3.2.2.� Topic: Freezing and Thawing

3.2.2.1. Counting Inventory without Freeze/Thaw
3.2.2.2. Freezing Inventory Before Counting

The freezing/thawing mechanism is designed to ensure you get accurate Inventory counts without having to shut down operations. All you have to do is follow these simple steps:

Prior to beginning an Inventory count, freeze your Quantity on Hand.
Once you finish the count and post your numbers, thaw your Quantity on Hand.
The Quantity on Hand indicated on screen will be accurate because it reflects not only the numbers from your count but also any Inventory activity that may have occurred during the time your count was underway.

To give you a better feel for how freezing and thawing works, consider the following hypothetical scenarios. These scenarios approach the issue of Inventory accuracy from a number of different perspectives.

3.2.2.1.� Counting Inventory without Freeze/Thaw

In our first scenario, we show an Inventory count where Quantity on Hand is not frozen prior to the count. The numbers you see in the figure correspond to the following chronological narrative:

The plant's Inventory manager decides to count Inventory and issues a Count Tag. He does not select the "Freeze Inventory" option on the Count Tag screen.
The count begins and a quantity of 14 is counted. At this point the count is done, but for some reason the Count Tag is not posted right away. Perhaps the manager goes to lunch—or is called to perform another task.
Meanwhile, activity is occurring inside the Warehouse. We see that 5 units are received into Inventory and 2 units are issued.
This Warehouse activity is reflected on screen. The indicated Quantity on Hand rises or falls with each Inventory transaction.
After lunch, the Count Tag is now posted. The posted quantity reflects the quantity counted earlier—which was 14. This value will now display as the indicated Quantity on Hand.
However, as you can see from the far left-hand column in the diagram, the indicated Quantity on Hand does not equal the actual Quantity on Hand. Why? Because the Inventory count did not consider ongoing Warehouse activity. The numbers are off—and this is a problem.

Scenario A: Inventory Count without Freezing Inventory

3.2.2.2.�Freezing Inventory Before Counting

The second scenario is similar to the first—except for one important detail. In "Scenario B," the Inventory manager decides to freeze Inventory prior to beginning the Inventory count. Again, the numbers shown in the diagram correspond to the following chronological narrative:

Noticing a discrepancy between actual Quantity on Hand and indicated Quantity on Hand, the Inventory manager orders an Inventory count.
When creating the Count Tag, he selects the "Freeze Inventory" option.
Because the Inventory is frozen, the indicated Quantity on Hand will not change until Inventory is thawed at the end of the process. As you can see, the indicated Quantity on Hand is frozen at 10 until after the thaw.
The count begins and a quantity of 14 is counted. At this point the count is done and the manager goes to lunch—waiting to post the count until after he returns.
Meanwhile, activity is occurring inside the Warehouse. We see that 5 units are received into Inventory and 2 units are issued. This Warehouse activity is not reflected on screen because Inventory has been frozen.
After lunch, the manager posts the Count Tag. But notice that the indicated Quantity on Hand does not change to the Count Tag total of 14. Until Inventory is thawed, the indicated Quantity on Hand will remain at its frozen level.
When posting the Count Tag, the manager selects the "Thaw Frozen Inventory" option. As Inventory is thawing, the software performs a number of calculations. First, it retrieves the Count Tag total. Then it looks for any Warehouse transactions. Finally it returns an indicated Quantity on Hand of 17. The equation would look something like this: 14 + 5 - 2 = 17.
As a result of the thawing process, the indicated Quantity on Hand equals the actual Quantity on Hand. The numbers are correct. There is no problem.

Scenario B: Freezing Inventory Before Beginning Inventory Count