Investigating and determining the cause(s) of a discrepancy can be a tedious & time consuming process.  You must consider an item’s overall value, amount of variance, current inventory levels, & item history when determining the amount of resources to spend on an investigation.  

When a thorough investigation is warranted, the item’s Related Records tab will be your best resource  for research.  Below is a list of possible explanations for a discrepancy, and the records related to it.  These include (but are not limited to):

• Item was picked during a count  [Bin Transfers, Item Fulfillments]
• Receiving Errors - entered wrong qty, Unit of Measure, wrong item  [Item Receipts, POs/Bills, scanned Receiving paperwork / Vendor Invoices / BOLs]
• Vendor Errors - shortages/overages, wrong item [Bills, scanned Vendor Invoices / Receiving paperwork / BOLs]
• Picking Error - wrong qty, Unit of Measure, physically picked wrong item  [Bin Transfers, Item Fulfillments, Invoices]
• Purchasing / Product Management -- SKU changes, incorrect or changed Sale Unit of Measure  [item’s System Information, POs / Bills / Vendor invoices]
• Quantity is at another bin -- qty is at an alternate or previously used bin location, picker returned item to wrong bin  [Bin History, physical investigation]
• Quantity is “frozen” in a picked bin  [Picked Bins]
• Previous adjustment  [Inventory Adjustments]
• Transaction Error  [Credit Memos, Transfer Orders [AFG>FBA], Item fulfilled from wrong bin]
• Bin Putaway / Bin Transfer Error  [Bin Transfers]
• System Error 
• Theft

When performing a thorough investigation on an Inventory shortage, the quantity in question should be moved to an Unavailable bin [such as “INV_DISCREP” bin].  This will prevent the items from being committed to an open Sales Order.

All investigations should be completed in a timely manner.  Inventory should not remain in Unavailable for longer than 2-3 weeks, unless for an express purpose (i.e. waiting on Purchasing/Vendor resolution, etc) 

Unavailable Inventory with quantities greater than 20 units are emailed to Jayson via the weekly “Unavailable - Large Qty Items” report.  

Adjusting Inventory Records - Best Practices

Inventory adjustments are made for a variety of reasons, by a variety of departments, and affect a variety of records & accounts.  Inventory record accuracy is critical, therefore permissions to make inventory adjustments should be strictly limited to Inventory Control Specialists or other key specialist positions where this function is necessary to complete their daily tasks &/or update inventory records.  

Before being granted permissions within NetSuite to make inventory adjustments, an employee should be thoroughly trained and have a full understanding of the process & its effects on various accounting & departmental functions.

As with cycle count adjustments, any item adjustment exceeding $200 should be approved by the Inventory Control Supervisor &/or a detailed explanation provided in the Memo field on the inventory adjustment.  See “Creating Inventory Adjustments” manual for detailed SOPs & instructions.

Product Issues - Best Practices

All product issues discovered “on the shelf” that exceeds $100.00 in value should be reported to Purchasing via email [ purchasing@afgdistribution.com ].  This includes excessive damages [linked to inferior vendor packaging], damaged packaging/displays, missing parts, etc.  Product should be moved to an Unavailable bin & held, awaiting a resolution.

When reporting an issues, Purchasing requests that you include the following info:

• Quantity
• AFG SKU
• Vendor
• Vendor MPN
• Detailed description of the issue
• Pictures [attachment]

All issues not resolved within 90 days can be scrapped from inventory.

Lot Controlled Items - Best Practices

All lot controlled items are to be received using the products Expiration or Best By date preceded by the letter E.  Any product without an Expiration or Best By date will use the Received date preceded by an R.  
Example:  E01312020 [expiration date of January 31, 2020] or R08142017 [no exp date - Received on August 14, 2017]

The inventory control department will review all lot controlled items on a monthly basis, identifying products below:

• 5 months prior to Exp/Best By date -- Notify the Sales Mgr 
• 3 months prior to Exp/Best By date -- Pull product, and do one of the following:

• <$100 value -- Scrap & trash
• >$100 value -- Notify Purchasing so they can pursue vendor return &/or credit

See the full “AFG Perishable Items Policy” for more details on AFG policies.
See “Lot Controlled Items - Monthly Review” for instructions on performing the monthly review.

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