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Ordeal or No Deal

Tips to help take the pain out of annual inventory audits

By Douglas Graham

Some distribution employees would sooner go to the dentist than do an inventory of warehouse stock, even at time-and-a-half pay. Owners and managers like inventory no better than their employees, as SKU auditing slams the brakes on business, putting everything on hold until the ordeal is history. But merchandise is no less a currency of wholesaling than currency itself, making the yearly, biannual, or quarterly inventory a crucial aspect of doing business, and one as inevitable as death and taxes.

When performed improperly, old-style inventory auditing can add insult to injury. It may even be hazardous to the health of an enterprise, as it can virtually choke a distributorship with paperwork.

"In the past, conducting an inventory audit at our company was a little bit like controlled chaos," said Mike Bell, executive vice president of operations at Duncan Indus trial Solutions, in reference to the paper-based sys tem that was previously used by the Oklahoma City-based MRO supplier prior to its 2006 deployment of a sophisticated ware house management system. "Our company really needed better controls on cycle counting, and inventory in general."

Duncan's paper chase often led to brick walls in the form of serial and SKU number tracking errors, pack and putaway mistakes, and other problems typically encountered as a result of human handling. Automation ironed out most of these wrinkles, and correspondingly smoothed out the company's scheduled inventory audits. But is system-wide automation an absolute prerequisite to pain free SKU accounting? Absolutely not, according to experts in the area.

Read Full Article on TED Magazine