Avoid Embarrassment with Accurate Stock Balances
By Ann Cowgill in Blog on Monday, February 20th, 2012
As a distributor, you know the challenges, headaches, and embarrassment that can come from not having inventory in stock that has been promised to customers, replenishing stock too early or too late, and buyers and salespeople not being able to trust your data and reporting – all symptoms of inaccurate stock balances.
According to Jon Schriebfeder, president of Effective Inventory Management, Inc., there are four key ways to make sure your stock balances are accurate and stay that way:
Record ALL Movement of your Material
Many times, when a material transaction is not properly recorded, it is because an individual found a reason to go around the system. However miniscule, any material-related transaction needs to be properly documented in order to ensure that your stock balances stay accurate. Schriebfeder recommends working with all of your people to develop a manual or guide that describes step-by-step how each inventory-related transaction must be documented. Once the manual is in place, make sure it is enforced!
Assign the Right People to the Right Task
Many distributors underestimate the importance of the individuals handling receiving and stocking. Because receivers must be able to identify products, differentiate between similar looking products, and ensure that the amount and quality of the products received are suitable, that task should only be given to experienced personnel who have an intricate knowledge of your inventory. The same goes for the individuals who stock your warehouse. It is also imperative that your warehouse managers are capable of delegating responsibility and ensuring that the tasks that they delegate are completed to your exact specifications. Filling these three positions with top-quality talent will help to ensure that your policies are upheld and your stock balances are accurate.
Consider a Bar Coding Solution
Implementing a bar coding solution can help you verify that the correct items are being picked and put away, instantly update your distribution management software solution, and eliminate manual errors from the need to “key” in information.
Ditch Your Annual Physical Inventory and Cycle Count Regularly
Conducting an annual physical inventory is not remotely as efficient or effective as counting a few products each day of the year. While you can select the items you are going to cycle-count randomly or based on their geographic location in your warehouse, the most effective way to maintain accurate stock balances is to rank your products based on which are sold most often and count them the most often. This means that slow-moving and dead-stock items would still only be counted once a year. While implementing a regular cycle-count can be challenging, it is well worth the effort to know exactly how much of your most profitable products your have on hand every day of the year.
