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Numerical Insights publishes articles on a variety of topics including business analytics, data analysis, data visualizations tools, improving business results, supply chain analytics, HR Analytics, strategic workforce planning, and improving profitability. We aim to make our articles informative and educational.

 

Ten Actions to Get Your Inventory Back on Track: Downloadable Checklist

Inventory Clean-Up Checklist

Ten actions to get your inventory back on track

10 Ways to Get Your Inventory Back on Track (Video version)

Ensuring the accuracy of your inventory data is crucial for smooth operations. Here's a quick checklist to get your inventory back on track.

1. Inventory Count

Conduct a physical count against recorded inventory levels to identify discrepancies. 

2. ABC Analysis

Classify items based on their importance and value to prioritize accuracy checks for high-value items and prioritize production orders.

3. Documentation

Keep meticulous records of all inventory transactions, including receipts, sales, returns, and adjustments.

4. Stock Rotation

Ensure FIFO (First In, First Out) or FEFO (First Expired, First Out) methods are followed to prevent obsolete/aging stock.

5.  Supplier Communication

Confirm lead times with suppliers to ensure your inventory calculations are based on accurate information. Inaccurate lead times can have a huge impact on your stock levels and the frequency of going out-of-stock.  

6.  Barcode/RFID Scanning

Implement scanning systems to minimize human error in data entry and retrieval. Ensure your product labels scan accurately. Many retail customers impose fines on products that won’t scan.

7. Training Staff

Educate your team about the importance of accurate inventory data, how inaccurate data can cause large financial problems and how their actions can help the company avoid large issues.

8. Identify Shrinkage

Look into reasons for shrinkage (theft, damage, errors) and see whether the value of shrinkage is trending over time. Is it getting better or worse?

9. Item Status

Identify obsolete or orphaned SKUs in your item list. Determine a plan to sell, donate or scrap the obsolete and orphaned inventory. These SKUs are taking up valuable storage space but yielding no revenue. 

10. Performance Metrics

Track key performance indicators (KPIs) such as inventory turns, inventory age and inventory cost as a % of sales. Are these metrics getting better or worse?

Tracey Smith