Inventory Management 101: Improve Data Collection & Asset Recovery
Inventory management likely ranks at the top of people’s lists of stressful activities—and near the bottom in terms of excitement. Regardless of your enthusiasm for finding, coding, logging, organizing and reconciling every piece of spare equipment including every item on every truck, inventory management is an incredibly important business function—one all asset owners owe it to themselves to get right.
In a nutshell, your assets are your livelihood, and if you do not know what you have or what the value of what you have is, you are losing money and hurting operational efficiency. Every company, big and small, needs successful inventory management. There are as many ways to do this as there are businesses, but the goals are essentially the same: collect data effectively on your inventory and use it to your best ability to save money, time and resources.
We have compiled a few tips that can help improve inventory management and make asset recovery less painful.
Use a scanner
Handheld data collection devices make cataloging equipment as easy as using a point and shoot camera. Many scanners can be programmed to alert differently when a most-needed asset is discovered, and all have the ability to download to the inventory software solution of your choice. Of course, before anything can be scanned, all items must be tagged and barcoded. Remember that while this may seem like a tedious task, it is a valuable one, allowing for a good look at each individual piece in inventory in the process.
Identify unknown assets
In the inventory process, one vital outcome is the chance to identify—and importantly value—every item. Again, knowing what is on hand and how much it is worth is valuable to your bottom line.
If possible, do a four-wall inventory
While doing a thorough inventory cold—that is, simply surveying and recording everything found—is great, having a list of items that are “supposed” to be available makes the processes even more valuable. In a four-wall inventory, assets are scanned and data is reconciled against a pre-existing list of supposed items. This gives companies the opportunity to 1) identify and re-tag assets that may not be tagged correctly, 2) potentially locate assets that are not where they are supposed to be, and 3) significantly clean up a company’s records via comparison of the list to the real-life tally.
Establish safety or min/max levels
Safety or min/max levels designate the optimum amount of a specific item in inventory as to not constitute too few to conduct normal business or too many to be useful. This “sweet spot” is where operational efficiency begins. If minimums are not met for critical items, finding out means a chance to stock up before a task cannot be completed because an item is missing. Conversely, items found in excess can be turned into assets—recovered for use elsewhere or disposed of or sold.
Get good software
Inventory management is yet another instance in which using an out-of-the-box spreadsheet solution is not the most efficient or effective choice. Instead, purchase robust software designed specifically for data collection, organization and integration.
Outsource the job
Inventory management can be handled in-house, but finding time and dedicated personnel to get the job done, as well as training them on the procedures needed to do it right takes time and pulls people from other critical tasks. Outsourcing to a reputable third-party vendor—preferably one that works hand-in-hand with a good inventory software solution—will ensure the task is completed in a timely manner and that all other business continues as normal.
Create an inventory schedule
Inventory time comes around, the job is completed, and everyone pats himself or herself on the back for getting through another cycle. But then the months wear on, and before you know it, it has been five years since the last inventory. In the meantime, critical items are moved, are misplaced, or run out and suddenly you are right back where you started. Inventory management is an activity that is more successful the more often you do it (within reason). With less time between inventories, fewer items find their way out of place, and less must be located, repaired, re-valued or replaced. Some states even regulate how often inventory must happen. Follow the guidelines, and if there are none, set a timer for your next inventory before life gets in the way.