Sales performance appraisal for Inventory

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welcome to whiteboard Wednesday where we discuss inventory management issues and we keep the concepts small enough that we can fit it onto a whiteboard i'm kirk tanner and i'm chief marketing officer of fishbowl and today we're going to talk about what is inventory management now this drawing here is a very simplified version of an inventory management is but it's good enough to get our point across let's start out over here we get goods delivered that come in to receiving all these items in receiving eventually have to be put away on the shelves and then later on we're going to pull these items some of these items might be pulled to be used in a manufacturing process or we might be involved in wholesale distribution and we'll just pull these goods and we'll send them out to our customers so they can do things with them regardless whether you're a manufacturing you've got to finish good or you're sending out parts all those pieces need to be shipped out at some point a lot of companies will actually do a manual process to keep track of all of this and accomplish their business processes some are using an automated process let's talk about the manual process here for a second this is very labor intensive we've got a lot of data that we need to keep track of this is only a small sampling of the data lot numbers serial numbers cost quantity dates for production expiration shipment when those goods come in to receiving that data needs to be captured for efficiency purposes and keeping track of your inventory you move that from receiving over to the shelves and you've got to update all this information that you're tracking when you pull this you've got to update it again so again if it's a manual process you're involved a lot in a lot of labor intensive activity to move these items all the way through to pick pack and then ship them that manual process is very labor intensive in an automated process when this truck delivers the goods you have a couple options one if it's a large ship but you can move it right into receiving and then scan it with a barcode scanner and move it to these locations scan these locations and now your automated system knows exactly where all that inventory is if it's a smaller shipment that arrives you can skip this whole receiving area and just barcode it right into the places that you put it on the shelves and you know exactly where it is how much you have and it's there when you need it now when you pull it off the shelves again you'll barcode it it's updating your system it's going through the manufacturing process or you're pulling it for distribution but this whole pick pack and ship process that ends up here you're tracking all of this through this automated system so that when it ships out the door all of your inventory is dynamically updated and is real-time data which ultimately gives you better information so our final math here in our accounting terms is we want to increase our tracking efficiency we want to do a much better job of tracking all the parts that go through your business we wanted to decrease the amount of time you spend doing that and the result of this is you get much better business information now to run your business the better the information the better the business decisions you can make so having this automated system becomes very very valuable because of the reports that you can get of course with better business information better reporting you get much greater efficiency and you reduce your costs and you have a much better run business that's it for whiteboard Wednesday join us again next you