Permanent inventory: More precise, less expensive, less stressful
Probably you have just completed your annual inventory. Maybe you had to hire additional staff for it. Annoy loyal employees with overtime. Rent additional MDE devices. Or even shut down the warehouse for a few days? – There must be a better way: perma-inventory.
One limitation first: those who currently still manage their inventories with paper and pen or by using excel and get along well with it, don’t even need to continue reading. Because: the basis for implementing a perpetual inventory is a solid ERP system combined with warehouse management software.
Do you have this? Excellent! Then there are no technological obstacles to switching from annual to perpetual inventory.
This has many advantages:
Are you interested? Then let’s take a closer look at perma-inventory together. For example, which variants are there, and which are suitable for which storage compartment.
Permanent inventory – these options are available
When the commissioner removes goods from a storage compartment, his MDE device prompts him to count or confirm the number of pieces remaining in the compartment. For this purpose, a limit value has been defined in advance, above which the message is to be sent to the system. For the sake of simplicity, the value “zero” is usually selected. In other words, if the storage compartment is empty, the commissioner enters this information into his MDE device (Mobile Data Entry). This forwards it directly to the connected warehouse management or ERP system. If the compartment is not empty but should be, the corresponding remaining number of items is also entered into the MDE device. In this way, the ERP system is always up to date in terms of inventory.
Counting is carried out at low turnover times or when there is little activity in the warehouse. Past experience is used to determine these times, as well as forecasts. For example, peak periods such as Christmas or Black Friday naturally fall out for a count. In the inventory plan, time intervals can be defined in advance – for example, “weekly” or “monthly” and the number of storage compartments to be checked on that day. When the inventory plan is created, the counting order for the warehouse employee is automatically stored in the MDE device – but can also be canceled at any time.
The purely manual variant: If there is little activity at the moment, the employees spontaneously check the stock of goods in storage compartments previously defined by the warehouse management using the MDE device. The instruction for this is given by the warehouse management.
Variant one – the so-called zero-crossing inventory – is used in most cases because it is the most convenient variant. However, it requires a rather constant stock turnover overall articles, because otherwise, the order pickers do not pass all storage compartments on a regular basis.
Variants two and three are usually used for slow-moving items – and thus for storage compartments that are not regularly covered in the count during picking. All storage bins not counted during the year are then counted at the latest on the key date.
In practice, therefore, there are always more than one of these inventory types in use.
Requirements for permanent inventory
The basic requirement for implementing a permanent inventory is an ERP system such as Microsoft Dynamics 365 for Finance & Supply Chain Management and, in this case, the associated warehousing module. It controls all processes in the warehouse, which employees document with their MDE devices. Every process related to goods must be stored in the MDE devices. This communicates with the ERP system in real time via WLAN.
Convenient: storage locations that are not counted – and thus not recorded by the perma-inventory – are visible to the warehouse management at a single view: via inventory time stamps), the system marks the verification status of each storage compartment. And: lost articles are automatically booked out – keyword: inventory correction.
This last point is essential for the implementation of a permanent inventory. The auditor, in turn, will only give his okay for this if the inventory accounting is carried out flawlessly. This means that all inventory movements and goods receipts and issues must always be systematically recorded in terms of value and quantity. Changes in inventory and all related processes must be fully transparent for the auditor.
With the warehousing module of Microsoft Dynamics 365 for Finance & Supply Chain Management, this can be implemented without any problems.
The good news: We know how to do it!
We not only take care of the implementation of the required software modules, but we also bring your processes into the system and into user-friendly MDE devices. And before everything goes live, we test exactly whether everything works – on the screen and on-site in the warehouse. In this way, we prepare everything for the acceptance of the permanent inventory by the auditors.
Implementation takes about two to four months from the time the order is placed. Quite fast considering the benefits you get out of it.
Sounds interesting? Contact our experts for more information
|xalution signs Microsoft Partner Pledge »« We initiate the future: Interview with Adrian, Arthur & Gian-Luca|