Inventory for breakfast with Stat Control

Half a day is enough". Just a few years ago, René Seidt would have been classified as a fantasist for this assessment of the inventory effort. No wonder, because the warehouse manager at Würth Industrie Service GmbH & Co KG in Bad Mergentheim is responsible for 280,000 storage locations. There are two high-bay warehouses, a shuttle warehouse and six manual warehouses on the approximately 122-hectare site.

Inventory in four hours

Since 2014, the annual stocktake here has actually only taken four hours, with this work being carried out by just three employees - on a normal working day during ongoing operations. "We can't afford to stop taking stock here," confirms Seidt, who has already practiced several types of stocktaking. Between 1999 and 2003, full counts were carried out in Bad Mergentheim on two to four weekends with up to 200 employees.

"We can't afford to stop bookings here." René Seidt, Warehouse Manager Würth Industrie Service

This extremely time-consuming and labor-intensive method was replaced in 2004 by a permanent inventory, which had become possible after the SAP conversion at that time. With this variant, defined in § 241 (2) HGB, a physical inventory must be carried out at least once a year, in which the target and actual stock levels are compared. However, by 2009 at the latest, the number of stock items had increased to such an extent that this requirement could no longer be guaranteed.

Certificate is required

"At the time, we didn't want to go back to full counting under any circumstances and found that inventory sampling was a much better solution," recalls Eva Borkenhagen, deputy head of the finance department. Inventory sampling has been recognized as a partial inventory since the 1970s in accordance with Section 241 (1) HGB. This means that a physical inventory is not necessary if the type, quantity and value of the inventory can be determined using mathematical-statistical methods. The IT department at Würth Industrie Service initially developed its own software for this purpose. From the total quantity of items, the program determined a daily sample of around 25 stock items using an extrapolation method, which was counted by an employee during the shift with the help of paper lists. "The time required for this type of stocktaking was three to four hours per day, which was a significant improvement on the previous full count," reports Eva Borkenhagen.

At the insistence of the auditors from Ernst & Young, the self-developed inventory sampling software was replaced in 2014. "Our solution lacked the certificate from an auditing company, which would have been difficult to obtain," explains Christian Heckmann. At Würth Industrie Service, the business IT specialist is involved in the development of the company's own warehouse management system KMS (Kanban Management System), among other things.

Easily accessible

"In our search for a certified inventory sampling system, we compared four providers, of which Stat Control GmbH quickly emerged as the favorite," says Eva Borkenhagen. The Hamburg-based software and consulting company impressed us with several aspects: "Right from the start, we had a dedicated contact person who we could reach on our cell phone at any time if we had any questions," says Heckmann. Another advantage was the high level of technical expertise, as the company, which was founded in 1991, concentrates exclusively on statistical procedures for stocktaking and inventory control. Against this background, Stat Control was able to offer solutions for all methods of inventory sampling, including extrapolation methods and sequential testing.

Paper lists are a thing of the past, now the warehouse at Würth no longer stands still, even during stocktaking. Photo: Stat Control

The sequential test is suitable for storage areas with high stock reliability and belongs to the "premier class" of permissible inventory methods: With this method, 30 random samples are ideally enough to inventory an entire warehouse. "We definitely wanted to check whether the sequential test was suitable for us," emphasizes warehouse manager Seidt, who had the "Staseq" software installed. The very first test showed that the stock quality was high enough.

Result within the tolerance range

The process is divided into four steps: First, the current stock level is transferred from KMS to Staseq. Now the quantity of items is selected, whereby Würth Industrie Service has always opted for the legally prescribed minimum value of 30 - however, higher values are recommended depending on the stock quality. Staseq calculates the count list on this basis. The items to be counted are then blocked for further postings in KMS. This revealed another advantage of Stat Control, whose solutions can also be used during ongoing operations.

The actual counting process can now begin. If there are discrepancies between the target and actual quantity for one of the 30 items, Staseq calculates another count list with additional stock items. If the stocks match during this recount, the result is within the tolerance range and the inventory can be completed.

Further acceleration

Conclusion: With the sequential test from Stat Control, Würth Industrie Service has reduced the inventory sampling time from 700 hours to just four hours. This corresponds to a saving of more than 99 percent. But that's not all: next time Eva Borkenhagen wants to save even more time and increase the original count quantity to 32 items. Because then the inventory would remain within the legal tolerance range even if there is a difference in the count and the recount can be omitted.

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