Accounting Best Practices, Fifth Edition

Implementation Issues for Inventory Best Practices

This section describes the levels of implementation difficulty for each of the best practices detailed in this chapter. Each one is noted in Exhibit 16.1, alongside a listing of the relative level of implementation cost and duration. Most of these best practices are not simple ones to install because they involve one or more other departments, usually warehousing, purchasing, and engineering. Whenever another manager is brought into the implementation process, the chances of success drop rapidly, since this additional person must be convinced of the efficacy of the change.

Exhibit 16.1. Summary of Inventory Best Practices

	Best Practice	Cost	Install Time
Bill of Material Accuracy
16–1	Audit bills of material
16–2	Conduct a configuration audit
16–3	Modify the bills of material based on actual scrap levels
16–4	Review inventory returned to the ...