best practices and alternative
techniques for property inventories
Al Green, CPPM CF
April 2014
Value Through Professional Asset Management
2014 NPMA Spring Seminar
Opinions or Facts
What are the best practices and alternative techniques for property inventories?
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2014 NPMA Spring Seminar
Property Inventories
This session will include a discussion regarding best
practices and alternative techniques for property
inventories
The primary purpose of a physical inventory is to establish a current,
accurate baseline of existing assets.
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2014 NPMA Spring Seminar
The focus of this
presentation is on
personal property
assets
Property Types
Personal
Real
Land
Property, Plant and Equipment (PP&E)
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2014 NPMA Spring Seminar
Who are your Stakeholders?
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Subject Matter Experts
Personal Property Staff
Property Management Officers
Accountable Property Officers
Custodial Property Officers
Cognizant Employees
Receiving and Disposal Officers
Warehousing Specialists
Inventory Counters
Senior Executives and Managers
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Acquisition Officers
Grant and Cooperative Agreement
Officials
Contractors and Sub-Contractors
Auditors
General Accounting Office (GAO)
Office of Inspector General (OIG)
Public – Tax Payers
Other Stakeholders????
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2014 NPMA Spring Seminar
Examples of Personal Property Assets
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2014 NPMA Spring Seminar
Breakdown Your Inventory Process
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• If possible separate the
duties.
• Centralized receiving
within the organization
greatly facilities the
inventory process. –
Control.
• Tag all capitalized and
controlled assets.
• Tag all leased
equipment.
• Serialized equipment –
why tag?
Purchaser
Receiver
Tagger
Locator
Records Custodian
Inventory Counters
Researchers to
Resolved Errors
• Certifiers
• Reporters
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2014 NPMA Spring Seminar
What Impacts Property Inventories
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Appropriations
Working Capital
Fund
NonAppropriations
Gifts - Donations
• Lease vs.
Purchase
• Missing and
Stolen -Report of
Survey
• Certified
Recycling
• Thresholds
• Depreciation
• Transport,
Shipping and
Maintenance
• Salvage
• Warehousing
• Open Storage
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Sale and Exchange
Transfers
Excess
Surplus
Loans
Contractors
Sub-Contractors
Grants
Cooperative
Agreements
Take-Back
Programs
2014 NPMA Spring Seminar
Inventory Frequencies Impacts
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Daily
Weekly
Monthly
Quarterly
Semi-Annual
Annual
Special Inventories
FY - BOY and FY - EOY
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Transactional
Network
APP - Mobile
Smart Card
2014 NPMA Spring Seminar
Other Inventory Planning Elements
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Data collection and related standards – data security
Tag placement in a uniform fashion
Communications
Building and location access
Schedules
Daily sweeps
Information management
Contingency plans
Post inventory deliverables and timeframes
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2014 NPMA Spring Seminar
Asset Tags
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Tags incorporate human readable numbers.
Serial number.
Model number.
Asset number.
Location.
Cost or Responsible Center.
Tag placement on the front of each asset.
Classifications – group to track various types of assets
independently
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2014 NPMA Spring Seminar
Use Various Data Collections
Methodologies
 Provide pictures of each asset model and associate the
picture with asset profile.
 Use Barcode Readers
 Use RFID Scanners
 Use Global Positioning Devices
 Use Smart Cards
 Use Mobile Apps – Push and Pull Inventory Reports
 Use E-Mail
 Use Vendors
 Use a Data Dictionary
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2014 NPMA Spring Seminar
Concepts to Reduce Inventories
Type of Savings
Prime Vendor
Delivers inventory items to the customer
within hours of reviewing the order.
Integrated Supplier
One or more suppliers locate distribution
center close proximity to their customers.
Inventory Reductions
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Holding Cost Reductions
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Product Cost Reductions
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Distribution Cost Reductions
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This table illustrates realized
savings from reduced inventory
levels and the associated
holding and distribution costs
and realized reduce product
costs.
Local Distribution Centers/Supplier Parks
An integrated supplier assumes total inventory
management responsibilities for a customer.
Electronic Ordering System –
Supplied by Vendors
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Estimat
ed
Amount
s
Source: Slide 17 – 3rd Bullet
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Develop Efficiencies
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Develop inventory accurate rates based on commodities.
Develop inventory reconciliation policy and procedures.
Develop fast moving items in warehouse to a in-reach concept.
Develop just-in-time deliveries to avoid maintenance delays.
Develop bench stocks for fast moving consumables.
Develop locations to improved the availability of inventory.
Use ASTM standards to benefit your inventory processes.
Outsourcing ‘certain’ inventory activity to external vendors.
Smoke out inefficiencies in your inventory management processes.
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2014 NPMA Spring Seminar
Old Property Inventory Methods
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Wall-to-Wall – Closed and Open
Cycle Counts - Partial Counts
Wall-to-Wall - Full Count – Closed and open inventories are essentially full blown
physical counts. Closed inventory nothing moves or changes until the count is
completed. During an open inventory, the asset base can change allowing for
greater possibility of error. Business operational requirements often dictate the
viability of an open vs. closed inventory.
Cycle Counting – A cycle count is a partial count of selected items within specific
areas. The count “cycled” through various items and various areas over time. The
results are used as a “barometer” measurement of the whole, without having to
verify the entire asset base.
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2014 NPMA Spring Seminar
New Property Inventory Methods
 Inventory by Exception
 Transaction based
Inventory
 Statistical Random
Sample
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2014 NPMA Spring Seminar
Ways to Count Property
 Physical Count
 Barcodes
 Radio Frequency Identification Data (RFID) Based
Solution
 APPs – Mobile
 Transaction Date of Last Inventory - Inventory Note
 Movement – (e.g., Refueling)
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GAO Best Practices
 GAO, Best Practices in Achieving Consistent, Accurate
Physical Counts of Inventory Counts of Inventory and
Related Property, Appendix I: Implementation Checklist,
March 2002
 GAO, Best Practices: GAO Best Practices:
http://www.gao.gov/docsearch/featured/bp_reviews.html
 GAO, Inventory Management, Greater Use of Best
Practices Could Reduce DOD Logistics Costs, GAO/TNSIAD-97-214, July 24, 1997
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2014 NPMA Spring Seminar
OIG Best Practices
 Issue self-audit guides to business units – makes employees
aware of internal controls.
 Train new business unit staff and managers in control issues.
 Set-up an on-line internal control library that contains records
from previous audits.
 Focus on improving systems and procedures, changing the
attitudes of staff and improving the overall integrity and
performance of the business unit.
 Manage the risks involved in business units to maximize
opportunities and minimize adversity.
Source: www.fau/fiscal/best-practices/OIG.pdf
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2014 NPMA Spring Seminar
Primary Objectives of Internal Control
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Reliability and integrity of information.
Compliance with policies, laws and regulations.
Safeguarding of asset.
Effective and efficient use of resources.
Achievement of strategic goals.
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Questions
Al Green, CFPPM CF
Senior Personal Property Manager
Department of the Interior
Office of Acquisition and Property Management
1849 C Street N.W.
Mail STOP - 4262
Washington DC 20240
Albert_Green@ios.doi.gov
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Value Through Professional Asset Management
2014 NPMA Spring Seminar