Welcome back, we appreciate you checking in with us here at Warehouse and Operations as a Career, I\u2019m Marty, sharing a few thoughts and opinions as well as my own experiences about Warehousing and Operations each week. If you\u2019ve checked out a couple of our shows you\u2019ve probably picked up on the idea that I really enjoy the Industry, I love discussing its opportunities, its many tasks & turning those jobs into Careers. It was brought to my attention that I\u2019ve mentioned the department or task of Inventory Control several times recently so I thought we\u2019d talk a little about it today!
\nMany people assume that Inventory Control is purely an AP/AR position or a task of the Finance department. While true the Dollars, or the products worth & Cost is in their wheel house, these days, at least in the large Production or Distribution environments we in the warehouse play a very significant role, through item counts to identify Shorts or Not On Truck and miss-shipped issues to Cycle Counts, Re-Packs and verifying warehouse and driver damages and operational shrink.
\nMany years ago, well not that long ago I guess, Inventory was kept on file cards, when product came in it would be recorded on a card, maybe in a flip card binder, with the date it came in or was Received, then as product was sold it would be recorded with the date of sale, the quantity, maybe even the invoice number would be recorded. Kind of a running record if you will, product and quantity received, quantity sold and of course any damages or shrink would be deducted and noted as well. We\u2019ve come a long way since those days, this is one of those departments, one like most thankfully, that has benefited from technology, computers and systems.
\nThere\u2019s so many things that can affect our Inventories. Receiving errors, there rare these days due to how we receive and verify merchandise through SUPC and Items codes that can be verified using systems and scan equipment though. Then of course we have warehouse shrink, shrink includes things like damages that occur through the unloading process, hauling or forklift functions, the Selection Process, loading and delivery even.
\nAnother component of shrink is sometimes Spoilage, product that may go out of date due to miss-rotation through slotting or not rotating the item with FIFO or First In First Out processes. In my opinion, the op\u2019s prospective I guess, there\u2019s 2 types of Spoilage accounting, the warehouse side that we just spoke of and then a procurement or merchandising side such as over buying, and sometimes it can land in a Sales bucket or account due to it not moving quick enough or the sales forecast has changed or was incorrect. More about spoilage later, let me get back to our warehouse side or duties as it relates to Inventory Control I guess.
\nToday\u2019s distribution centers, and production facilities as well will probably be utilizing some kind of Inventory system. There\u2019s hundreds of them available, many of our larger companies have their own propriety systems, of course these are quick and very efficient as there built to our exact needs without any additional steps, punches or processes to get the information needed for our individual houses or opco\u2019s.
\nMost of today\u2019s systems can eliminate the need for closing the facility for a day through utilizing an accounting practice known as Cycle Counts. Not being an accountant myself I won\u2019t venture into the rules & regulations governing accounting at all but we can discuss what Cycle counting means to us on the floor or as warehouse men and women.
\nI use to hate Inventory days, we literally closed the facility for the day, usually over the weekend and literally counted every box in the warehouse, by item and by pallet lol. Salesmen, merchandisers, actually everyone would come in, we\u2019d each be assigned aisles and would take off counting every case, we\u2019d bring the count sheets to a control table where the item woul...