1. Purpose of the document #

This document is intended to ensure that clients understand the inventory check process (cycle count), how it is performed, rights and responsibilities when participating in co-inspection (inventory check – cycle count) at the Boxme warehouse.
Clients need to read and sign this document before inventory to:

• Limit disputes to arise.
• Ensure transparency and consistency in the process of inventory check, processing and closing inventory check data.
• Understand the inventory difference risks during the inventory process (Wrong counting, wrong expiration date selected…)

2. Inventory check method #

Boxme uses two methods to create inventory check requests:

• By Product: check product by storage locations. A single product may be stored in multiple locations. This type of request is commonly used for random checks or rechecks when unusual discrepancies are detected.
• By Storage Location: check all products of a client that have been configured in the storage system. This type of request is typically used for periodic full inventory checks. Each client with stored goods has fixed storage locations configured in the system, and products cannot be stored in locations that do not belong to that client.

3. Process of Reception #

• Clients submit inventory check requests through the system or sales department at least 30 days in advance.
• Boxme confirms the audit schedule and provides early inventory data.

4. Inventory check process #

Step 1 : Stop creating orders down to WMS and process the entire awaiting outbound orders.

• The warehouse verifies inventory check request according to code (IR) and the system records pre-inventory data according to each SKU . This is called a pre-inventory statement before the inventory check.

Note that: The system only allow the inventory check process when the staff has confirmed and processed all awaiting outbound orders and inventory differences are alerted.

Step 2 : Create inventory check requirements according to location / product. Clients sign the confirmation minutes to read the inventory check process of Boxme before implementation.

• The inventory staff presents the client with the storage locations configured on the system to the client.
• An inventory check requirement ( IR ) consists of multiple inventory check orders ( CY ) by shelf group, storage area.
• An inventory check order ( CY ) consists of multiple locations and products to be divided by inventory teams at the same time.

Step 3 : Perform inventory check of each location under CY on the WMS application system. Inventory staff will not know the amount of inventory stored at each location, can only enter the actual inventory quantity, the actual shelf life on the product.

Step 4 : The system prepare actual stock and pre-stock location to detect differences in quantity or shelf life.

• The system requires second person to check the locations where the difference in quantity or expiry date is detected in order to confirm the results with greater accuracy avoiding cases of wrong counting or incorrect expiry date entry.

Step 5 : Summary of inventory results:

• The system automatically generates abnormal inventory adjustments according to each CY and aggregates inventory results according to IR.
• Abnormal inventory adjustments are to determine the difference on each CY. However the final difference result is confirmed by IR.

Step 6 : Check for large, suspicious discrepancies due to wrong counting or entering wrong quantities on the software.

• Based on the IR composite results, the two parties can create a re-inventory check request according to the location or product with a large difference. From there, explain the actual difference after inspection and confirm the results.

Step 7:Confirm the results.

  The staff in charge confirms the completion of the inventory check process and proceeds to confirm the inventory data after the inventory check.

• Inventory results include:
  • List of inspected locations and quantity, expiry date before and after inspection.
  • Report inventory differences after checking by each product.
  • Report on abnormal inventory adjustment during inventory check: Adjustment of quantity, expiry date.
  • Ending inventory report after inventory check includes by SKU, Expiry date, Batch/Lot.
• The two sides shall print the minutes of audit results from the system and make a record of explaining the abnormal differences.

5. Regulations in the process of inventory check #

• Clients only monitor the inventory check process by each team to determine:
  • The actual number of products counted at the location.
  • Quality of goods stored (Dirt status, damage if any).
  • Expiry date and product quantity are entered into the system by inventory staff.
• The client shall monitor the second inventory check if any discrepancies are detected at the first inspection in order to:
  • Verify that Boxme employees perform a second count, update product information.
• Clients request or together with Boxme check the products with large differences after having the inspection results of IR. This case occurs when there are irregularities in the inventory check results may be due to the wrong inspection process for the second time.
• Clients comply with the form of audit report, record and comment on the inventory check report on the storage status of Boxme to improve the quality of service.
• Clients submit comments on inventory check results and storage status of goods, inventory process.

Clients with a large number of SKUs that cannot be completed within the day shall mutually agree on an inventory checking process by area and confirm the quantity discrepancies after the inventory check. In this case, the ending inventory only reflects the data at the time after the inventory check, and does not indicate the variance compared to the beginning inventory, as outbound operations have been carried out during the inventory check process.