What Is an Inventory Record?

Inventory information refers to the information of receiving and dispatching inventory, specifying the location, and adjusting inventory. Its role is to plan demand, manage finished product inventory, and arrange distribution channels. Inventory information is the center of the logistics information system and the most basic interface between planning and coordinating operations.

Inventory

Inventory information is information that accompanies inventory management activities. Corresponding to management activities such as ordering, forecasting, planning, and execution, the inventory information includes the order, the delivery of ordered products, and the feedback of product procurement. Inventory information management needs to filter out effective information from this information and process it quickly. The most important thing in sales management is to strictly follow the delivery time, place and quantity required by customers. Inventory management determines how to order, how much, and when to order based on a balance of service levels and costs. To this end, it is necessary to establish an inventory information system that can quickly process a large amount of information in order to quickly carry out logistics activities and effectively manage inventory. ^[1]

Inventory information is the most basic interface between logistics planning, coordination, and operations, and its role is to provide decision-making services for clear planning requirements and managing finished product inventory during the period from production to customer shipment. The first role of inventory information is forecasting. The forecast content is the customer's demand for products in each distribution center, thereby supporting logistics companies to make decision plans. ^[2]

Analyze the inventory material information from various perspectives, such as daily business data analysis of material entry, exit, and storage, material occupation fund analysis, material source and destination analysis, material classification composition analysis, etc., and can analyze various inventory management indicators , As in the inventory management strategies discussed in the previous section, various turnover rates, available time, etc. This information has a role in monitoring and promoting the company's inventory and other management work. ^[3]

In the invoicing system, warehouse control is an important link. It is the link between purchase and sales. Many important purchase information is passed to the sales and finance through the warehouse, and the sales information is also fed back to the database. ^[4]

The important data about inventory information is important reference information for measuring the service level and operating status of logistics companies, including data in the following areas. ^[2]

(I) Importance of collecting inventory information ^[1]

The collection of inventory information is the basis of inventory information management. All decisions regarding order quantities are based on the inventory balance of the item. Exaggerating or reducing inventory balances can cause out-of-stock or over-storage, and misplaced collection of inventory information can cause a chain reaction of many problems, such as: out-of-stock, under-sale, low productivity, delays in delivery, large payment of delivery costs, and insurance transportation fee.

Accurate inventory information collection is an important aspect of financial accounting and the basis of inventory management. The basis of any inventory management system is the information obtained in information collection, and decisions are made based on it. Without the completeness and accuracy of information collection, it would not be possible to build a practical inventory management system. Therefore, the accuracy of inventory information collection is a basic requirement of any inventory system.

(Two) the main points of inventory information collection

1. Make the most of your computer network. A simple inventory collection system is applied to a single warehouse, which can be achieved using the "increase and decrease method". Write down all the different inventory items on the record sheet and use the symbols (tick or draw lines, etc.) for recording. When you receive one, you add a symbol; when you send one, you cross out a symbol. The number of symbols on the record should be the same as the number of goods in the warehouse. If necessary, check the actual number of inventory with the record.

Complex inventory collection systems are used in warehouse systems with scattered stocks. The computer management software is used to register and delete the goods in and out of the warehouse. The quantity of goods stored in the database should be consistent with the quantity of goods stored in the actual warehouse. However, due to the scattered storage of goods, it is difficult to achieve accurate and efficient collection of inventory information using simple inventory collection methods. Therefore, we should make full use of computer networks to make statistics on the inventory information of decentralized warehouses.

2. Application of identification number. In order to track some special products, the method of marking the serial number and collecting it with the inventory information is often adopted. Such as cars, medicines, and food. Once these products are forced to be recalled when quality problems are found, they can be tracked by lot number based on inventory information, and all these non-conforming products must be removed from the warehouse and on the shelves of the retail store for recycling.

3. Use the scanner for inventory information collection. In recent years, another development of inventory management has been the use of electronic scanners to read bar codes. The data recorded by the scanner is directly connected to the computer to register the inventory records.

4 Collection of inventory information of goods in transit. Inventory managers believe that inventory consists of two items that are now stored in the warehouse and that have been ordered but not yet received. To avoid stock-outs, you need to estimate the likely time of receipt of the goods that have been ordered but not yet received. The minimum allowable time limit is when stocks have fallen to zero and can be replenished in a timely manner. For example, a salesperson receives a customer and finds that the goods required by the customer are no longer in stock in the warehouse. When he wants to return empty-handed, he sees that the warehouse manager receives the goods he needs from the receiving desk in time and replenishes the inventory. In fact, inventory includes all finished products that have been produced but not yet sold, as well as those products in transit that are shipped from the place of production to the place of sale.

In-transit inventory includes products being transported by means of transportation such as rail wagons, truck trailers or ships. Some cargo owners often use the convenience of changing railway wagons to stations and re-consigning for the sale of live products.

(Three) inventory information collection methods

1. Take stock regularly. The regular inventory information collection method is a method of regularly checking the inventory balance in the warehouse to check and maintain accurate inventory records. Collection of inventory information can be posted manually, machine-posted, or stored in a computer. The periodic inventory method requires a comprehensive inventory of various stocks in a short period of time. For most companies, an annual or semi-annual inspection is sufficient. If physical inventory is done only once a year, it is usually arranged when the annual production and inventory levels are at their lowest levels.

The time spent in the preparation of the annual physical inventory can be largely compensated for in the final outcome. A written standard procedure should also be prepared, which can also be used as training material. The work of physical inventory should include the following aspects.

(1) Organize. Place the item in its proper location for easy inventory.

(2) Check. Formally check all items by their number and name.

(3) Set the rules. Relevant personnel should relearn the methods and methods of inventory before inventory.

(4) Establish teams. Establish teams of two or more people, and provide responsibilities for taking inventory, checking, and recording inventory quantities.

On the inventory day, operations in the warehouse area should be stopped. A storage location should be designated for all items that arrive during the inventory period, as they are not included in the inventory. Moreover, all internal movement and handling should be suspended except in an emergency.

The more common method of recording inventory levels is the labeling method. The inventory team is responsible for the inventory, filling out the labels, and attaching the labels to the items. The labeling machine is suitable for both manual systems and computer systems. When an inventory team completes an area, it should be checked to ensure that all items are labeled, and then the labels are collected together. Articles at loading docks, export cargo storage areas, return cargo areas, trade fairs, etc. should also be included in the inventory.

Collection of inventory information and physical inventory should be consistent with inventory labels. The data from the labels are sorted into inventory lists. The inspection team should check for any significant variability and adjustment errors before the item resumes flowing. The inventory information collection and general ledger should be revised accordingly so that the balance on the record is consistent with the actual inventory.

The number of physical inventory is usually determined based on the value of the item and the ease with which the item is handled on the open market. Valuable or valuable items may be counted more often than general inventory items.

2. Cycle inventory. The cyclic inventory information collection method is a kind of physical inventory information collection method that is carried out sequentially rather than regularly. It is a basic method to control the accuracy of inventory information collection and maintain it at a high level. Through effective cycle counting, it can reduce production downtime, improve service to users, reduce obsolescence, cancel physical inventory once a year and reduce inventory loss, so it can achieve the purpose of increasing main income. Compared with the periodic inventory method which interrupts production, the cycle inventory method usually requires less expenses.

This method is to take stocks sequentially over the course of the year. A limited number of items are checked daily or at some other interval. Personnel can assign cycle counts based on whether they are full-time or part-time. The inventory items to be checked may be selected randomly or according to a predetermined plan. The cycle counting method does not need to stop the job like the periodic counting method.

The circular inventory method is widely adopted by many enterprises. It can be physically counted by professionals or permanently assigned warehouse managers. When it is performed by a fixedly assigned warehouse manager, they can complete the cycle inventory within the interval of work according to their respective responsibilities. When performed by a professional, because they are all full-time personnel, the inventory of inventory items is completed sequentially of. Because professionals are familiar with the order in which items are stored, item storage systems, and special issues that may occur, most businesses are happy to hire them.

Cyclic inventory can check the status of inventory information collection and obtain the accuracy of information collection. The accuracy of information collection can be measured by the percentage of error items and the relative value of errors. The significance of errors is related to the relative value of items. The error of one unit of valuables is significant, and for cheap items, an error of up to 2% may be acceptable.

The number of items to be sorted and counted by each enterprise should be carefully specified. The general principles to consider are described below.

(1) In any of the controlled inventory lists, a small part of the classified items should account for most of the inventory value.

(2) The more frequent the items (transactions), the greater the possibility of information collection errors.

(3) The manpower, time and funds spent on inventory control shall be distributed among them in proportion to the importance of the items.

Recurring inventory can focus on inventory items with high annual consumption (ABC principle). "A" items (that is, items with the highest annual consumption) should be most frequently counted, while "C" items are the opposite. "A" items can be counted once a month or two months, "B" items can be counted every 3 or 4 months, and "C" items are counted once a year. Although the category "C" items account for most of the inventory, but they account for a small amount of investment, it is not worth the effort. Every enterprise must arrange circular inventory according to its own characteristics.

There are a variety of programs on the market to change the frequency of cyclic inventory. The most popular systems are as follows.

(1) ABC system. Articles are divided into levels according to the ABC principle, with "A" items having the highest frequency and "C" items having the lowest frequency.

(2) Reorder system. Inventory items when reordering.

(3) Receiving system. Inventory items when receiving supplementary orders.

(4) No balance system. Inventory items when the inventory balance is zero or negative (backorder).

(5) Trading system. Inventory items after completing a certain transaction.

Of course, different combinations of the above systems can also be used.

When using cycle counting, only a small portion of the entire inventory is reviewed within a certain period of time, which greatly reduces the number of issues. Daily inventory can be coordinated immediately. Cyclic inventory can be used to count all inventory items at least once a year, or it can be established based on some statistical sampling. When statistical methods are used, those items randomly selected in a given category are counted and the results are generalized to all items.

Cyclic inventory method is a good method to maintain the accuracy of information collection. Its outstanding advantages are as follows.

(1) It is not necessary to stop the work during the cycle counting, and the physical inventory can be cancelled once a year.

(2) Can reveal errors in time, correct inventory information collection at any time and eliminate the reasons for errors.

(3) It can improve the accuracy of information collection, and can obtain more accurate asset statements. Inventory counting is not carried out in a hurry. Therefore, more accurate results can be obtained, which can save the inventory sales at the end of last year. And get the correct asset report at any time.

(4) Professionals can play a full role in obtaining reliable counts, adjusting errors, and finding ways to resolve system errors.

(5) can focus on problematic areas.