The freezing/thawing mechanism is designed to ensure you get accurate inventory counts without having to shut down operations during periods when you are performing physical inventory.
The freezing/thawing mechanism is designed to ensure you get accurate inventory counts without having to shut down operations during periods when you are performing physical inventory. All you have to do is follow these simple steps:
- Prior to beginning an inventory count, freeze your quantity-on-hand (QOH), as described in the Count Tags document.
- Once you finish the count and post your numbers, thaw your QOH.
You should finish counting an item site before you let users remove inventory from the item site. Once you finish counting and post the result, then users can start taking inventory from the item site again.
- The QOH indicated on screen after thawing 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.
Counting Inventory without Freeze/Thaw
In our first scenario, we show an inventory count where inventory is not frozen prior to the count. The numbers you see in the Scenario A figure below 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 QOH 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 QOH.
- However, as you can see from the far left-hand column in the diagram, the indicated QOH does not equal the actual QOH. Why? Because the inventory count did not consider ongoing warehouse activity. The numbers are off—and this is a problem.
- Issues like this can be prevented by closing the warehouse when physical counts are being performed.
Scenario A: Inventory Count without Freezing Inventory
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 Scenario B diagram correspond to the following chronological narrative:
- Noticing a discrepancy between actual QOH and indicated QOH, the inventory manager orders an inventory count.
- When creating the count tag, he selects the "Freeze Inventory" option.
- Since the inventory is frozen, the indicated QOH will not change until inventory is thawed at the end of the process. As you can see, the indicated QOH 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, selecting 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 QOH of 17. The equation would look something like this: 14 + 5 - 2 = 17.
- As a result of the thawing process, the indicated QOH equals the actual QOH. The numbers are correct. There is no problem.
Scenario B: Freezing Inventory Before Beginning Inventory Count