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10 Tips for Perfect Inventory Accuracy

10 Tips for Perfect Inventory Accuracy

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Published by keertheswaran

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Published by: keertheswaran on Oct 18, 2009


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Even though we have made enormous advances intechnology and business processes, many organizations andmanufacturers still cannot perform basic warehouseoperations without going into reactive mode. This is mainlydue to a lack of proper or basic inventory record maintenanceand accuracy.Some organizations don’t measure inventory in an accuratemanner, or they don’t even have such measurements in place.Organizations need to understand that there are multiplebenefits associated with having proper inventory managementprocesses in place—to provide not only excellent customerservice, but also to help determine future purchases and whatneeds to be prioritized in the manufacturing plant; reduceoperating costs; and provide accurate data for financialrecords.Inventory accuracy is one of the major performance factors inany warehouse or distribution center. To have the appropriateamount of inventory (i.e. not carrying too much at a time) is amajor success factor for an organization.
Inventory can only be maintained effectively with the rightprocesses and with proper material handling procedures inplace. Most inventory control problems arise from poorinventory control measures and lack of proper processes toreport transactions happening in real time within thewarehouse. If an inventory issue crops up, the warehouse actsin a reactive manner rather than trying to fix the underlyingissue. The best way is to have a process in place that nipsthese issues in the bud before problems occur. Mostwarehouse management system (WMS) solution providershave specific functionality for managing inventory as well asmaintaining accuracy across the warehouse or distributioncenter. The objective of the warehouse is to have the minimumamount of inventory on the shelves to fulfill customer demandquickly and efficiently.Warehouses that are proficient in handling inventory and canaccurately maintain inventory records outperform theircompetition through better order and demand management,less labor effort, on-time delivery, maximized space andequipment usage, and a reduced overall carbon footprint. Toachieve these goals, its important that warehouse ordistribution centers implement processes to handle inventoryand bring inventory accuracy above 99 percent.To achieve this objective, here are few suggestions fororganizations that either have a warehouse managementsystem or that are planning to get one.
1. Inventory organization.Make sure your warehouse isorganized in an efficient manner so you can identify andreceive material inbound to the warehouse, as well as moveinventory on customer orders (sales orders) without losingtrack of what got moved out of the warehouse. This meansthat the supplier shipping the product to the warehouse mustlabel it correctly and place the information on the packaging ina manner which is easily identifiable by the warehouseassociates so they can receive the inventory correctly. Thedetails on the packaging have to be synchronized with thesystems within the warehouse or distribution center. Each itemin the warehouse needs to be identified and marked withdetails about the type of package, as well as any special needs(i.e., expiration dates, hazardous material, packagingrequirements, etc.)2. Process setup for use of inventory.Define all theprocesses within the warehouse for efficient inventorymovement and accurate data recording. Start with asequential location method within the warehouse that will helpthe associate to quickly receive the product. Locationsequencing is fundamental for efficient put away and pickingof the material. Within the warehouse you need to make surezones, fixed locations, and random locations are all setup andthese processes are documented clearly in the proceduresoutline. This helps ensure warehouse personnel use them fortheir own benefit as well as making sure it maintains theoverall inventory management process.

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