Physical inventory
Physical inventory is the verified count of on-hand stock compared with inventory system records.
Physical inventory is the verified count or measurement of on-hand materials, parts, work in process, finished goods, or supplies at a specific time and location. In manufacturing, it is commonly used to compare what is physically present with what ERP, MES, warehouse, or inventory records show.
A physical inventory may be a full wall-to-wall count, a count of selected areas or items, or a controlled count event tied to inventory accuracy checks. The count is often recorded at the item, location, lot, serial, revision, unit of measure, and inventory status level when those attributes are part of the inventory record.
Physical inventory should not be confused with book inventory, which is the system-recorded quantity before verification. It is also different from routine transaction processing, such as receipts, issues, moves, and completions, although those transactions affect the records being checked. Cycle counting is a related method that verifies inventory in smaller recurring counts rather than through a single broad count event.
In quality-sensitive operations, physical inventory data supports reconciliation, traceability, material availability checks, and investigation of variances. Any adjustments depend on local controls, transaction timing, and the systems used to manage inventory records.
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