Welcome back to Warehouse and Operations as a Career, I\u2019m Marty and I appreciate you listening in today! Everyone know what FIFO is? It simply means first in first out when we\u2019re dealing with product. I heard about an employee losing his position because he pulled 30 cases from the newest pallet received, a pallet that had just been received that day. Now he knew that wasn\u2019t best practice, as a matter of fact he knew he was not supposed to do it. He was pulling an order for will call, the pick location was on the other end of the warehouse, that pallet was right there by him on the dock, so he stopped and picked them. It didn\u2019t take inventory control long to determine they had 47 cases about to go out of date, actually it only took them about 2 hours as that item was being cycle counted that day. He knew it was wrong, against the rules, but he made a bad decision. And to top it off, he was mad about getting terminated? At the end of the week it was determined that\u2019d been a about a $3000 error. I understand being upset about losing our job, but he\u2019d kind of terminated his self. It would have taken him a few more minutes to run over and pull the product from the pick slot, in rotation, but he was getting paid for his time and we\u2019re paid to follow direction, too right?
\nLet\u2019s talk about Inventory management for a minute.
\nhttps://en.wikipedia.org/wiki/Inventory The scope of inventory management concerns the balance between replenishment lead time, carrying costs of inventory, asset management, inventory forecasting, inventory valuation, inventory visibility, future inventory price forecasting, physical inventory, available physical space, quality management, replenishment, returns and defective goods, and demand forecasting. Balancing these competing requirements leads to optimal inventory levels, which is an ongoing process as the business needs shift and react to the wider environment.
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\nInventory management involves a retailer seeking to acquire and maintain a proper merchandise assortment while ordering, shipping, handling and related costs are kept in check. It also involves systems and processes that identify inventory requirements, set targets, provide replenishment techniques, report actual and projected inventory status and handle all functions related to the tracking and management of material. This would include the monitoring of material moved into and out of stockroom locations and the reconciling of the inventory balances. It also may include ABC analysis, lot tracking, cycle counting support, etc. Management of the inventories, with the primary objective of determining/controlling stock levels within the physical distribution system, functions to balance the need for product availability against the need for minimizing stock holding and handling costs.
\nAs receivers, order selectors, forklift drivers and warehouse men and ladies we probably don\u2019t think about our days on hand of inventory, our turns, meaning on average how many days it takes to ship all of the received quantity of an item or the cost of storing a quantity of left over or aging inventory.
\nWe\u2019ve spoken about the cost of real estate, or our pick locations before. I guess it was back in the late 90\u2019s when I heard about Just In Time receiving. Our merchandisers we\u2019re tasked with keeping as little inventory on hand as possible. Especially with products that local vendors had readily available at all times they\u2019d wait until almost every on-hand case was sold and shipped before they brought in another quantity or pallet. In theory you\u2019d bring in just 1 pallet, put it in the pick location, no reserve slots would be utilized, and you\u2019d reorder just in time, or when the slot would be empty. A great cost savings move. Our warehouses wouldn\u2019t need as much square footage, we wouldn\u2019t need tall stacked racks to accommodate all those reserve slots, shoot, we wouldn\u2019t need as much racking or pick slots al...