Use cycle counting operations to enhance inventory accuracy. Inventory management is the process companies use to order, receive, account for and manage the various products sold to consumers. “Many warehouse managers initially balk at the prospect of restructuring their floor plan. There’s no law that states every item your company offers has to be maintained in your warehouse, for instance. This gives your company better visibility into your inventory levels, which will help you accurately forecast demand and other reporting metrics.” – 4 Brilliant Tips for Optimizing Your Warehouse Inventory, ClearSpider; Twitter: @clearspider 26. Vendor-managed inventory, where a supplier has access to your inventory data and uses this information to ensure you always have adequate inventory, might be a viable option for certain items (such as your C items). Here are 5 inventory optimization best practices to consider that will lead to a more optimized supply chain: 1) Categorize Your Inventory. Initially, it may seem like a huge task to put your inventory solely on the shoulders of your Parts Manager, but we’ll show you some ways to help make this task easier later on in this report. Track inventory in real time. As soon as the counts are verified, enter them into your dealer management system, or spreadsheet. “To streamline your logistics and supply chain models as Kmart has done – which may ultimately free up working capital so you can invest in growing your business – you need an inventory management system that gives you complete visibility into stock levels, movement of product, and more. If you’re not sure, here are the facts about each: – Brad Vinson, 6 Inventory Management Best Practices, Wasp Barcode; Twitter: @WaspBarcode 9. Deploy end-to-end supply chain visibility. Make sure your team is aware of any changes in inventory management policies and practices, and train them on new technology or systems. From correctly balancing stock in warehouses to ensuring production can continue to flow, inventory management is essential for keeping businesses up and running and the bottom line healthy. You have to come up with a strategic plan of who is counting your inventory. “Forecasting can go a long way to lowering costs and ensuring the success of inventory management efforts. Three methods for conducting an inventory count: Bar-Code Readers: This is the most accurate method, however the most expensive given the fact that you need a bar code reader and your items/bins need to be labeled. Reduce repair cycle times. For this reason, it may be necessary to enact loss prevention techniques, such as, “utilizing security cameras to reduce customer and employee theft, using security tags, limiting access to inventory and carefully monitoring customer returns.” So while managing inventory isn’t many people’s idea of a rollicking good time, you and your team can stay on top of customer orders and fulfillment and minimize stressful episodes where your products can’t be found or prepared for shipment — by considering a few best practices.” – Lee Polevoi, Managing Inventory: 7 Great Tips for Your Small Business, Cintas; Twitter: @CintasCorp 7. The whole point of safety stock is to protect against expected variations in demand and supply. Importantly, if you outsource any part of your supply chain, you must ensure that your 3PL provides data about stock levels and movements in real-time.” – Inventory Management Tips for Growing Businesses, StarTrack; Twitter: @startrack 29. This lowers your risk of carrying dead stock if it is not used in time. As dreadful and time consuming as it sounds, it’s not as hard as you think – if you first implement a process that will enable you to easily perform the task. The number you assign is known as a Stock Keeping Unit, or SKU. INVENTORY CONTROL PROCEDURE Introduction, Roles and Responsibilities The effective maintenance and reporting of department fixed asset, maintenance material, equipment inventories and other agency’s assets require teamwork between offices and staff. This eliminates your employees from becoming too overwhelmed at the thought of having to count thousands of parts all at once. The best way to conduct your cycle-counting is by using what Schreibfeder refers to as “The Ranking Method.”. The end of the year is a great time to conduct a full physical inventory count. Audit your stock. If you use cards or sheets, Schreibfeder recommends you put together two-person counting teams. Inventory management is a broader term encompassing everything from forecasting demand and ordering products to stocking the shop’s shelves and counting physical stock in-store. This method will also help your inexperienced employee become more familiar with your merchandise. This, in turn, can affect your customer service. Every movement from arrival to slot-placement to picking to wrapping should generate a transaction. These new technologies are all designed to provide different levels of increased productivity and improved accuracy.” – 8 Tips to Improve Warehouse Efficiency, Vero Solutions; Twitter: @solutions_vero 25. Create a map of your stocking area. Schreibfeder also suggests that you consider counting surplus areas and slow-moving products before your scheduled count. Inventory control, on the other hand, refers specifically to managing stock in your warehouse. If you’re looking to ease the burden of conducting the demanding task of an annual inventory count, there’s an alternative and that’s cycle-counting. Use barcode scanning to eliminate manual data entry errors. Nor does it allow for a 30,000-foot view of your company’s inventory. It’s a method where you take counts of different areas of your inventory spread out over the course of the year. “It’s shocking but true: Some companies out there are still relying on manual inventory tracking and management systems – in other words, Excel spreadsheets. Combat this before it becomes a problem by coming up with a checklist of tasks that must be done before an order can be marked as fully processed and fulfilled. Would a continuous review or periodic review system be best? Improve forecasting. If you are working on batches rather than the multiple picking of varied products for a given order then this does reduce the error rate significantly.” – Stock Control and Inventory Management Tips, Cloud Fulfilment; Twitter: @CloudFulfilment 19. Additionally, make sure that items that get sold more often should be near the packing and shipping area. This can cause problems and you could end up out of stock on an item for an important customer.” – 3 Tips for Improving Your Warehouse Inventory Management System, Siggins; Twitter: @SigginsInfo   23. '” – Maida Napolitano, Top 8 Guidelines to Improve Inventory Management, Modern Materials Handling; Twitter: @modernmhmag 44. “Don’t treat all of the products in your inventory the same way. Businesses that use perishable goods will also want to use minimal stock as a control. Inventory Control Process Max / Min Inventory Control System •Set minimum and maximum inventory levels for items you want to keep in stock. Instead, there can be a lag in time which allows material and inventory levels to change significantly before the next update. An effective internal control structure for inventory includes a company’s plan of organization and all the procedures and actions it takes to:. This should include every shelf, bin, drawer, receiving dock, and return area. Update purchase orders in a timely manner. is in its proper bin or location and not floating around somewhere else. This is similar to the ABC analysis practice where management categorizes its inventory according to its value and speed of turnover. By setting aside time and assigning someone to re-stock the go-backs, you are staying on top of your inventory and improving the organization of the warehouse.” – End of Year Warehouse Management Tips: Part 1, Scanco; Twitter: @ScancoLLC 14. “Business leaders sometimes ask, ‘What level of inventory should we never fall below?’ The answer is zero. ‘As a daily activity, you can stay on top of it because it’s only a little bit of work and completely manageable. By knowing what supplies are on hand at a given time, the manager will be able to plan food orders, calculate food costs since the previous inventory, and make menu item changes if needed. Standardized operating procedures are an action plan for policy implementation. Improve warehouse layout. “Even with good inventory management software, periodically you still need to actually count your inventory to make sure what you have in stock matches what you think you have. Ensure compliance with company policies and federal law. ‘In the best companies, slotting is a daily activity not a quarterly or annual activity,’ says Open Sky’s Sardeson. '” – Roberto Michel, Warehouse/DC Management: Six Best Practices for Better Inventory Management, Logistics Management; Twitter: @LogisticsMgmt 12. Factor in third-party logistics providers. Obviously, this should only apply to your proven top sellers to avoid unnecessary physical inventory re-allocation.” – Emilie Fritsch, Warehouse Inventory Management: 10 Tips You Need to Know, SkuVault; Twitter: @skuvault 10. You should also avoid planning around holidays when you know employees will be occupied. –        “C” rank items (responsible for the next 4% of sales) count twice per year. Schreibfeder recommends, however, that each counter also has a supply of blank cards to accurately record discovered or misplaced merchandise. Train all workers in inventory management best practices. The teams should consist of an experienced employee, paired with someone with less knowledge. In order to use real-time tracking, you need a cloud-based warehouse management system, mobile devices to input data, and an internet connection. Also, note that sales trends and patterns continuously change and are largely different in different areas, the organization of your warehouses have to reflect these location-specific demands for your products.” – Clara Lu, Gain Inventory Control with Multiple Warehouse Management Tactics, TradeGecko; Twitter: @tradegecko 46. Click on a category below to jump to a specific section: 1. In addition to avoiding errors, having a view of all your inventory can allow you to be better informed should a customer request the status of their delivery or reserved item.