Lean inventory advice

Watkins Uiberall told businesses to treat excess inventory as a margin problem, not a safety blanket, because storage, insurance and obsolescence all add cost. (wucpas.com) The Memphis accounting and consulting firm said inventory control should start with a physical count and a comparison between the stock on hand and perpetual inventory records. It also pointed companies to industry benchmarks such as gross margin, net profit margin and days in inventory. (wucpas.com) Watkins Uiberall said carrying costs include storage, insurance, obsolescence and pilferage, and it advised businesses to compute margins product by product before deciding what to keep. The firm said companies can return slow-moving supplies to vendors when possible and renegotiate supplier terms before cutting too deeply. (wucpas.com) Warehouse discipline sits underneath that advice. Standard warehouse flows usually begin with receiving, then inspection, putaway, storage, picking, packing and shipping, and weak control at the front end can leave inventory records wrong before orders are ever filled. (kladana.com) Receiving is the dockside step where staff unload goods, verify counts and check them against purchase orders, and warehouse operators say manual, nonstandard receiving is a common source of inventory errors. Putaway is the next step: assigning goods to the right storage location and recording that move so stock is available in the system as soon as it hits the shelf. (goaudits.com; dvunified.com) That matters most in places where replenishment is slow and freight is expensive. In Guam and the Commonwealth of the Northern Mariana Islands, nearly all goods are shipped in, and local officials have warned that supply-chain disruptions can quickly raise costs and delay essentials. (pacificislandtimes.com; gao.gov) In multi-island networks, bad inventory data can trigger emergency transfers that move stock by air or sea from one location to another after a stockout is discovered. Logistics providers in Guam and Hawaii market inter-island transfer services precisely because businesses often need inventory shifted across dispersed warehouse networks. (shipbob.com; dhx.com) Watkins Uiberall’s broader message was to cut stock with a plan, not by guesswork. The firm said companies should pair leaner inventory with faster supplier delivery, better forecasting software and a product mix that still matches customer demand. (wucpas.com)