Inventory Control – Warehouse and Finance


Welcome back, we appreciate you checking in with us here at Warehouse and Operations as a Career, I’m Marty, sharing a few thoughts and opinions as well as my own experiences about Warehousing and Operations each week.  If you’ve checked out a couple of our shows you’ve probably picked up on the idea that I really enjoy the Industry, I love discussing its opportunities, its many tasks & turning those jobs into Careers.  It was brought to my attention that I’ve mentioned the department or task of Inventory Control several times recently so I thought we’d talk a little about it today!

Many people assume that Inventory Control is purely an AP/AR position or a task of the Finance department.  While true the Dollars, or the products worth & Cost is in their wheel house, these days, at least in the large Production or Distribution environments we in the warehouse play a very significant role, through item counts to identify Shorts or Not On Truck and miss-shipped issues to Cycle Counts, Re-Packs and verifying warehouse and driver damages and operational shrink.

Many years ago, well not that long ago I guess, Inventory was kept on file cards, when product came in it would be recorded on a card, maybe in a flip card binder, with the date it came in or was Received, then as product was sold it would be recorded with the date of sale, the quantity, maybe even the invoice number would be recorded.  Kind of a running record if you will, product and quantity received, quantity sold and of course any damages or shrink would be deducted and noted as well.  We’ve come a long way since those days, this is one of those departments, one like most thankfully, that has benefited from technology, computers and systems.

There’s so many things that can affect our Inventories.  Receiving errors, there rare these days due to how we receive and verify merchandise through SUPC and Items codes that can be verified using systems and scan equipment though.  Then of course we have warehouse shrink, shrink includes things like damages that occur through the unloading process, hauling or forklift functions, the Selection Process, loading and delivery even.

Another component of shrink is sometimes Spoilage, product that may go out of date due to miss-rotation through slotting or not rotating the item with FIFO or First In First Out processes.  In my opinion, the op’s prospective I guess, there’s 2 types of Spoilage accounting, the warehouse side that we just spoke of and then a procurement or merchandising side such as over buying, and sometimes it can land in a Sales bucket or account due to it not moving quick enough or the sales forecast has changed or was incorrect.  More about spoilage later, let me get back to our warehouse side or duties as it relates to Inventory Control I guess.

Today’s distribution centers, and production facilities as well will probably be utilizing some kind of Inventory system.  There’s hundreds of them available, many of our larger companies have their own propriety systems, of course these are quick and very efficient as there built to our exact needs without any additional steps, punches or processes to get the information needed for our individual houses or opco’s.

Most of today’s systems can eliminate the need for closing the facility for a day through utilizing an accounting practice known as Cycle Counts.  Not being an accountant myself I won’t venture into the rules & regulations governing accounting at all but we can discuss what Cycle counting means to us on the floor or as warehouse men and women.

I use to hate Inventory days, we literally closed the facility for the day, usually over the weekend and literally counted every box in the warehouse, by item and by pallet lol.  Salesmen, merchandisers, actually everyone would come in, we’d each be assigned aisles and would take off counting every case, we’d bring the count sheets to a control table where the item would be tallied.  Then we’d get more sheets to go count different items or be sent back out to recount something others had already counted lol.  It would be a long day, a very inefficient system time wise but hey that’s how it was done.

Today Cycle Counts are a daily function, very efficient & they help identify and capture how a loss has occurred.

In many facilities, especially the larger centers the Finance department will send a set or list of items to be counted every day to an Inventory Control person to go out to the aisles and count the cases.  Most of these facilities will be utilizing a Directed System, meaning the system will give us the pick slots AND Reserve locations to find the product and verify that count as recorded.  The counts are assigned in such a manner that in a year or every six months or every quarter, what every your particular accounting responsibilities are, every item will be counted and inventory will be in sync and accounted for.

Other counts that are given to us may be to determine wither a case that transportation said was short or not on the truck was actually selected or not.  If were a case over it would be tagged as not selected by the warehouse or a warehouse error and if the count is correct then it would be tagged to transportation as it was selected and loaded, possibly given to the wrong stop.

Then of course all damages have to be recorded as well, we’ll have an assigned area to drop off any damaged product so Inventory control can deduct it properly and assign the error, or cost it out to the proper task like unloading, hauling or pallet running, the forklifts etc, not to assign blame necessary but to cost it out correctly.  Transportation will have an area for any damages or returns to go to as well so those cases can be deducted properly.

As Inventory Control we will probably be using powered equipment, pallet jacks and even forklifts, so yes we’ll need to go through the 29CFR1910.178 class and let’s remember, we NEVER want to get on any piece of powered industrial .equipment or operate any machine that we haven’t been trained to do so. I know I harp on it but hey, it’s the law & we each need to protect ourselves for our families’ right!  A couple of the PPE’s or Personal Protective Equipment we may be utilizing could include Steeltoe boots or shoes, I personally prefer boot’s as we’ll be working around pallets, bending over into the bays or pick slots and we have much more ankle support and protection than with just the shoe types, I usually wear my steeltoe shoes when I’m just walking the warehouses but always put my boots on when I’ll be working around pallets or using equipment.  A good bright Safety vest is great in this position as well, we’ll be in the aisles working around pallet jacks and lifts, it’ll help them see us and probably make them feel more at ease knowing we’re wearing them as well.  Maybe a pair of Safety Glasses also, they’ll come in handy should we be doing any lift work, looking up while retrieving a pallet from the reserve locations.  Use whatever equipment your facility requires and remember, there to protect us from harm, lets wear them.

Inventory Control is a great job, an important task.  We’ll need to be accurate and detail orientated, and it’s a good position to transition into other tasks.  I’ve known many men and women that moved into Pallet Running, Order Selection, even Fork positions and a couple into transportation as drivers.  Actually I just thought of an individual that moved over to the routing department and did very well with it.  It’s even a good pathway into the AP/AR departments, I have a longtime friend that started as a Cycle Counter who’s now running an Inventory Control Dept on the finance side, he’s made a great long-term Career out of it!

It’s also a great position to transition into from the warehouse, I’ve seen warehouse clerks, forklift drivers and a Quality Control warehouseman transfer into Inventory Control and made Careers out of it, really enjoyed their positions and were very successful with them.

I hope we’re picking up on the theme here, all the positions we’ve talked about throughout this series of episodes are great positions and Jobs, every job teaches us something we can use to learn other tasks BUT there all potential careers for us as well.  What’s important is to do something we enjoy, are the Best at it, show up every day on-time and do the job to the best of our ability right?

If you have any questions about the position or anything we talked about today please send us an email to and I’ll get us an answer.  As always, feel free to share your experiences on our Facebook and Twitter feeds & catch up on any missed episodes on iTunes, Google Play or TuneIn Radio or the website  Please remember Safety is our first concern, our first responsibility in any position, let’s insure we have a long and productive life!

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