Inventory Control Toolkit

Goods Receipt

Goods Receipt Note (GRN) Template

Record every stock receipt against a Purchase Order

Field	Description	Example
GRN Number	Unique sequential number	GRN-2026-0001
Date of Receipt	Date goods physically arrived	12/06/2026
PO Reference	Purchase Order number this receipt is against	PO-2026-0045
Vendor / Supplier	Name of the supplier delivering the goods	ABC Supplies Ltd
Delivery Note No.	Supplier's delivery note reference	DN-78934
Received By	Name of warehouse staff who received	John Smith
Location / Warehouse	Which warehouse / storage location	Main Store / Bin A-04
Item Details (repeat per line)
Item Code	Internal item/material code	MAT-001
Item Description	Full item description	Blue Pen Box (12 pcs)
Unit of Measure	EA, KG, L, BOX, etc.	BOX
PO Quantity	Quantity ordered on the PO	100
Received Quantity	Actual quantity received today	98
Variance	PO Qty minus Received Qty	2 (short delivery)
Condition	Good / Damaged / Rejected	Good
Batch / Expiry Date	For perishable or batch-tracked items	Batch: B2026-06 / Exp: 12/2027
Sign-Off
Warehouse Supervisor	Signature confirming receipt is accurate	Name + Date
System Posted?	Confirmed that system stock was updated	Yes / No

Key Rule: GRN must be raised on the same day as physical receipt. Delayed GRNs cause stock discrepancies and incorrect financial accruals.

Cycle Count

Cycle Count Sheet

Count stock in rotation — without stopping operations

Cycle counting means counting a portion of your stock regularly rather than shutting down for a full count. Use this sheet for each counting session.

Field	Description
Count Date	Date of the physical count
Count Reference	Unique reference (e.g., CC-2026-06-W2)
Location / Zone	Warehouse area being counted
Counter Name	Person performing the count
Supervisor	Supervisor overseeing the count
Count Results (one row per item)
Item Code	Internal code
Item Description	Full description
Bin Location	Exact bin where item was found
System Quantity	What the system says should be there
Physical Count 1	First blind count (counter does not see system qty)
Physical Count 2	Second count if Count 1 differs from system
Variance	System Qty minus Physical Count
Variance %	(Variance / System Qty) × 100
Root Cause (if variance)	Reason for discrepancy: data entry error / theft / damage / wrong location
Adjustment Required?	Yes / No — if Yes, requires supervisor approval
Recommended Frequency
Class A Items (high value)	Count monthly
Class B Items (medium value)	Count every 2 months
Class C Items (low value)	Count quarterly

Golden Rule: Counters must not see system quantities before counting. This prevents biased counts. Use blind counting and only compare after recording physical quantities.

ABC Analysis

ABC Inventory Classification

Prioritise stock control effort based on value and impact

ABC Analysis classifies your inventory so you focus the most control on the items that matter most. Based on the Pareto principle: roughly 20% of items account for 80% of value.

A

High Value / High Priority
~20% of items
~70-80% of total stock value

Monthly count, tight controls, supplier agreements, safety stock defined

B

Medium Value / Medium Priority
~30% of items
~15-20% of total stock value

Bi-monthly count, standard controls, periodic review

C

Low Value / Low Priority
~50% of items
~5-10% of total stock value

Quarterly count, bulk ordering, less frequent review

How to Classify Your Inventory

Step	Action	Example
1	List all items with annual usage quantity	Item X: 500 units/year
2	Multiply usage by unit cost = Annual Value	500 × $20 = $10,000
3	Sort all items by Annual Value (highest first)	Ranked list top to bottom
4	Calculate cumulative % of total value	Item 1 = 15%, Item 1+2 = 28%, etc.
5	Assign A to top 70-80% cumulative value	Usually top 10-20% of items
6	Assign B to next 15-20% cumulative value	Next 30% of items
7	Assign C to remaining items	Bottom 50% of items by value

Practical Tip: Review ABC classifications every 6 months. Seasonal items may shift between categories. Never let an A-item run out — always maintain a safety stock buffer.

Reorder Planning

Reorder Point & Safety Stock Calculator

Never run out of stock — calculate when and how much to order

Term	Formula	Description
Average Daily Usage	Total Usage ÷ Number of Days	How many units you use per day on average
Lead Time	Days from order to delivery	Time your supplier takes to deliver after you place an order
Safety Stock	(Max Daily Usage − Avg Daily Usage) × Lead Time	Buffer stock to cover demand spikes or late deliveries
Reorder Point (ROP)	(Avg Daily Usage × Lead Time) + Safety Stock	Stock level at which you place a new order
Economic Order Quantity (EOQ)	√(2 × Annual Demand × Order Cost ÷ Holding Cost per Unit)	Optimal quantity to order to minimise total cost
Maximum Stock Level	ROP + EOQ	Upper limit — prevents over-stocking
Minimum Stock Level	ROP − (Avg Daily Usage × Avg Lead Time)	Lower limit — triggers urgent reorder

Example Calculation

Input	Value
Average daily usage	50 units/day
Maximum daily usage	70 units/day
Supplier lead time	7 days
Calculation	Result
Safety Stock	(70 − 50) × 7 = 140 units
Reorder Point	(50 × 7) + 140 = 490 units
Interpretation	Place a new order when stock drops to 490 units

Action: Calculate ROP for all Class A and B items. Review monthly. Adjust when supplier lead times change or demand patterns shift seasonally.

Target: Stock Accuracy

≥ 98% — industry standard for well-managed warehouses

Target: Stockout Rate

≤ 2% — prevents lost sales and production stoppages

Target: SLOB %

≤ 5% — excess beyond this ties up working capital unnecessarily

Target: Fill Rate

≥ 95% — customer experience and revenue protection