: for a zone that cannot be frozen, record every receipt and issue between the cut-off and the count, with the time. Then stock at the cut-off = counted quantity + issued since the cut-off - received since the cut-off. Each entry in the log carries the time, item, quantity, direction, document number and the name of the person who wrote it.

For illustration, the cut-off is 18:00 and the counter finishes zone B at 22:00, finding 1,180 pieces of an item. The log shows 60 issued and 20 received between 18:00 and 22:00. Stock at the cut-off is 1,180 + 60 - 20 = 1,220. If the book at the cut-off says 1,230, the difference is -10. Without the log the difference would have looked like -50.

Goods waiting to ship and parts on the line

Goods waiting in the loading area are a frequent source of disputes. Choose one rule and apply it everywhere. For example, goods whose delivery note was signed before the cut-off count as issued and leave the stock. Waiting goods without a signed note are still stock, so they are counted in a marked area and flagged "waiting to ship". Parts on a production line are counted at the stage they had reached at the cut-off. Decide in advance, too, whether material that was issued to the line but not yet used counts as stock or as work in progress.

Who confirms

The warehouse supervisor and the production supervisor each sign the cut-off sheet, and finance receives a copy. During the count, someone other than the counters keeps the movement log. When a movement outside the normal rules is needed, it is approved by a supervisor and written in the log. The cut-off sheet and the movement log are kept after the count as evidence.

Summary

Counting while the plant runs needs three things: one reference moment, a record of document numbers and a movement log. Smart Inventory divides the warehouse into zones and records movements after the cut-off separately, so that operations stop for as short a time as possible.