R. Craig Chambley
Purchasing Manager
ShuBee®
In any organization or business, maintaining inventory accuracy must be a primary commitment. The inventory, in most cases, is your largest monetary investment. Like quality, customer service and safety, accuracy must be promoted throughout the organization as everyone’s responsibility. This attitude and commitment must start at the upper levels of management. Business owners, managers and execs out there want an accurate inventory, but are they doing their part through everyday business practices to promote it?
Well planned Inventory Control Procedures are often a shortcut in the name of Customer Service, Quality, Inventory Management and Service Levels of Stock. These important key functions can actually reduce or eliminate the effectiveness of the plan, which in the long run will reduce your ability to serve your customers. Remember that these plans are designed to meet the needs of the customer, not compromise them.
While defining the processes and procedures for your inventory management, you should be looking at opportunities for errors and implementing changes to eliminate or reduce those errors. At Shubee, we redesigned the layout of our Georgia warehouse by creating a location system that placed the most active items nearest to the order packing stations. The change decreased travel time and increased productivity. The order-fillers find the products by location but fill them by matching the description on the picking tickets against the physical merchandise.
Even in the almost perfect world, the most accurate employee will make the occasional human error. To reduce or prevent re-occurring errors, I suggest placing formal checks in place for the function involved. Get as many people involved in this step to ensure you have a complete and accurate understanding of the processes. Anything missed in this step can be revised in your procedures and additional employee training later.
The documented procedures should be limited to inventory issues; they should be the complete procedure including quality, physical aspects and safety. It should be as clear and simple as possible and written for specific tasks within a specific job responsibility and should include everything the employee needs to know to complete the task and nothing else. In reality, procedures are not a “wish list;” they are the documentation of the requirements of a specific task. You must be prepared to enforce compliance of the procedures.
Once you have completed the documentation, a good team player effort should be to distribute the procedures to a few key employees, then take a couple of weeks for you and those employees to review the plan to see if anything was missed or if anything is incorrect. Once this is done, the procedures should be officially put into effect and distributed to all employees involved. Make them part of the solution and hold them accountable.
We would like to believe that once we have taken the above steps we should assume our inventory will be accurate. Not always. You will have to count it to determine the accuracy, as well as to determine areas needing additional improvements. Year-end physical inventory is a tool used by businesses and accountants and do very little for inventory accuracy. You should count, count, count your inventory on a continuous basis (cycle counting) to maintain high levels of accuracy. This is one of the best ways of identifying problem areas on a timely basis and providing continuous improvement. The way you count and the frequency of your counts should be designed for your specific type of operation.
The every day practices of confirming a “Good/Clean” receipt of goods, checked against the vendors packing list and physical merchandise at the time of receipt, not later, along with organized stocking practices and accurate order-filling will give you peace of mind that your inventory investment is under control. Please contact us at Shubee if we can provide you with further information or share some of our other successes with you.