A comprehensive process of manually counting and verifying all inventory items stored in a warehouse to ensure accuracy between physical stock levels and system records. This systematic audit involves temporarily halting normal operations while staff count every SKU, compare quantities against WMS data, and document any discrepancies.
Physical inventory is critical for maintaining data integrity, regulatory compliance, and financial accuracy. Discrepancies between actual and recorded quantities can lead to stockouts, overstock situations, fulfillment errors, and inaccurate financial reporting. Most organizations conduct physical inventories annually or quarterly, though high-value items may require more frequent counts.
Modern WMS platforms streamline this process through mobile scanning devices, cycle counting programs, and automated variance reporting. For example, a distribution center might conduct its annual physical inventory over a weekend, using barcode scanners to verify 50,000 SKUs across multiple zones, identifying discrepancies that trigger immediate investigation and system adjustments.
