Part 2 of a 2 part series
- Decreased inventory turnover.
- Increase in inventory days outstanding.
- Frequent inventory shortages.
- Sudden growth in inventory.
- Pilferage, theft or missing assets.
Steps to Improve: MINIMIZING INVENTORY LOSS
- Guard against losses from employee theft.
- Put in place safeguards to reduce theft.
- Minimize storage sites, control access; centralize ordering, and enforce.
- Use what’s on hand first, before substituting.
- Lock the supply closet.
- Learn from shortages, overstocked, obsolete, or slow moving items.
- Dispose slow moving and obsolete inventory.
- Double check scales for accuracy.
- Assure adequacy of insurance for inventory variance.
Steps to Improve: INVENTORY OBSERVATION
- Watch for slow moving, obsolete items.
- Watch for inventory security lapses.
- Watch for inventory disproportionate with sales of an item.