Inventory management plays a pivotal role in the success of every organization. The question often raised is, “What good is Inventory Management if the inventory is not 98-100% accurate daily, every day?” The answer is unambiguous: No good! This emphasizes the need for Cycle Counting, a vital process for every department in a company, including Purchasing, Finance, Supply Chain, Distribution, Warehousing, Accounting, and more.
The Repercussions of Inaccurate Inventory
Inaccuracy in inventory leads to significant issues such as loss of sales, poor customer experience, and potentially the more severe problem of retail theft. Inventory Records Accuracy (IRA) is often an overlooked area. However, implementing Daily Cycle Counting and Root Cause Analysis with the aim of 98-100% daily accuracy is an essential strategy that can mitigate these problems.
A common misconception among businesses is that inventory is approximately 90-95% accurate. Surprisingly, a sample cycle count often reveals the accuracy to be much lower.
The Necessity for Accurate Inventory
The coordination between the on-hand number in the computer and that in the Warehouse must be precise, particularly when shipping to customers. Anything less than perfect can lead to back orders, which are generally frowned upon.
Even with the advancement of technological tools such as ERP and other IT solutions, their efficacy is questionable if the inventory accuracy is not near 100%.
The Concept of Daily Cycle Counting
To put it in perspective, the Warehouse is analogous to a Bank, holding the company’s MONEY. It’s not just about pallets, parts, or boxes; it’s about protecting the company’s assets with discipline and teamwork to meet the daily accuracy goal of 98-100%.
Process and Methodology
The key objective is to ensure that the on-hand number in the warehouse equals the on-hand number in your ERP/WMS or Computer software 98-100% of the time. The cycle count process must be conducted without any other transactions occurring, to maintain integrity and avoid influencing the counts.
Cost Savings
Remarkably, achieving a few months of 98-100% accuracy daily allows for the elimination of labor-intensive physical inventory, which can cause even more errors.
A Word from the Experts
Dr. Dawkins Brown, the executive chairman of Dawgen Global, aptly encapsulates the essence of this approach: “In the world of business, accuracy is not merely a virtue; it is an imperative. The pursuit of near-perfect inventory management is a quest for excellence, efficiency, and most importantly, customer satisfaction.”
In a rapidly changing commercial landscape, inventory management is not merely about numbers. It’s about optimizing business processes, reducing costs, enhancing customer experience, and ultimately, safeguarding the company’s assets. The adoption of daily cycle counting, with an unwavering focus on 98-100% accuracy, is a proactive step towards achieving these goals. Whether it’s through utilizing sophisticated software or simple ‘in-out-balance’ sheets, the importance of accuracy in inventory management cannot be overemphasized. With a robust system in place, businesses can eliminate unnecessary work, save on costs, and maintain a competitive edge in the market.
How Dawgen Global Can Assist Your Organization with Inventory Management
Dawgen Global, under the proficient leadership of Dr. Dawkins Brown, is well-equipped to assist organizations with their inventory management needs. The team brings a wealth of experience, knowledge, and innovation to the table to help businesses streamline their inventory processes and achieve their accuracy goals.
Expert Consultation
Dawgen Global’s team provides expert consultation and thorough analysis of your organization’s existing inventory management system. By identifying key areas of concern, they can develop robust strategies to improve accuracy, efficiency, and operational performance.
Training and Support
Beyond just devising solutions, Dawgen Global provides essential training and support to help your team understand and implement proposed inventory management systems effectively. They recognize that the success of any solution depends on the people who use it, and are committed to ensuring your team has the necessary knowledge and skills to operate the system efficiently.
Technology Integration
The team at Dawgen Global stays ahead of the curve by leveraging state-of-the-art technology to enhance inventory management. Whether it’s helping to integrate and optimize ERP systems or implementing AI-driven inventory forecasting, Dawgen Global ensures your organization can harness the power of technology to improve inventory accuracy.
Long-Term Planning
Dawgen Global also assists in developing a strategic long-term plan to continually monitor, manage, and improve inventory accuracy. Their focus is not just on immediate improvement but ensuring the sustainability of accuracy levels over the long run.
Review and Follow-Up
Finally, Dawgen Global offers comprehensive reviews and follow-ups to assess the effectiveness of implemented solutions, providing modifications as necessary. By continuously monitoring progress and adjusting strategies based on evolving needs, Dawgen Global ensures that your organization can maintain high levels of inventory accuracy over time.
As Dr. Dawkins Brown says, “The pursuit of near-perfect inventory management is a quest for excellence, efficiency, and most importantly, customer satisfaction.” With Dawgen Global’s support, your organization can embark on this quest with confidence and the right tools in hand.
About Dawgen Global
Dawgen Global is an international professional services firm that specializes in providing comprehensive business solutions across various industries. With a focus on accounting, taxation, auditing, business advisory, and management consulting, Dawgen Global caters to clients of all sizes, from small businesses to large multinational corporations.
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Contact Dawgen Global Team at: [email protected] for a free 1-hour consultation to discuss your needs
