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Businesses that sell or manufacture materials for repair need parts inventory management. This involves creating bins, cycle counts, using technology to track parts, and implementing internal controls to prevent employee misuse.
Parts inventory management is a requirement for businesses that sell or manufacture materials that individuals or businesses use to repair other items. Computer repair shops, auto repair shops or locations, manufacturing equipment shops, and many other businesses need parts inventory management. The best recommendations for this process are to create bins and locations for all parts, separate parts by type, implement cycle counts, use company technology to track parts, and institute internal controls.
Most businesses need large spaces to store and manage parts inventory. Also, small parts should be kept in bins or other types of storage to ensure they don’t fall between storage racks or get lost. Installing tall racks that allow for the use of bins is essential in parts inventory management. Companies also need a system that uses numbers or letters to precisely position and then locate individual parts. Using this setting also allows companies to separate parts inventory by type. For example, an automotive parts store may place all water pumps in certain sections of the shelves. This allows for quick identification of parts and can make it easier for workers to remember where individual parts go when replenishing inventory.
Cycle counts are another important part of parts inventory management. Most businesses must periodically count their inventory for federal tax purposes. While some businesses may use an annual inventory count, others may want cycle counts. Cycle counting requires employees to review a specific section of the company’s inventory storage bins and count all parts based on computer readings. This allows the company to manage parts inventory and ensure it has accurate numbers when ordering new inventory. This counting process typically allows a company to count its inventory several times a year, meeting annual inventory count requirements.
The enterprise technology is a boon for companies that need to overhaul their parts inventory management. Businesses can institute an electronic barcode on inventory which allows businesses to track inventory electronically. Using handheld scanners, the company can assign employees to scan inventory for periodic inventory counts or whenever employees sell or move items. Computer programs make it easier to keep records and other party management tasks away from company party locations.
Internal controls help prevent employee misuse of inventory. Enabling an employee to order inventory, requesting management authorization for inventory orders and movements, securely locking high-value inventory, and ongoing inventory reconciliations are standard internal control procedures. Companies can also institute internal controls by hiring only reputable employees. This involves conducting background checks on employees and promoting individuals with a record of acceptable behavior.
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