How to choose the solution for automation of inventory?

Every company, no matter what it does, whether it is small or big, but it faces the necessity to do an inventory during its activity. This may be inventory of goods, raw materials, fixed assets – everything. Inventory business process requires effective automation – this theme is a subject of many articles and materials. This is obvious, therefore, in scope of this article we would like to draw your attention to the common and main mistakes, made by supervisors, while choosing the solution for automation of inventory.

 

Why do we think this topic is important and relevant?

The main reason is that, the author had the opportunity to learn and experience a wide range of solutions and try them on practice. And unfortunately, the most of the solutions offered by the market do not have even 10% of functionality, which is critically needed to organize the inventory process quickly, efficiently and with minimum cost.

 

Why is it so difficult to choose the appropriate solution?

Usually, inventory solution is developed by companies which produce the terminals for data gathering (the equipment that is most often used to automate the data gathering process during the inventory) or by companies which develop ERP systems (Enterprise Resource Planning) for which business process of inventory is not a priority.

As a result, in the first case, instead of complete inventory solution, we get the software which is focused on data gathering equipments and usually does not affect any other functionalities of the inventory process. Producer is not interested at all in what for and how you are going to use the data gathering equipment; the only thing important for him is to sell you that equipment.

In the second case, we deal with such a horrible functionality, which can not be used without pain. The developers of such solutions do not care about the process of inventory, what is really important for them is to reflect the inventory results during the accounting. They do not dig into the inventory details. They do not care about how to make the inventory process more efficient. They do not even consider the steps, related to inventory preparation, error detection and their fixing.

 

So, what is minimum functionality the inventory solution should be based on?

On the first step, we have to note, that any inventory should include several important steps:

● Inventory preparation

● Data gathering

● Data analyzing to detect any possible defects

● Review and data correction (bug fixes)

 

Each of these steps should be automated, otherwise the solution will not be completed and part of the work will have to be done manually or by using another solution. Even if one of the above steps is not covered by the inventory solution you are considering, it is better just to find another one.

Let’s not waste your time on detailed study of each of the stages; this idea is well-described in other articles related to this topic. It’s just worth mentioning that the most important stage which should be taken into consideration is the stage of data validation and correction. In most taken decisions it is just forgotten.

 

Here are the minimum functional requirements for solution to automate the inventory business process:

● Data collection functionality should be obligatory implemented with the reference to storage location. If this functionality is not available, then this kind of decision has no reason to be considered. Otherwise, it is just impossible to identify errors in the gathered data and correct them.

● Functionality of inventory control process for storage location. It is necessary to control that all the storage space has actually been inventoried.

● Analysis of the collected data in the first place is the inventory checklist. No matter which inventory method you use, you will need this kind of checklist.

● Functionality for adjustments into the inventory checklist. It’s just vital. Finding an error is not enough; and there will be enough of them. It is important that this error is fixed properly because in inventory, as a rule, many employees are involved, and the same position can be checked and cross-checked several times, but eventually, only one correction should be made!

● Functionality designed for marking the storage places. If the solution you are considering does not include the ability to organize the storage spaces marking, you will not be able to prepare the object to inventory quickly and efficiently. This is really mundane but important work, a lot depends on it.

● Data gathering has to support at least the most common methodologies. It is desirable that some of them would be able to support self-control mode of counting quality. On practice, during the inventory it is usually necessary to mix different data gathering methodologies. The more you have them, the easier you can reach the acceptable quality of the data gathering, as for different types of products and different opportunities the various techniques are effective. In the arsenal of the inventory solution, at least the following methods have to be present: blind count (by the catalogue of goods or by the gathering,  barcodes), double count.

● Functionality for assessment the quality of employees work. A lot of employees take part in the inventory and even one employee with his irresponsible work can nullify the efforts of the whole team. Therefore, there must be clear and understandable statistic regarding the effort of each employee. This will help to identify such employees and to take actions on them on time.

This is not the whole list of required functionality, but nevertheless, this is already something you could work with.

Once again, we would like to emphasize, if you are considering the inventory solution and it does not include at least one of the items mentioned above, it would be better to refuse from it and start looking for another one, even if it is for free. The price in such cases is not important, as otherwise you will have to compensate the lack of the functionality somehow and usually it requires additional resources, time and quality. And as a result, it will be more expensive.

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