Attaining accurate inventory counts

We're having trouble monitoring the counts of specified items, calculating an accurate budget for inventory costs, and staying within that budget. We've identified our A, B, and C inventory items. What more can we do to get inventory under control?

"It sounds as if you're having accuracy problems," says Ronald Althaus. "Inventory accuracy is a prerequisite for any control or cycle-counting program. Otherwise you'll feel like you're chasing your tail; simply adjusting on-hand balances is a never-ending struggle."

If your accuracy is below 90 percent, Althaus recommends counting a small sample of the items that seem to be inaccurate every week. "This approach will help you identify the root causes for your inaccuracies," he says.

When your counts consistently match your records, start performing weekly counts on your next-most-serious group of offenders. It shouldn't take as long to achieve accuracy with the second inventory group, Althaus says, because at this point you'll be employing the techniques and solutions you identified to get control of the first group.

Editors' note: For more on inventory management, see Ronald Althaus' June, July, and September Practice Tips on inventory management.