Physical Inventory Counting

 
A physical inventory is a periodic reconciliation of system on-hand balances with physical counts in inventory. We can perform physical inventories whenever we choose to verify the accuracy of our system on-hand quantities. We can perform a physical inventory for an entire organization or fpr specific sub-inventories within an organization. Physical inventories are usually performed once every six months are once a year depending on the organization requirement. Accurate system on–hand quantities are essential for managing supply and demand, maintaining high service levels, and planning production.

Physical inventory Steps:

1. Define a physical inventory for your whole warehouse or subdivisions within your warehouse.

2. Take a snapshot of system on–hand quantities. You must procedurally coordinate the snapshot of your physical inventory with your actual counting, and ensure that no transaction activity occurs in a particular location until after you have performed your adjustments.

3.1 Generate alphanumeric tags.

3.2 Count the TAGs. Void unused or lost tags.

3.3 Approve or reject physical inventory adjustments based on approval tolerances.

4. Automatically post adjustments to inventory balances and general ledger accounts.

5. Purge physical inventory information.
Defining Physical Inventories:

We can define and maintain an unlimited number of physical inventories in Oracle Inventory. A physical inventory is identified by a unique name we assign. We use this name to identify any activity, such as adjustments, pertaining to this physical inventory.

We can define multiple physical inventories to count selected portions of our inventory, or we can count your total inventory. For example, if our warehouse has two large stockrooms, each represented by a sub-inventory, we can define two physical inventories, one for each sub-inventory. We can then perform our physical inventory of the first stockroom, independent of the second.

Navigation: Physical Inventory ->Physical Inventories

1. Enter a unique physical inventory name.

2. Select approval requirements for adjustments.

Always: Require approval of all physical inventory adjustments.

If out of tolerance: Hold for approval those counts that are outside the limits of the positive and negative quantity variance or value tolerances.

Never: Allow any adjustment to post without approval.

3. Enter positive and negative approval tolerances If approval is required for adjustments out of tolerance you must enter a value in at least one of these fields. You cannot update these values after you perform physical inventory adjustments.

Qty: Enter acceptable Positive and Negative limits (expressed as a percentage) for the difference between the system–tracked on–hand quantity and the actual tag count quantity.

Value: Enter acceptable Positive and Negative limits for the total value of a physical inventory adjustment.

4. Select the scope of the physical inventory. Determines whether the physical inventory is for all sub-inventories or for one or more specific sub-inventory. Only enter a quantity tracked subinventory.

5. Indicate whether to allow dynamic entry of tags. Determines whether you can dynamically enter tags you manually created. If you choose not to allow dynamic tag entry all tags must generated before use if you do not want to allow dynamic tag entry but you need blank tags, you can generate numbered blank tags for counting miscellaneous items.
Taking a Snapshot of Inventory Quantities:
 
Before we can generate tags for a physical inventory, we must take a snapshot of all system on–hand quantities for our items. The snapshot saves all current item on–hand quantities and costs. Oracle Inventory uses this information as the basis for all physical inventory adjustments. All tag counts you enter for this physical inventory are compared with these static quantities. This allows you to resume normal inventory operations after we have entered our counts but before you have authorized all final physical inventory adjustments. We can perform our recounts or investigate certain results without holding up transaction processing.

Notes:

1. Oracle Inventory does not stop inventory processing during a physical inventory. Therefore, you must procedural coordinate the snapshot of your physical inventory with your actual counting, and ensure that no transaction activity occurs in a particular location until after you have performed your adjustments.

2. It is recommended to clear the Pending Transactions and Transactions Open Interface, before taking a snapshot of inventory.
To freeze the system on–hand quantities:

1. Navigate to the Physical Inventories window.

2. Select the physical inventory you want to use.

3. Click on Snapshot Button or Choose Perform snapshot from the Tools menu. This launches the snapshot concurrent process.

4. When the concurrent process is finished, re–query the physical inventory to see the effects of the snapshot. The effects include: The Snapshot Complete box is checked on the Physical Inventories Summary folder window.

The Snapshot Complete box is checked, the Snapshot Date is updated, and the Tags button is enabled in the Define Physical Inventory window
Generating Physical Inventory Tags:
 
We use physical inventory tags to record the physical counts of inventory items. Physical inventory tags represent actual hard copy tags that some companies use to count inventory items. A tag contains the count for a group of a given item. Although we can record only one item on a tag, multiple tags can reference the same item, with each tag referring to a unique physical location for an item.

Note: A tag represents a single item number in a particular sub-inventory, locator with a given revision, lot, and serial number. If we are not considering serial and lot number then the single TAG might have n number of items (in a particular sub-inventory, locator combination).

Navigation: Physical Inventory ->Tag Generation or directly click on Tags Button in Define Physical Inventory Window.

Once enter the starting number click on Generate button.

Oracle Inventory can generate default or blank tags for your physical inventory.

If you choose to generate default tags for each item, specify the starting tag number and the increment by which you want to increase each digit in the tag number. Your tag numbers may be alphanumeric, but you can increment only the numeric portion. The alphabetic characters in the tag number stay constant. Inventory then uses these tag numbers to generate a tag for every unique combination of item number, sub-inventory, locator, revision, lot, and serial number for which the system has an on–hand quantity not equal to zero.

If we want to have some empty tags handy to record counts for stock–keeping units for which Inventory has no on–hand quantity (and therefore does not generate default tags), you can generate blank tags. Inventory assigns tag numbers to blank tags, but does not include any item or location detail. You specify this information when you enter your tag counts. You can generate as many blank tags as you want. We can also exclusively use blank tags to perform a physical inventory. If you need to perform a complete wall–to–wall physical inventory, you can go through your warehouse and attach blank tags to every item and/or location you see. As you perform the count, you record the item and stock–keeping unit information along with the actual on–hand quantity.
Run a concurrent program Physical Inventory Tags to generate physical inventory tags with below parameter details.

Out put will be like below screen up to 130 tags

Run a concurrent program Physical Inventory Tag Listing to list the physical inventory tags with below parameter details. Out put will be like below screen up to 130 tags



Physical Inventory Counting Continuation...