IntroductionIntroduction

Please introduce yourself and what brings you here this evening????

Joe CrewsFounder/President, JIT Solutions Group

Even in the best run operations, there are daily challenges managing the Inventory stored in your Warehouse or Tool Crib. When these ordinary challenges become “PAINFUL”, they must be addressed ASAP! As an Inventory & Warehouse Operations Consultant ♦ Coach ♦ Specialist, my focus is educating and training you and your team on how to increase profits and overcome these daily challenges.

Fundamentals of Inventory Management

Joe Crews

Founder/President, JIT Solutions Group

www.jitsolutionsgroup.com

336.624.6847

What is Inventory?What is Inventory?

• The goods and materials that a business holds for the purpose of resale or repair.

• What else best describes Inventory?

What is Inventory?What is Inventory?

• Inventory = CASH!!!!!!!

• WHO’S CASH????

TopicsTopics

• Shipping/Receiving Departments• Warehouse Slotting • Warehouse Security• Part Number Creation• Yearly Physical Inventory vs. Cycle Counting• Policies and Procedures• Stock vs. Non Stock Items (Spot Buys)• Warehouse Management Systems (WMS)

Shipping/Receiving DepartmentsShipping/Receiving Departments

• Inventory Management and therefore Accuracy begins at the backdoor (your receiving area). If product arrives incorrectly and received as such, it will be WRONG all throughout. At some point the error, whatever that may be, could be found but by the time it is, it’s generally way to late to fix it.

• Inspect each package 100% Confirm your PO matches the supplier’s packing slip If an error is found, contact supervisor and/or contact supplier

Types of “errors”- Part Number, Color, Damage, Qty

• This same process can also be applied to your shipping department. You must inspect shipments before loading and delivering to your customer. How bad does it look for a customer to receive the wrong product? Also, what Cost's are involved when the wrong product(s) are shipped?

Warehouse SlottingWarehouse Slotting

• After the product has been received correctly, these items must be stored. All items must have their own “home” within your warehouse/storeroom.

• These bins, shelves, cabinets and even floor locations must be clearly marked. Think of it this way, if I were to visit your facility and you asked me to find something, how long would it take me? Another important part of your warehouse is how it’s organized.

• The old saying, “work smart not hard” definitely applies here. Group similar items, by supplier, by equipment, by usage

Warehouse SecurityWarehouse Security

• Limit access to your warehouse to those who are directly responsible for managing it. An OPEN warehouse is prone to

“issues”. Theft, Damage, Parts disorganization • 10 Reasons for Inventory Errors

Part Number CreationPart Number Creation• Unless you are forced to do so by something out of your control, never

start an item number with a zero.

• Avoid using letters that can be confused with numbers. The main culprits are O, I, and Z

• Do not use a manufacturer's serial number or part number for your part number. These numbers are often too long and cryptic. Plus, if you switch suppliers, or the manufacturer changes their number, it becomes meaningless to your organization. 

• Do not use characters that might confuse people or software. For example, using a comma in your item number might make it look like a quantity or price. Using a "/" can result in Excel formatting your part number as a date.

• Keep your item numbers simple and alphanumeric where possible.

• CONSISTENCY

Yearly Physical Inventory vs. Yearly Physical Inventory vs. Cycle CountingCycle Counting

• Yearly PI’s are very time consuming, often requires a business to shut down entirely or just certain departments. PI’s are also not going to help you identity and resolve inventory issues. It’s difficult if not impossible to accurately fix an error that occurred in January when you conduct the PI at the end of the year. After a PI is completed, most inventories remain accurate for 30 days.

• CC programs are easy to start. Will help you identify issues such as-theft, receiving errors, employee errors, mixed product issues. Once you find these errors they can be address and fixed immediately. Cycle counting programs can often count an entire facility multiple times a year, rather than just once under a PI process.

• You will see your accuracy level rise by counting items that are issues out each day.

Policies & ProceduresPolicies & Procedures

• It’s very important to have your Warehouse and Inventory Policies documented. This will have everyone literally on the same page. You can’t have all members of your team “doing their own thing”

Stock vs. Non Stock Items (Spot Buys)Stock vs. Non Stock Items (Spot Buys)

• Stock items are tracked in your WMS, Non-Stock (Spot Buy) items and generally NOT place in your WMS. However, a simple database can be created to track these purchases.

• If you would be interested in a template to review, I can send you a

template by email.

Warehouse Management Systems (WMS)Warehouse Management Systems (WMS)

• There are literally TONS of options available to you. From Pen/Paper, Excel, Access, Free, Low Cost options, internal systems in your company, industry specific.

• If you’re looking for a WMS there are questions you must answer before you begin looking.

• **What do you want this system to do for you? Simply store your items electronically

Provide usage history Generate PO’s

Inventory SystemsInventory Systems

• InFlow-Free• Brightpearl-Beginning @ $299.00• Winward- Industry Specific Software• Fishbowl- Compatible with Quickbooks• Quickbooks Enterprise-True Inventory Management

options with Barcoding abilities

Line Card of Services

Site Audit Warehouse/Storeroom LayoutStaff EvaluationProduction Floor processPurchasing & Inventory DepartmentSafety Measures & Preventative measuresOperational Procedures review

Business Process Analysis/Improvements (BPA/I)Shipping & Receiving Order Picking/PackingPolicy & Procedure review/creationStock Replenishment Supplier RelationsPurchasing & Expediting

Inventory Accuracy & Optimization StrategyEstablishing ABC Classification Codes for inventory Developing a Cycle Counting scheduleDisposition of Excess & Obsolete InventorySKU count and dollar value of inventoryInventory AccuracyForecasting methodsProduct sourcing decisionsCritical Spares inventory

Storeroom Layout and Set UpSpace Optimization with proper storage options

Inventory Management SystemVerification of current system optimization Sourcing new systems

Many other Services can be furnished upon request.Joe Crews (336)624-6847 joecrews@jitsolutionsgroup.com www.jitsolutionsgroup.com