Inventory Control Checklist

Quarterly inventory control workflow for a small-to-mid manufacturer. Materials planner, inventory control lead, and warehouse supervisor run this together to verify counts, investigate variance, and tune reorder parameters against actual demand.

5 sections 21 steps Collects data
1

Pre-Count Setup

  1. Run ABC analysis in the ERP

    • Pull the ABC report from NetSuite, Epicor, or Dynamics — whichever drives your item master. A items (top 80% of usage value) get cycle-counted monthly; B items quarterly; C items annually. If the last analysis is older than 12 months, the count cadence is stale.

  2. Freeze inventory transactions in the ERP

    • Lock receipts, issues, and WO backflush during the count window. Coordinate with production scheduling — anything mid-route stays in WIP and is counted separately. Failing to freeze is the #1 reason cycle counts disagree with the system for reasons that have nothing to do with real shrink.

  3. Print count sheets and bin labels
  4. Brief counters on the count SOP

    • Walk counters through blind-count rules (no system quantity visible on the sheet), lot/heat capture for traceable material, and the variance escalation threshold. New counters always pair with an experienced counter for the first day.

2

Physical Count Execution

  1. Count raw material and WIP locations

    • Cover the raw stockroom, line-side kanbans, and any WIP staged at work centers. Capture lot/heat numbers on traceable material — stainless, alloy steel, food-contact resin — so the count doubles as a traceability audit.

  2. Count finished goods and MRO locations
  3. Cycle count A items at the bin level

    • A items get a blind recount by a second counter. Disagreement between the two counts triggers a third count before the result goes into the reconciliation worksheet.

  4. Flag obsolete and slow-moving stock

    • Tag anything with no movement in 12+ months, expired shelf life (epoxy, adhesives, food-grade resin), or revs superseded by an ECN. Segregate to the obsolete cage pending disposition — don't write off during the count.

  5. Submit count sheets to inventory control
    Collects file
3

Reconciliation and Variance Investigation

  1. Compare counted quantities against ERP on-hand
  2. Classify variance against materiality threshold

    • Variance over the materiality threshold (commonly 2% of item value or any single SKU over $500) requires investigation before adjustment. Do not auto-post adjustments through the threshold — that's how real shrink hides for years.

    Collects list
  3. Investigate root cause for material variances

    • Run 5-why on each material variance. Common root causes: unreported scrap, miscounted receipts, BOM consumption errors on backflush, mis-staged kits, mis-located bins, theft. Document the cause code per SKU.

    Collects paragraph
  4. Post inventory adjustments in the ERP
  5. Disposition obsolete stock to scrap or write-off

    • Plant manager signs off on write-offs above the threshold. Hazardous material (solvents, plating chemistry) routes to the EHS-approved waste stream with manifest under your RCRA generator status — not the dumpster.

4

Reorder Parameter Tuning

  1. Pull 12-month usage and lead-time data
  2. Recalculate reorder points and safety stock

    • Update ROP using current average daily usage × supplier lead time, plus safety stock sized to demand variability and supplier OTD. Items where supplier OTD has slipped below 90% need a safety-stock bump until the supplier scorecard recovers.

  3. Resize kanban quantities at line-side bins

    • Recompute kanban card count using the takt-based formula: (avg demand × replenishment lead time × safety factor) / container quantity. Flag any line where the new count differs from current by more than one card — those need a walk-the-line review with the cell lead.

  4. Review supplier scorecards with purchasing

    • Pull OTD %, PPM defective, and lead-time variance per supplier from the last quarter. Suppliers below threshold get a corrective action request from the buyer. Sole-source items with poor scores trigger a second-source feasibility review.

  5. Push updated parameters to the ERP item master
5

Closeout and Reporting

  1. Publish inventory accuracy and turn metrics

    • Report record accuracy (% SKUs within tolerance), inventory turns, days on hand, and total adjustment value. Trend against the prior three quarters — a single quarter in isolation hides whether things are improving.

  2. Sign off on the quarterly inventory review
    Collects list Collects paragraph Collects signature

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Sections 5
Steps 21
Category Manufacturing
Price Free to start
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