A great deal of materials run in and out of your inventory storage locations and many can be mislaid, mis-slotted or can simply go missing. To help your inventory department/team get better at their jobs, we recommend the following ideas be implemented on a schedule known only to the management department:
1) Perform random and detailed checking of loads on outbound trucks at the dock.
2) At least twice each month, call a driver back in after she/he has left the facility. Thoroughly check the load. Check drivers on a random basis.
3) Perform receiving by appointment coupled with a random detailed checking of incoming loads.
4) Commit deliberate errors. Discover what your staff does if, for example, you see that more finished goods than the shipping order calls for reach the platform? Will the shipping clerk return the excess to stock? Will she/he try to divert it for personal use (perhaps in collusion with a truck driver)? Will the clerk simply ship the order without ever knowing that the excess existed?
5) If the bookkeeper and the accounts receivable clerk are not dependable, alert, and honest, disaster can result. Check them by withholding an invoice from each of them and watching to see what they do. Will they miss the invoice? Will they realize that a missing invoice means lost revenue and call it to your attention?
6) Unannounced inspections are another excellent method of checking your preventive procedures. Such inspections are most effective during overtime periods or when the second or third shift is working. For example, one owner-manager popped up on the shipping platform after the second shift left. He noticed a loaded truck parked at the platform and ordered it unloaded. The cartons in the rear were legitimate deliveries, but he found the front half of the truck crammed with stolen goods. The checker, who was hired to see that such stealing did not happen, had gone to sleep and let the accommodating driver load his own truck.
Once employees understand that there is an ongoing effort to discover and hunt down the causes of inventory discrepancies, they will also understand that management is watching. The resulting benefits to your business will make all this checking and testing worthwhile.