Inventory management software: the process, flow by flow

Photographs the supplier's delivery order at the dock and uploads it to the receiving queue, or forwards the packing list that came by email.

• A delivery order with the same supplier and DO number as one already received is blocked as a duplicate.

Reads the delivery order, matches the supplier and each line to an open PO, and drafts the goods receipt with the quantities the document states.

• The PO number printed on the document is tried first. Without one, the agent lists the supplier's open POs that carry the same items, and the storekeeper picks one.
• Supplier item codes are matched through the supplier's item cross-reference before any match on description.
• Supplier units are converted with the item's pack size, so a carton of 10 boxes becomes 10 boxes.
• A field it cannot read clearly is left blank and flagged. A line that is on no open PO is flagged and never added to the receipt.

Counts each line on the pallet and enters the counted quantity, setting aside and photographing any damaged units.

• The counted quantity is a separate field from the document quantity, so a DO that says 10 does not become 10 received by default.
• Damaged units are entered as their own quantity, with a photo attached to the line.

Compares the counted quantity with the delivery order and with the open PO quantity on each line, and marks the line full, short, over or damaged.

• Counted below the PO open quantity: short, and the balance stays open on the PO.
• Counted above the PO open quantity: received only up to the supplier's over-receipt tolerance (0% unless agreed), and the excess is held as not received.
• Counted different from the delivery order: the storekeeper notes the difference on the driver's copy before the driver leaves, because the signed copy is the evidence for any claim.

Enters the batch number and expiry date, or the serial numbers, for lines on items tracked that way.

• Asked only for items flagged for batch, expiry or serial tracking. A box of screws asks for nothing.
• An expiry date earlier than the receipt date plus the item's minimum shelf life (for example 180 days for sealant) holds the line for the purchasing lead.

Posts the receipt into the Tuas receiving bay and suggests a put-away bin for each line.

• Stock in the receiving bay counts as on hand, but no pick list sends a picker to it.
• Bin suggestion order: the item's home bin, then an overflow bin in the same zone with space, then any empty bin.
• An expiry-tracked item goes to a bin that holds no other batch of the same item, so picks can take the earliest expiry first.

Scans the bin label at put-away, which moves the stock from the receiving bay into the bin.

• A bin other than the suggested one is accepted if it exists at Tuas, and is logged as an override.

Updates the received quantities on the PO lines as soon as the receipt is posted, without waiting for put-away, and releases the receipt for the supplier invoice match.

• The receipt carries the PO price, so the invoice match compares the bill with what was received, line by line.
• The log keeps the original document, what the agent read, what the storekeeper changed and who posted the receipt.

Reserves stock for each order line at the order's fulfilment location as soon as the order is confirmed.

• Reserved quantity = the lower of the ordered quantity and free to sell at that location.
• The remainder is marked awaiting stock and linked to the earliest approved PO or dispatched transfer for the item, whose due date shows on the order.
• Quotes read free to sell but never reserve.

Recalculates free to sell for the item at that location.

• Free to sell = on hand − reserved − quantity in quarantine bins.
• On order is shown beside it with its dates and is never added into free to sell.

Releases pick lists at the 3pm cut-off for orders due for delivery the next working day.

• Only reserved lines are released. An order set to deliver complete waits until every line is reserved.
• Orders are released in delivery date order, then by the time they were confirmed.

Assigns each pick line to bins and sorts the list in walking order through the warehouse.

• Expiry-tracked items: the bin with the earliest expiry first.
• Other items: the pick face before overflow, then the bin whose quantity covers the whole line, so each line is picked from as few bins as possible.

Scans each bin and item on the list and enters the quantity picked.

• A scanned item that does not match the line is rejected.
• The picked quantity cannot exceed the line quantity, and scanned batch numbers carry through to the delivery order.

Checks the picked goods against the delivery order, packs them and records the cartons and weight.

• Lines above S$500 and any repacked item get a second count before the carton is sealed.

Posts the delivery, reducing on hand and the reservation in the same transaction, and passes the delivered quantities to invoicing.

• On hand and reserved fall together, so free to sell does not jump between picking and dispatch.
• The invoice uses delivered quantities, not ordered ones.

Recalculates average daily demand for each item and location every night from the last 90 days of deliveries.

• Lines that sales flagged as one-off project orders are left out, so a single large job does not raise the reorder point for the next quarter.
• Transfers from Tuas to the Ubi showroom count as Tuas demand, because Tuas buys for both locations.
• Items flagged as seasonal use the same weeks of last year instead of the last 90 days.

Proposes a reorder point of average daily demand × supplier lead time + safety stock, and lists the items where the proposal differs from the current setting by more than 20%.

• Lead time is the average number of days from PO sent to goods received over the supplier's last six POs for the item.
• Safety stock is days of cover by value class (for example 5 days for class A) × average daily demand.
• Items reviewed weekly use lead time plus 7 days as the demand window, or they can run out between reviews.

Reviews the listed reorder point changes once a month and accepts, changes or rejects each one.

• A reorder point changes only when a person accepts it. The purchase order agent reads reorder points and cannot edit them.

Compares each item's stock position with its reorder point at the daily check.

• Stock position = on hand − reserved + on order.
• On order counts approved POs and dispatched transfers in. A draft PO is not counted as stock, but an item with an open draft gets no second draft.
• Stock in quarantine bins is left out of on hand.

Drafts a PO for each item below its reorder point, for the order-up-to level minus the stock position.

• Order-up-to level = reorder point + the item's reorder cover (for example 30 days) × average daily demand.
• The quantity is rounded up to the supplier's pack size, then raised to the supplier's minimum order if it is still below it.
• Lines for the same supplier go on one PO, at the supplier's current price from the price list.
• Items marked discontinued, made to order or under review are never drafted.

Shows the working on each line: demand, lead time, safety stock, stock position and the rounding applied.

Checks each line, adjusts the quantity or supplier where needed and submits the PO for approval, which follows the purchasing matrix.

• A quantity above 3 times the item's normal reorder quantity needs a note before it can be submitted.
• Each edit is logged against the draft with who made it.

Records the approved PO as stock on order with its promised date, so the next check counts it.

Drafts a replenishment transfer from Tuas for each item at Ubi below its minimum, for the maximum minus on hand.

• Ubi uses a minimum and maximum per item instead of a reorder point, because its supplier is Tuas and its lead time is the next van run.

Releases the transfer, which reserves the quantity at Tuas so it cannot be sold while it waits to be picked.

• Only stock free to sell at Tuas can be released. Anything short stays on the transfer as awaiting stock.

Picks the transfer by bin and posts the dispatch.

• Dispatch moves the quantity from Tuas on hand to in transit, with the person, the time and the vehicle recorded.

Holds the stock in transit until the receiving location confirms it.

• Stock in transit counts in the company's total stock and stock value, but is free to sell at neither location.
• The stock travels at its unit cost, and the transfer does not change that cost.

Counts the goods on arrival and confirms the quantity received.

• The count is entered before the dispatched quantity is shown, so the quantity confirmed comes from counting the goods.

Moves the confirmed quantity from in transit to Ubi on hand, and closes the transfer when nothing is left in transit.

• Any difference between dispatched and confirmed stays in transit and is flagged to both locations.

Classifies items each quarter by the cost value of stock moved over the last 12 months.

• Class A: the items that make up the first 80% of value. Class B: the next 15%. Class C: the last 5%.

Builds each day's count list so that class A items are counted monthly, class B quarterly and class C twice a year.

• Counts are spread evenly over the working days, and counts raised by exceptions are added on top.
• A bin with put-away pending is skipped and moved to the next day's list.

Scans each bin and item on the list and enters the quantity counted, without seeing the system quantity.

• The count screen never shows the expected quantity, so the counter cannot confirm a number instead of counting.

Compares the count with the system quantity at the moment the bin was scanned, and values any difference at cost.

• Using the quantity at scan time means picks posted between printing the list and reaching the bin are not reported as differences.
• A count that matches confirms the bin and resets its count date.

Recounts, blind, any bin where the difference is above 2% of the system quantity or above S$50 at cost.

• Recount matches the system: no adjustment. Recount matches the first count: the count stands. Recount matches neither: the warehouse supervisor counts.

Checks the item for unposted receipts, open picks and transfers in transit before any adjustment is drafted.

• A difference explained by a pending transaction is cleared by posting that transaction, without an adjustment.
• A difference found in another bin of the same item is fixed with a bin-to-bin move, which leaves stock value unchanged.

Drafts the stock adjustment with a reason code and its value at cost, and routes it under the approval matrix.

• Up to S$200 at cost: warehouse supervisor. Above S$200: operations manager.
• Write-offs of expired or damaged stock, any amount: finance manager.

Approves or rejects the draft adjustment, with a note if it is rejected.

Posts the approved adjustment to stock and to the stock adjustment account in the ledger.

• The posting keeps the count, the recount, the approver and the reason code with it.

Chooses the cost method with the company's accountant before the build: moving weighted average or FIFO.

• The method applies to the whole company and changes only at a financial year end, with a revaluation journal, because a switch mid-year restates margins already reported.

Values each goods receipt at the PO price, converted at the exchange rate on the receipt date for a foreign-currency PO.

• A later payment at a different rate goes to exchange gain or loss, never back into stock cost.

Links each freight, insurance, duty and forwarder bill to the import receipt it belongs to.

• A bill that covers several receipts is split by receipt first, then by line.
• Import GST is not linked as a cost: it is paid to Singapore Customs, and a GST-registered importer named on the import permit claims it back as input tax.

Allocates each charge across the receipt lines on the basis set for its charge type.

• Freight and insurance: by weight, or by volume for bulky, light goods. Forwarder fees: by value. Customs duty: only to the lines it was assessed on.
• A line whose item has no weight blocks the allocation until someone enters it, instead of being skipped.

Recomputes the unit cost under the chosen method.

• Weighted average: (quantity on hand × current average + quantity received × landed unit cost) ÷ total quantity.
• FIFO: each receipt is a cost layer, and deliveries use the oldest layer first.

Splits a charge that arrives after part of the receipt has been sold between stock on hand and cost of sales.

• Weighted average: the share for units already delivered goes to cost of sales, and the rest raises the average of the stock on hand.
• FIFO: the charge follows its layer, so only the units still in that layer take their share.

Lists items whose unit cost moved by more than 5%, with the account price lists and open quotes whose margin now falls below the margin floor.

• Prices are never changed automatically. The list goes to the sales manager, who decides any price change in the sales module.

Posts stock value movements to the ledger and reconciles the stock valuation report with the inventory control account at month end.

• Receipts, deliveries, adjustments and landed cost each post with their source record, so a month-end difference can be traced to a document.