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Companies that sell or produce materials for repairs need to manage parts inventory. Tips include creating positions and locations for all parts, separating parts by type, implementing cycle counts, using technology to track parts, and instituting internal controls. High racks and electronic barcodes can help, and internal controls can prevent employee misuse.
Parts inventory management is a requirement for companies that sell or produce materials that individuals or companies use to repair other items. Computer repair shops, auto shops or repair shops, production equipment stores, and many other businesses need to manage parts inventory. The best tips for this process are to create positions and locations for all parts, separate parts by type, implement cycle counts, use business technology to track parts, and institute internal controls.
Most companies need large spaces to store and manage parts inventory. Also, small parts should be kept in boxes or other storage to ensure they don’t fall between storage racks or get lost. Installing high racks that allow for the use of boxes is essential in parts inventory management. Companies also need a system that uses numbers or letters to precisely position and subsequently locate individual parts. Using this setup also allows companies to separate parts inventory by type. For example, an auto parts store might place all of its 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 restocking inventory.
Cycle counting is another important part of parts inventory management. Most businesses must count their inventory periodically for federal tax purposes. While some companies 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 according to computer readings. This allows the company to manage parts inventory and ensure it has accurate numbers when ordering new stock. This counting process typically allows a business to count its inventory several times a year, satisfying annual inventory counting requirements.
Trading technology is a boon for companies that need to overhaul their parts inventory management. Companies can institute an electronic barcode on inventory that allows companies to track inventory electronically. Using hand scanners, the company can instruct employees to check inventory for a regular count or whenever employees sell or move items. Computer programs facilitate record keeping and other parts management activities away from company parts locations.
Internal controls help prevent employee misuse of inventory. Allowing an employee to order inventory, requiring management authorization for orders and inventory 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 background checks on employees and only promoting individuals with a record of acceptable behavior.
Asset Smart.
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