Inventory and understanding process

WHAT IS THE INVENTORY UNDERSTANDING PROCESS AND WHY IS IT SO IMPORTANT?

You have surely experienced a situation where you were buying a car, a kitchen, or even something as mundane as a cell phone. The salesperson probably bombarded you with questions, such as what your budget is, what your lifestyle is like, what features you expect, etc. There is one simple reason for this—every salesperson wants to understand (or should want to understand) your needs and desires in order to offer you the most suitable product or service. This is the only way to get what you really want, within the limits of what is possible, and leave the store or your computer satisfied. And maybe you’ll return to that salesperson again someday… And this situation applies in exactly the same way to inventory services. If a company preparing an offer of its services is genuinely interested in the customer, then this understanding process awaits you.

What are the goals of understanding the process in inventory?

Basically, these should be questions that lead to an understanding of the following things:

• What are your needs and expectations regarding inventory?
• What specific characteristics do you (your company) have as a customer?
• What should the result of the inventory look like?
• How will you continue to work with the inventory output?

Only after answering these questions can an agency offering turnkey inventory services propose an optimal inventory process and prepare a price quote that will be beneficial to both parties. That is why this entire introductory process, the understanding process, is so important in inventory.

Questions within the understanding process of inventory

Whether it’s inventory of goods or inventory of assets, the questions are always the same.

1/ When should the turnkey inventory take place?

Inventories are typically planned well in advance. We like to say that an inventory can be carried out in two ways. Either quickly or well.

If we consider that the inventory process also requires going through the understanding process, preparing a price quote, agreeing on a schedule, preparing a contract, preparing and verifying data compatibility on both sides, scheduling inventory staff, and accidentally managing to “hit” a date that does not conflict with other pre-arranged inventories, it takes at least one month. On average, however, you need to count on 3 months from the initial contact to the completion of the inventory.

Tip for everyone who is planning to contact an external company regarding the implementation of their inventory: Don’t delay assigning the inventory and definitely don’t leave anything to the last minute.

2/ What are the operational options for conducting inventory?

Our standard is to accommodate the customer as much as possible and not restrict their operations. Typically, inventory counts in retail stores are carried out at night, inventory of newly opened development projects is performed before the start of full operations, and inventory for manufacturing companies is conducted during company-wide vacations or during the off-season.

3/ What is the subject of a turnkey inventory?

Most often, this involves inventory of goods in retail, inventory of assets, or inventory of current assets. It depends on the needs of the company.

When conducting an inventory of assets, it is particularly important to define the subject matter in as much detail as possible. This is due to the nature of the assets and legislation, which does not clearly define the lower limit of the acquisition price of small assets. Will it only be an inventory of office furniture? Will it also include IT equipment? Will the inventory also include means of transport? Will the inventory of intangible assets be part of the contract?

4/ Is the inventory item visibly marked with an identifier?

Traditional inventory of goods or turnkey inventory is carried out using inventory software. In our case, this is LISW software and hardware equipment on which this inventory software is installed. Typically, these are code readers.

In order to perform a turnkey inventory using inventory software and hardware, it is necessary for the inventory item to be marked with a unique identifier – this can be a barcode, QR code, asset card number, stock card number, or RFID code. Only then can the so-called data collection using a reader take place.

Inventory of assets is specific in terms of their designation with a unique identifier. If the assets are labeled, the data collection process is the same as for goods or materials. If this is not the case, then the inventory itself must be combined with the production and printing of asset labels, which are used to label the assets, and each subsequent inventory will then be faster, easier, and cheaper.

5/ In what format do you expect the output from the completed inventory?

In addition to the inventory protocol or inventory record, customers typically require data in electronic form. This data is used for import into the customer’s information system. The current trend is to “load” this data with a single click instead of laboriously rewriting each item individually. Therefore, in order to be able to prepare and program the inventory output in the form required by the customer, it is necessary to connect people on both sides (IT staff) who will jointly test the inventory output before it begins.

6/ What is the number of inventory items?

Please note that this is a key issue for preparing a price quote, defining a sufficient time window for conducting the inventory, and scheduling a sufficient number of workers. As a standard practice, we use historical data from similar inventories to determine the optimal number of workers and duration of the inventory, particularly data regarding hourly performance and worker productivity.

TIP: Have information ready regarding the quantity that will be subject to your inventory request. If you do not have exact data, prepare at least a rough estimate.

Other common questions about inventories in this process

• What is the method of storing goods?
• Is the merchandise stored at heights?
• How many functional forklifts are available for inventory?
• Who is the contact person for operational, legal, and IT matters?
• Are you interested in a one-time job or a long-term contract?
• What should you do if you find damaged property or goods?
• What units of measurement do you use internally?
• When is the deadline for the tender for the turnkey inventory?
• What size should the inventory label be when marking assets during inventory?
• What layout should the asset inventory label have?
• What should an asset inventory label contain?

The most common mistakes in the inventory understanding process

1/ Failure to provide truthful information or provision of inaccurate information

This is probably the most serious error, which can lead, at best, to complications during the inventory process and, in extreme cases, to the inventory not being completed within the agreed deadline. It is understandable that this is sensitive information and sometimes there is no willingness to provide this information to a third party.

2/ Ambiguous definition of tender conditions

You will receive several price quotes, each of which will be processed differently, making it impossible to compare and evaluate these price quotes for conducting an inventory. In other words, it will be impossible to determine which one is the most advantageous for you. Therefore, it is better to define everything in advance for companies according to the instructions above.

3/ Assumptions instead of facts

Never assume anything. Facts that may seem obvious to the inventory company are not necessarily obvious to their customers. This also applies in the opposite case, when the customer expects something but it is not clearly stated in relation to the inventory company. Define the basic terms before starting cooperation and test the data.

4/ Insufficient or incomplete definition of roles during inventory

This can lead to “arguments” about roles, competencies, and responsibilities, and overall delays during the inventory between the customer’s employees and the inventory service provider. This will only slow down the employees performing the inventory, and thus the inventory itself.

Does our approach make sense to you? Request an inventory from us.

If you are currently planning an inventory in your company and would like to outsource it to a professional company providing such services for any reason, the questions above will guide you on how to precisely submit a tender. However, if you are interested in how we carry out inventory of goods or assets at Leite, simply contact us via the non-binding inquiry form. And of course, we provide many more services!