How to control & reduce inventory costs

There are several strategies a company can take when attempting to control and reduce inventory costs.  At JIT Solutions Group, we highly recommend implementing a 2-Part Cycle Count Program.  By implementing this program, companies will have a more efficient process of counting their inventory as well as a process for auditing items with high usage rate, all without the need for a Year-End Inventory and the disruptions that go along with it.

Part one is the normal cycle count process of counting small portions of stock during the year.  This method of counting is popular among large scale organizations that have a large quantity of items and cannot be closed for a long period of time to perform an annual physical inventory count.  However, part two accelerates the normal cycle count process to reveal issues that cost companies thousands if not tens of thousands of dollars each month. 

Part Two has companies audit a percentage of items that are handled during the course of the day.  These items are consumed internally, sold directly to customers, transferred to other facilities as well as other transaction types.  These items generally have a high usage level and by auditing the counts of these items, discrepancies can be identified and

resolved immediately. Some of the issues that an accelerated process reveals include Issues such as Internal Theft, Shortages from Suppliers, Product Damage and Transaction Errors.  By identifying these issues shortly after they occur, companies can take action steps such as establishing new process and training procedures designed to prevent future occurrences.

 

So by setting up a Cycle Count Program, companies will see the following benefits:

*Quick & Easy to implement

*Less complex than conducting an annual physical inventory

*Minimizes the disruption to daily operations

*Improves operational efficiency

*Faster error detection

 

********************

As an Inventory & Operations Consultant, with more than 20 years of experience, my mission is to help companies find the “LOST” cash in their warehouse.  I accomplish this by developing customized solutions that will make businesses more organized, productive and therefore more profitable.

For more information on my services, please visit my website, www.jitsolutionsgroup.com or visit my LinkedIn profile: www.linkedin.com/in/inventoryjoe/.