We would recommend a location – based inventory management system which takes individual operator/storeman’s memory out of the equation forever, and then becomes systematic.
All 3PL operations that we are aware of have a location based operating system as the foundation of their process based warehouse management, which includes the flow of goods into and out of the warehouse with accuracy and accountability to a very, very high standard.
With regard to inventory management, there is always a procedure agreed between contracting parties before business commences ( in the case of a 3PL scenario) on inventory checks , their frequency , the extent of the count, the method of reporting, the timing / frequency of the count, and the basis ( which parties’ numbers are the reference point) for the count.
With product accountability now an increasingly mandated requirement, the count becomes multifaceted- expiry dates, use by dates and batch control are all critical and current requirements. There is ongoing pressure to establish an exact match with system data, not just at stock take time, but also 24 hours a day 7 days a week in real time.
Cyclical counting is one method of achieving this goal.
Cyclical stocktakes provide for operators to take a different group of SKUs according to agreed and set criteria, such as dividing the SKUs into high, medium and slow movers, with high movers counted more frequently.
A programme of cycle counting is generally set out in advance and agreed with the client to check a set number of SKUS each day or week so that each SKU is counted as a minimum, once a quarter or 6 months.
Communication between the parties needs to be very good as these SKUs need to be frozen in all systems while the count and checks are confirmed.
The value lies in taking inventory counts in small bites with thorough rechecks (if required) and investigations carried out on any discrepancies and minimal delays with feedback.
Such has been the success with this type of process that, in some instances 6 monthly inventory counts have been eliminated and even annual stocktakes not required, because they have passed threshold tests set by 3PL client’s audit departments.
For more information on these methods contact us for a discussion.
