Inventory data is the foundation of effective inventory management. It tells you what you have, where it is, and how much it costs. But if your inventory data is inaccurate, you risk losing sales, wasting resources, and damaging your reputation. How do you ensure your inventory data is accurate? Here are some best practices to follow.
One of the most important ways to ensure your inventory data is accurate is to audit your inventory regularly. This means comparing your physical inventory with your records and identifying any discrepancies. You can use different methods of auditing, such as cycle counting, spot checking, or full inventory counts, depending on your needs and resources. Auditing your inventory helps you detect and correct errors, prevent shrinkage, and improve your inventory turnover.
RFID can be very useful for this. Companies like Walmart, Dick's and others are moving towards having RFID tags on all or most of their products. Depending on the value of the item, it might make sense for a company to put RFID tags on their items and then they have the ability to scan quickly, without line of site and know pretty much exactly how much they have. It can greatly improve accuracy and reduced time spent on taking inventory.
Key points for maintaining accurate inventory data: - Regular physical counts - Automated tracking systems (barcodes, RFID) - Random audits - Regular data reconciliation - Consistent inventory management procedures - Staff training
Another way to ensure your inventory data is accurate is to use reliable software and hardware to track and manage your inventory. You need a software system that can integrate with your sales channels, accounting software, and barcode scanners. You also need hardware devices that can scan and print barcodes, labels, and RFID tags. Using reliable software and hardware helps you automate and streamline your inventory processes, reduce human errors, and increase your data visibility and security.
Using reliable inventory management software can significantly contribute to maintaining accurate inventory data. Such software can help with real-time tracking, data entry, automated updates, and reporting, reducing the chances of human errors and enhancing overall accuracy.
Simple glance:- 1) daily tracking of materials and monitoring of daily operations. 2) place and mark the incoming materials as per SKU type with the designated number or code and save it in inventory software. 3) dispatch of the FG materials as per batch number and according to FIFO and put the data to your software. 4) forecast order expectations and raw materia price projection from your vendor which will help for sufficient inventory of raw materials for future processes. (forcast of orders - planning - indent - purchase order - MRR - material requisition application to stores - production process or consumption - out come or FG with scraps - stock out of FG - disposal of scrap with valuation.)
A third way to ensure your inventory data is accurate is to train your staff and follow procedures for inventory management. You need to educate your staff on how to use your software and hardware, how to handle and store your inventory, and how to report and resolve any issues. You also need to establish and follow procedures for receiving, picking, packing, shipping, and returning your inventory. Training your staff and following procedures helps you maintain consistency, quality, and accountability in your inventory operations.
In addition to training of the procedures it's important to have a culture that cares about doing the procedures. In my experience, people know what they're supposed to do and most know how to do it properly, they just don't view it as a priority for them. It's not because they're jerks, it's because their focus is elsewhere. "I'll update that later, right now I need to....". This is usually based on good intentions which is why it's difficult to overcome. Do your best to make sure your procedures are quick and that your people know the value of taking that time.
Provide comprehensive training to staff on standardized inventory procedures to ensure consistent and accurate data management.
A fourth way to ensure your inventory data is accurate is to review your data and reports regularly. You need to monitor your key performance indicators, such as inventory accuracy, inventory turnover, fill rate, and stockout rate. You also need to generate and analyze reports, such as inventory valuation, inventory aging, and inventory movement. Reviewing your data and reports helps you evaluate your inventory performance, identify trends and patterns, and make informed decisions.
Conduct regular reviews and checks of inventory records to identify and rectify discrepancies, ensuring ongoing accuracy.
A fifth way to ensure your inventory data is accurate is to update your data and records frequently. You need to make sure that your data reflects the current status and value of your inventory. You also need to keep your records organized and accessible. Updating your data and records helps you avoid outdated or duplicated information, comply with regulations and standards, and optimize your inventory planning and forecasting.
A sixth way to ensure your inventory data is accurate is to seek feedback and improvement. You need to solicit feedback from your customers, suppliers, and staff on how to improve your inventory management. You also need to implement improvement actions, such as eliminating waste, enhancing quality, and increasing efficiency. Seeking feedback and improvement helps you identify and address any gaps or problems in your inventory management, and continuously improve your inventory data accuracy.
- Regularly seek feedback from staff and stakeholders to identify potential areas for improvement in inventory management processes and data accuracy.
When talking about inventory control, one do the biggest challenge is behavior. The culture created between your company can be determinant to your availability and indeed impacting your data when counting. When creating data modules it is necessary to re-educate everyone as well so, behavior can be minimize and getting more accurate results.
Simple glance:- 1) daily tracking of materials and monitoring of daily operations. 2) place and mark the incoming materials as per SKU type with the designated number or code and save it in inventory software. 3) dispatch of the FG materials as per batch number and according to FIFO and put the data to your software. 4) forecast order expectations and raw materia price projection from your vendor which will help for sufficient inventory of raw materials for future processes. (forcast of orders - planning - indent - purchase order - MRR - material requisition application to stores - production process or consumption - out come or FG with scraps - stock out of FG - disposal of scrap with valuation.)