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Inventory control policy
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Inventory valuation policy
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Inventory security policy
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Inventory quality policy
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Inventory risk assessment policy
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Inventory risk mitigation policy
Inventory risk management is the process of identifying and mitigating the potential losses or disruptions that may occur in your inventory operations. Inventory risks can include theft, damage, spoilage, obsolescence, overstocking, understocking, and inaccurate forecasting. In this article, we will discuss the key inventory risk management policies and procedures that can help you reduce these risks and optimize your inventory performance.
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- Larry Grando Fastener Advisor Building Materials 5
- Dontae Pelzer CEO @ #YourLocalConsultants | Assistant Manager @ #Curaleaf Hudson Valley — A personable leader that excels in sales… 1
1 Inventory control policy
An inventory control policy is a set of rules and guidelines that define how you manage your inventory levels, replenishment, and tracking. It should specify the inventory methods, systems, and tools that you use, as well as the roles and responsibilities of your inventory staff. An inventory control policy can help you maintain optimal inventory levels, avoid stockouts and overstocks, and improve inventory accuracy and visibility.
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In my experience, a inventory system should be used to track all inventory logistics including (but not limited to) barcode number, batch number, UPC, intake date, expiration date, quantity, and company name. Having a system will optimally help with the order process, and understand your TIL.One point of advice when handling perishable inventory, is to rotate stock daily. Keep older stock in the front, and keep the fresher stock in back stock/over stock.Another tip is to run inventories as much as possible, and hire a third party vendor to conduct yearly inventories to assist in confirming levels.
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To add to this I would suggest including processes that staff understand . Training staff about the impact on inventory from transactions ( selling, RTV , discounts, damaged, discontinued products. Processes clearly for receiving, shipping, and or supplies used say for manufacturing.Use technology to your advantage, make sure staff know how to use it. Finally pay attention how your product moves through the system. Is it tracking inventory through the whole lifecycle, are there gaps? The more you are able to track the less risk to the validity of your inventory reports.
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In my experience if your policy does not include tracking lost sale data or abnormal demands your missing an important part of predicting true needed min/max inventory.
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2 Inventory valuation policy
An inventory valuation policy is a set of rules and guidelines that determine how you measure the cost and value of your inventory for accounting and reporting purposes. It should specify the inventory costing method, such as FIFO, LIFO, or weighted average, that you use to calculate the cost of goods sold and the ending inventory value. It should also specify how you account for inventory write-offs, discounts, and allowances. An inventory valuation policy can help you comply with accounting standards, tax regulations, and audit requirements.
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3 Inventory security policy
An inventory security policy is a set of rules and guidelines that protect your inventory from theft, damage, or loss. It should specify the physical and digital security measures that you implement, such as locks, alarms, cameras, access control, encryption, and backup. It should also specify the inventory audit procedures that you follow, such as cycle counts, physical counts, and reconciliation. An inventory security policy can help you prevent inventory shrinkage, ensure inventory integrity, and detect inventory discrepancies.
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- Manuel Rodriguez Striving For Goals
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In this instance, look within your own employees for the training needed for proper handling that also includes their safety to preventing loss and damage and to understand integrity for theft. Proper training goes a long way.
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4 Inventory quality policy
An inventory quality policy is a set of rules and guidelines that ensure your inventory meets the quality standards and expectations of your customers and stakeholders. It should specify the quality control and assurance processes that you apply, such as inspection, testing, verification, and certification. It should also specify how you handle inventory defects, returns, recalls, and warranties. An inventory quality policy can help you improve customer satisfaction, reduce quality costs, and comply with quality regulations.
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5 Inventory risk assessment policy
An inventory risk assessment policy is a set of rules and guidelines that enable you to identify, analyze, evaluate, and prioritize the inventory risks that may affect your business objectives. It should specify the risk identification methods, such as brainstorming, surveys, or checklists, that you use to collect information about the potential inventory risks. It should also specify the risk analysis and evaluation tools, such as matrices, charts, or scores, that you use to measure the likelihood and impact of the inventory risks. An inventory risk assessment policy can help you develop effective inventory risk management strategies and plans.
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- Yaw Kissi Accountant|Analyst|Writer
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Identifying and prioritizing inventory management risk is important. In my current role as the inventory manager, I walked into the role and realized a lot of risks but having a proper risk review enabled me plan properly on how to set controls based on priority. The absence of reorder system was key to me as it left the department blind. Reorders were based on intuition.
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6 Inventory risk mitigation policy
An inventory risk mitigation policy is a set of rules and guidelines that define how you implement the actions and measures that can reduce or eliminate the inventory risks that you have identified and evaluated. It should specify the risk mitigation strategies, such as avoidance, reduction, transfer, or acceptance, that you adopt for different types of inventory risks. It should also specify the risk monitoring and review processes that you conduct to track the progress and effectiveness of your risk mitigation actions. An inventory risk mitigation policy can help you improve your inventory performance, resilience, and sustainability.
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- Larry Grando Fastener Advisor Building Materials
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Risk assessment and risk mitigation should be reviewed on a regular basis. This will determine if there are gaps in processes, procedures , and or functionality problems. Remember inventory is fluid , it is also different from industry to industry, sector to sector understanding how it moves throughout the organization will give better results.
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