Inventory Record Accuracy (#56)

In this podcast episode, we discuss the actions you need to take in order to achieve a high level of inventory record accuracy. Key points made are:

  • Inventory tracking software must track inventory by bin location, and update the inventory records immediately when changes are made.

  • The rack layout needs room for forklifts, a slow-moving inventory area in the back, and a small parts area.

  • The rack location code should begin with a letter for the aisle location, then a number for the specific rack in the aisle, and then a letter for the level designation within each rack.

  • Rack numbers should offset each other on each side of the aisle, so that pickers can pick from both sides as they walk down an aisle.

  • Both the bar code and alphanumeric rack location code should be printed on each rack label.

  • Lock down the warehouse with a fence and gate to eliminate intrusions.

  • Consolidate the same parts in one place.

  • Assign part numbers to everything in the warehouse.

  • Verify that the unit of measure assigned to each part is correct.

  • Pack the parts in containers, seal the containers, and label them with the contents.

  • Conduct an initial count and load the results into the inventory database.

  • Conduct cycle counting; train the warehouse staff to do it and investigate any variances found.

  • Audit inventory record accuracy every week, post the results by employee, and pay bonuses for the best results.

  • Review the warehouse manager based on record accuracy performance.

  • Expect to take at least six months to reach 98% inventory record accuracy.

Related Courses

Accounting for Inventory
How to Audit Inventory
Inventory Management