Lesson 3 -Limit access to your inventory.

     You cannot hold your specific people responsible for the material in your shop if it is open to everyone. Only the people receiving, moving and picking material should be allowed access to your inventory. After all do you think your bank allows everyone to wander around their vault?

     OK, hopefully you have an appreciation of the cost of lost and damaged material. Unfortunately, there is another reason material disappears…theft. Many owners find it hard to believe that their employees would steal. But unfortunately stealing is a very common reason for “inventory shrinkage”.

     You spend your hard-earned money purchasing products to better serve your customers. Are you spending the correct amount of attention tracking these products so you don’t inevitably run out before you know it? What is at the root of the problem? Are you providing your employee’s with the knowledge to make your business more profitable? Do your employee’s think about the lack of inventory control in terms of taking money out of their own pockets because there is too much or too little product in stock? As in the previous example of Jerry the technician, unusable product cost the company net profits and anything taken from your shop and not purchased is a very serious detriment to your business. Anything the company purchases is money taken out of the employees pockets and invested into the belief that it will create a positive return and enable the company to pay the employee their salary.

     Every member of every business should understand fully the value of inventory. They must see the direct relationship between inventory in the shop and turning that inventory into cash by selling it to customers and using that cash to pay employees and other expenses. As was stressed before, employees must see all inventory shrinkage as an expense that reduces the amount of money available to pay wages and benefits. It takes money out of their pockets.