The very livelihood of a bank depends on their ability to manage their inventory – which is the money that has been given to them by their customers. If your bank statement was riddled with errors each month, or if at the end of the statement all you got was an estimate of how much your account was worth, would the bank be in business long?
Now maybe it isn’t necessary to have as tight control of your inventory as a bank does, but there are still some critical points to take away that apply to any business.
1) Realize the value of your inventory. Once you have exchanged dollars for the goods you put on your shelves, there is a tendency to dismiss its value. But think of each item on your shelves as a little stack of money instead of a widget and it will give you the necessary perspective for successful inventory verification and management. How often do you misplace even a $5 bill? Would $5 bills be found lying around your warehouse? No. So why would any of your inventory not be treated the same way?
2) Record every transaction. The reason bank inventory is so tightly controlled is every time even a penny goes in or out, it is entered into the computer. This should be the case for sales demos, evaluation units, product substitutions, return material, work in process, maintenance, and expired inventory as well as standard receipts and issues. To best ensure this is happening, make it as easy as possible to record such transactions. If somebody has to write it down on a piece of paper and key it in later; if there is no terminal nearby to record the transaction; if it takes too long to boot up a terminal or login; or for any other reason the transaction is not being recorded immediately, then your inventory integrity will suffer.
3) Make people accountable. Every bank teller is responsible for their cash drawer balancing at the end of their shift. If it is off repeatedly, then they probably won’t have a job for long. Again, accountability doesn’t necessarily need to be so regimented for most inventory, but the people who perform the inventory transactions should have some skin in the game.
4) Audit. It would be wonderful if every person was trustworthy and also wonderful if every person never made a mistake, but that doesn’t happen. In the inventory world, the use of cycle counts performed by a second party, when done periodically, can help root out inaccuracy. Cycle counts not only find errors in inventory integrity, but can reveal the reasons such errors occurred.