Inventory & production cycle
A Store Raw Materials
B Produce Finish Goods
C Transfer Storage of Finished goods
A. Store raw materials
Raw materials stored
protected
until production
How should this be done
storage
Barcoded entered into inventorysystem
frequent checks againsttheoretical stock levels
System should record
Serial
Title
Description
Isolated area Demarcated
Warehouse organised
to find
easy
to transport
easy
m
limited individuals
Access control
only
one
entrance from
within shop
Doors
Windows secured
Alarm system
detectors
Fire protection
extinguishers
Authorisation
signed documentation required
for movement of raw materials
1
B. Production of finished Goods
Attheproduction division Factory
pre printed
Manufacturing clerk must complete
numbered raw material requisition form for
a
pre
raw materials as per production plan schedule
sign
Date ofrequest
Quantity
Description
Branch
signed
Authorised
name
Factory manager
3 copies
as
If
evidence
Raw material warehouse prepare
dispatch
update inv records
Accounting Dept
Material Warehouse
Raw
the
At
Raw materialstoreman prepares items for transfer
to factory
on
basis
of
raw material requisition
completes raw material transfer note for
materials issued
pre numbered Quantity
Date
Description
sign
Raw material store manager must authorise aftercomparing
QQD of issue to requisition
sign the transfer
no
note
items leave if they do not appearon
requisition
3 copies
ProductionFactory accompany goods
sequence
Material Store Records
Raw
Inventory clerk
accounting
Inventory
records
Reviewer must check that all
Warehouse
Independent
raw
are accompanied
by
raw material requisition notes
material transfer notes in records
Production managers must do the same at
Follow up
on
the factory
missing orders
C. Transfer & Store of finished Goods
Manufacturing clerk
Possibly
a different one
goods transfer
a finished
finished goods from
must prepare
note to transfer the
factory to finished goods
store
Finished Goods Transfer Note
a
pre numbered
manufacture clerk
signed by
Dispatch date
Quantity
Authorised
3 copies Factory
Accounting
Description
signed by Factory Manager
Sequence checks
evidence
Invoice records
Finished Goods Store
goods
any
Independent Review
Inventory Count
Planning and preparation (before the count)
Planning meeting:
-Establish date and time
-Location
-Interested parties (inform them of when count takes place. Inventory movement (and access to it)
will be limited at this time so suppliers and stakeholders must be aware. Ensure that enough counters
will have time available to perform count)
Warehouse organisation:
-warehouse must be neatly packed and easy to find products
-Easy to move and transport goods, similar items together
Method of counting:
-Teams of 2 counters
Written instructions:
-auditor must review before hand & provided to all parties
no open spaces
Count Sheets:
-prenumbered prepointed
counterssign register upon
receiptof sheets
-completed in ink
-Counters fill in information under preprinted headings:
-Description of items
cross out unused lines
Both counters sign fortangthate
changes made on sleet
-location of items
damagedinventory
marked
separately on countsheet
-count per item
-signatures
During the count
-Counters in pairs of two count the items and record (one counts one records)
-Fill in the details as prompted by the headings
-unused lines crossed out
-work through store SYSTEMATICALLY
-counted items marked with stickers
alternatively scanned
-all items / areas of warehouse should be recounted by an other team
-during the inventory count, counters must identify obsolete or damaged stock as well as stock
held on behalf of third parties
-Supervisor must identify the above mentioned stock and exclude from inventory records
-Remember goods in transit!
-sign to pin responsibility
-supervisors must continually make sure that their teams are counting according to procedure
After the count
-The supervisors receive the counting sheets and confirm that:
-all count sheets are received back
-No omissions or errors
-There are no unauthorized changes
-Follow up on differences
-signed by counters
-Supervisor signs and hands over to coordinator
-coordinator reconciliatory the counting sheets and if there are differences they are counted
again by a third counting team.
Must be immediately resolved
-no additional unauthorized changes may be made by the coordinator once inventory sheets are
returned
-Inventory system compared to physical count sheets - adjustments should be made
-independent party reviews the comparison and corrections and signs (eg the accountant)