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CRACKING THE CODE: HOW TO READ AN INVENTORY REPORT

July 10, 20170WarehouseWMS

CRACKING-THE-CODE-HOW-TO-READ-AN-INVENTORY-REPORT.jpg

CRACKING THE CODE: HOW TO READ AN INVENTORY REPORT

July 10, 2017 0WarehouseWMS

Before we get started

There is one piece of information on every inventory report that matters more than any other. It is the source of a surprising number of discrepancies, wasted effort, and panic attacks.

Thankfully, it is also very simple.

The date of an inventory report is all too easy to miss. As we skim over header information in search of the “meat” of our workday – namely, on-hand counts – we can find ourselves looking at last week’s report by accident. Ulcers ensue when the numbers don’t match up with what we just saw with our own two eyes on the warehouse floor.

Every inventory report covers a range of dates, which can be set to whatever you wish. The range is most commonly set to “today only” if you’re a warehouse manager, though an office manager may want to drill down into last quarter’s tallies, or compare several year’s worth of trends.

The rest of the variables in an inventory report will vary somewhat, depending on your type of business and your products carried. For new hires, the abbreviations will have even more variation, even if your last job was nearly identical.

Below are the most common headings you’ll encounter.

Warehouse Metrics

The columns in an inventory report which a warehouse manager must see are the most fundamental. They involve hard data: quantities, SKUs, and product names. Typically, anything else is clutter. Warehouse Managers should have clean, easy-to-read copies of inventory reports for their own use, with the following information:

  • SKU – a short series of numbers and letters set by the manufacturer. SKUs often have proprietary logic, which enables a manufacturer to encode a lot of product information into one identifier, such as size, color, product group, and so on
  • Product name – Almost always set by the manufacturer
  • Description – Usually set by the manufacturer, though this field may also be used for warehouse notes
  • Quantity on hand – the expected quantity of product in your warehouse. This number gets updated automatically through your WMS as you receive and stock new product, and as you pull product for outbound shipments. It can also be updated by hand as errors are resolved

While the above list covers the most fundamental information, these are also common:

  • Location – The product’s physical location on a shelf or in a warehouse
  • Unit – A brief description of what constitutes one SKU; a single unit, a pack of 6, a volume of material, or a target weight, etc
  • Time on hand – how long each batch of the items have been in stock
  • Value on hand – the dollar value of the total amount of product on-hand
  • Expiration date – for perishable goods

Manufacturers might also see:

  • List of materials suppliers
  • List of distributors
  • Some materials may require country of origin, creation date, MSDS advisories, etc

Additional entries for Distributors are similar:

  • List of manufacturers
  • Batch or lot numbers
  • List of vendors
Office Metrics

Office personnel need to see the above information, after all errors have been reconciled. In addition, their tasks necessitate expanded inventory reports which show the following fields:

  • Item cost
  • Item price
  • Sales totals
  • Returns
    • Products
    • Quantities
    • Source of the returns
  • Summary of all transactions, inbound and outbound
Audits

Printing up a fresh copy of the most recent inventory report is an easy place for your warehouse manager to perform an audit. With SKUs, product names, and quantities laid out neatly in a hard copy of a spreadsheet, it allows a warehouse manager to methodically take notes as they walk the floor.

“Audits” aren’t only what IRS agents carry in their holsters. In fact, they aren’t all that scary when you’re the one performing your own audit. In business, audits are the grease in your wheels, keeping everything running smoothly.

But if you just can’t get over the distaste for that word, there’s a better, more precise option; the Cycle Count. We’ve prepared a brief, simple primer on Cycle Counts to get you started, or to polish up your existing process.

Our Cycle Count white paper is going to be out soon. To be updated on the Cycle Count white paper fill in your email below.


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