The business year will come to a close for many companies on December 31. An integral part of the closing process is the tedious and time-consuming annual physical inventory. Having endured just a few of these, I have the following suggestions to help make the process go a little smoother.
Send out notifications to all affected parties
Notify your suppliers that you will not allow deliveries while the physical inventory is in progress. Place a "non-delivery" notice on your purchase orders. Notify all transportation companies that regularly service your facility of the delivery and shipment restrictions. This will allow them to use their time more efficiently and they will appreciate your cooperation. Notify your auditors or accountants and arrange for count verifications by their staff.
Advise your sales people and customers of the shut down or non-shipment period. Publish a cutoff date for placement of orders to ship before the shut down.
Inform your employees well enough in advance to avoid a conflict with vacation schedules. This will also allow them to incorporate the tasks in their regular work schedules.
Print and distribute a schedule of all planned activities during the physical inventory. Make sure it lists who is responsible for each task.
Do some housekeeping
Clean up the storeroom area (sweep and remove all trash). Straighten up the inventory items for easy counting and make sure each item is contained within its assigned location. Avoid storing similar items in adjacent locations if possible. Make sure all items are clearly identified. Consolidate all quantities for the same item to reduce the number of locations wherever possible. Combine quantities into larger units for ease of counting (i.e. stacks or packs of 20). Make sure all storage locations are definitive and clearly marked.
Identify damaged goods and move them to a designated location or return them to the vendor for credit. Identify obsolete inventory and move it to a special storage location. Dispose of it as soon as possible to eliminate the cost of storing and monitoring it. Dust, spoilage, last year's inventory tags and / or cobwebs are telltale signs of obsolete or excess inventory. Have the counters note these observations on the count sheets for further review and action when the physical inventory is over.
Update the warehouse floor plans with accurate stocking locations. Determine what is not to be counted such as warehouse equipment, packing supplies and miscellaneous items not on the inventory records.
...ory holding costs, ordering costs, and shortage costs, and have a classification system for inventory items.
The company has a very good inventory control system. After they are able to locate good quality suppliers that are able to meet the demand of the company, they then strive to maintain those relationships. They have systems in place to forecast their future needs and then have set out to be able to maintain a supply on-site so they can meet the demands and not run out of the product. They also need to make sure that they are able to store the materials so that they are able to maintain the quality that the company needs.
One thing I did to assist them in tracking their inventory correctly was create an inventory
We will also be tracking down direct verification of inventory that is held by public warehouses or outside keepers. Auditors will think through Costco’s actions for assessing warehouse’s performance, internal auditor’s report on warehouse’s internal control, and reconcile Costco’s record of inventory to warehouse’s statement. We will also account for any crack in receiving and shipping records. Auditors will test for appropriate authorization for inventory purchase, obtain purchase journals linked to vendor’s accounts, receiving reports and purchase orders. We will also review right of entry to accounting system linked to inventory to decide relevance of system access, review relevance of inventory write-offs and track the moving of inventory from one warehouse to receiving of the other warehouse.
Lastly, the stores and warehouses are not communicating well which is resulting in confusion for both parties. Store managers waste time by having to spend store hours on the phone with the DC to expedite demanded stock. This time waste can be avoided by properly organizing the warehouse and having informed workers who can get the job done right and on time. Also worth mentioning is the current condition of the warehouse; there is inventory underneath conveyors and scattered across aisles, making it harder to track down stock.
The Target process should achieve the unloading of the delivery truck and the stocking of merchandise in the most efficient and effective way possible to ensure the limited number of stock outs and exceptional customer service. The critical process is the loading of the truck at the distribution center and the stocking items on the sales floor at the retail locations. The following process map is of the current
I hit home the point with your staff the need to enter and track all merchandise items in the POS system. At the same time, your key staff members
Inventory issues are not being addressed. What items should be held in stock, at what levels, for how long in advance, etc.
Provide them with the required time frame to complete the task in a timely manner.
... inventory turnover was found to be very low. The low inventory turnover ratio was an indicator of inadequacy, since inventory usually has a rate of return of zero (Inventory Turnover Ratio Interpretation, 2009). It also implied either poor sales or excess inventory. A low turnover rate indicated poor liquidity, convincible overstocking, and obsolescence, but it would have also reflected a planned inventory build-up in the case of material shortages or in anticipation of rapidly rising prices. (Inventory Turnover Ratio Interpretation, 2009) And a rapid and unexplained rise in the number of sales per day in receivables in addition to growing inventories to cover the shortage was noted. The interviewee (Public Accountant) could smell something suspicious which led him for more detailed procedures and proactive investigation at the end of which a fraud was detected.
provide clear instructions so everyone working for you knows what they are expected to do;
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It is undeniable that Inventory Management is an important key to success at Walmart this paper will discuss the two main methods of Inventory Management used by Wal-Mart: Material Requirements Planning and Just-in Time. Next we write about the technical means of keeping track of inventories like RFID tags. We conclude with discussing how
Inventory management can enhance the efficiency in operation of the supermarket. Supermarket must ensure that the correct levels of inventory are being maintained throughout the store, and that merchandise is purchased at the best price point as possible. Holding too much inventory on hand generate costs like carrying costs. Whereas having too little inventory on hand makes customers dissatisfied and it leads to declining
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