It is always important to maintain the accuracy of inventory to run an organization properly. As matter of fact, the purchasing of materials and supplies by the procurement department actually depends upon the accuracy of the inventory. Similarly, it is also important to have an accurate inventory to plan and schedule productions efficiently.
Accurate Inventory Management:
A good inventory managements system can help companies to formulate policies and procedures to monitor their inventory and following lines explain how.
- Proper Material Handling Process:
The company should formulate proper procedures for handling of material within and outside the company. These procedures should explain how employees are supposed to bring parts into the company and transactions of parts within department and in and out of the stock such as during production. These inventory management procedures should also detail how employees will handle defective parts and scrape material.
- Train Employees:
Another important aspect of inventory management is the training to of the staff about inventory procedures. Each employee should understand how accurate inventory is important for the company. Similarly, separate training sessions should be conducted for the production department and the receiving or stocking department.
- Implement Audit:
No matter how good your inventory management system is, you simply cannot maintain the accurate inventory if you do not conduct periodic audits. These audits can verify if the workers are following the inventory procedures in addition with checking whether inventory is according to the records or not.
- A Cycle Counting Procedure:
A continuous counting process is another important aspect of good inventory management. It is basically based on how valuable a certain item is and what is his frequency of use. It is up to the company to determine which item will undergo counting after how many months. For instance, a critical path that is most frequently used will can undergo counting twice a month but a normal item may be subjected to counting cycle after 3 months.
- Plan Annual Physical Inventories:
Companies can also adjust quantities to clean the system by planning bimonthly, quarterly or annual physical checks. The discrepancies discovered during these checks will also determine how effective the procedures and counting cycles of the company are.