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Inventory Management
Process Of Moving Physical Inventory Processes And Other Inventory Control Measures
Except for product located in the pick locations, client inventory is secured in a gated area with highly controlled and limited access. As part of the fulfillment process, the computer system generates an 'Over Stock' report prior to every packing slip run. This 'Over Stock' report is used to move the necessary product from the gated areas to the pick locations. Over stock pulled items are counted by two separate people before product is placed into the pick.
Returned Goods Processing, Refurbishing/Repackaging, and Disposition
Returns are inspected upon receipt and based on codes entered are returned to inventory as re-sellable, put in a staging area to refurbish, or disposed according to client direction.
Sub-Assembly Of Kits & De-Kitting
Once a group of products is pre-assembled into a finished, unique SKU (a package), it is stored and tracked in inventory as that complete package unit. If demand for the components of the package exceeds the component inventory, disassembly of the package is an option. A disassembly order is entered and the components are physically and systematically returned to inventory.
Communicating Inventory Variances
Our clients are offered a wide range of options for communicating inventory variances. Some clients prefer to only be notified of any large variances or adjustments in inventory. Others prefer to receive a daily file of any and all inventory adjustments made for each item. An e-mail notification is sent when no adjustments were made the previous day. As indicated, Client can have real-time, on-line access to inventory, including adjustment information.
Inventory Adjustments
Physical Cycle Counts are performed annually on items throughout the year on a planned rotation schedule. When possible, timing variances are controlled by putting a one day temporary "freeze" on the item's activity to perform the physical counts. When a freeze is not possible, open (printed/un-scanned and printed/scanned) orders and staged areas are carefully reviewed and compared. Regardless of whether the product is frozen or not, two physical counts are performed independently to confirm an accurate physical quantity on hand. If differences from the system exist, receiving paperwork and system entries are compared. Reports are run that show the product's historical movement through the warehouse, and each previous location of the product is physically checked to see if stock was inadvertently left at a location but moved in the system. And, returns history is examined for potential variances. Virtually all adjustments to stock can be explained and substantiated. Please see yearly shrinkage section for more information.
Reason codes are reflected in the item history to reflect the reason for adjustment whenever possible. Those codes include:
- Damaged Stock
- Receiving Error
- Error
- Mispick
The code of "Miscellaneous Adjustment" is only used when the specific reason isn't available as a code. Comments are entered to explain the Miscellaneous Adjustment. The code of "Physical Inventory or Cycle Count" is only used after all efforts have been exhausted.
RFID
FP uses radio-frequency, hand-held bar code scanners in our warehouse for picking, packing, and product movement. During the manufacturing process, this same technology is used to issue materials, track the master, and ensure order accuracy.
Reconciliation / Audit Process On Incoming To Outgoing Orders
After each file is loaded to our computer system, the number of records loaded is compared to the number of records in the original file, and the number is recorded on a daily log sheet.
Orders received are systematically checked for accuracy. Any orders not meeting the FP criteria are flagged and printed on an Error Hold report. This report is reviewed by the ASR after every order file receipt. The ASR corrects each order and releases the hold.
During each bulk pick ticket and packing slip printing process, an Open Orders Report is printed indicating the specific orders that were NOT printed and the reason (other than back-ordered product) for the delay. This report is reviewed by the ASR and the necessary actions are taken as a result of the information provided.
ASRs review an Items Below Minimum and a Backordered Items report regularly. Depending on the type of client activity these reports are reviewed a minimum of once per week and for some clients multiple times a day. Because the client's ASR becomes very knowledgeable about the client's product and the demand for each item, some clients give the ASR the authority to make the judgment call as to how much to duplicate. Other clients retain tight control over quantities to order. Some clients establish the minimum inventory level (point at which a decision is made to order or manufacture) and establish parameters by which the ASR orders. For instance, when the inventory is at the minimum quantity established, manufacture half the minimum without approval.
The shipping department reviews a report of printed orders that haven't been scanned and completes the necessary research and reconciliation every day.
Like the IBM report, the 'Unshipped Orders Report' is run and worked by the ASR as frequently as is needed and at minimum once per week. This report shows all orders that have printed, but are not shipped in the system. The ASR works with the fulfillment and shipping staff to ensure that the order did, or does, ship.
Shrinkage
FP calculates shrinkage by comparing finished good item receipts to cycle count and unexplained adjustments.
| Annual Shrinkage | ||
|---|---|---|
| 2004 | 0.28% (28/100 of a percent) | |
| 2005 | 0.33% (33/100 of a percent) | |
| 2006 | 0.06% (6/100 of a percent) | |
Standard Reports
A standard report package is featured below and includes:
- Report Name - Description
- Item Usage - Inventory usage per item for a specific billing period.
- Sales by Item - Unit and dollar sales per item for a specific billing period.
- Quantity On Hand - Per Item Inventory Balance.
- Activity by Order - Transaction detail for specific billing period.
- FP Charge Breakdown - Detailed order charges by FP.
- State and Sales Tax - Details taxes collected by state.
- Returns/Credits by Item - Returned items detail.
- Merchandise Return Labels Generated - Report that details FP charges for labels sent to consumers & freight on returned products.
- UPS Call Tags Processed - A pre-paid UPS label is delivered by a UPS Driver to pick-up a package at no charge to the customer.
- Mail Merchandise Returned - A pre-paid mail label is mailed to consumers to apply to the package and mail back to FP at no charge to the customer.
Report Customization
FP has virtually unlimited ability to customize unique reports. The development process can be as simple as providing a report layout, to as complex as discussing needs and use requirements in multiple conference calls. Turnaround time varies with the complexity of the customization.
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