The underlying problem behind the bulk of all inventory record errors is a lack of knowledge by warehouse workers in how to process a variety of inventory transactions. As a result, cycle-counting teams waste time investigating errors; the materials planning staff must order parts on short notice due to unexplained materials shortfalls; the company incurs express delivery charges to bring in parts on short notice; and the accounting staff must record unexplained losses related to inventory adjustments.
Many of these problems can be mitigated by creating a procedures manual for all inventory transactions and by continually training both the warehouse and accounting staffs in their use. Examples of common inventory transactions are as follows:
Consignment receipts and deliveries
Inventory storage in rack locations
Issuances of additional parts
Loaning inventory to departments
Receiving customer returns
Removing defective parts from the production process
Returning defective parts to suppliers
Returning stock to the warehouse from the shop floor
Shipping completed customer orders
Staging for shipping
Transferring between inventory locations
It is not enough to simply create a handsome procedures manual and issue it to the staff. On the contrary, all employees involved with these transactions should go through regular refresher training, while new employees ...