Making a list, checking it twice
Just like St. Nick, our “elves” are busy long before the holiday season. While Dawson PPD isn’t reviewing who’s been naughty or nice, they do check their material inventory…twice. It’s called an annual physical inventory count, and it occurs around another popular holiday – Halloween.
Counting Dawson PPD’s inventory is important because it ensures the documented materials match the physical amount. As a publicly owned, not-for-profit business, Dawson PPD has checks and balances in place to ensure customer dollars are invested wisely.
The process of documenting and counting the inventory involves a team approach with the Purchasing and Finance Departments at the heart of it all.
Automated Warehouse System
The warehouse inventory is tracked with an automated system using bar code scanners and iPads. To take an item out of inventory, an employee first scans a barcode unique to their name. Then, they scan the barcode of the item and manually enter the quantity taken. This notification is sent to the foreman or warehouse supervsior, who check the materials and quantity against a work order.
Once they approve, the item is posted and the warehouse inventory list is updated i
n real-time. From there, Manager of Purchasing, Facilities and Fleet Jerry Hobelman can see which items need to be reordered.
“The automated process has brought a great level of detail that we didn’t have before,” Hobelman commented. “Our overall accuracy is better, and it keeps our inventory purchases efficient and cost-effective.”
When the accounting books are closed at the end of the month, Accountant Nancy Davenport verifies that the inventory matches the records.
“Having several checks and balances within the annual physical inventory count and with daily inventory helps us keep accurate records,” said Davenport. “Dawson PPD is audited annually, and these records help that process go well. We also cycle count throughout the year on select areas to ensure that we’re on track.”
Physical Inventory Count
In the warehouse, Supervisor Joe Linn and his team begin counting materials two weeks in advance. They receive a report via email from Davenport.
“We do a preliminary count of materials to make things run smoothly the day we enter final numbers,” Linn explained. “To keep things simple, we close the warehouse during this time. That means we have to help our construction crews gather materials for work orders ahead of time and notify our distributors to not bring shipments until November 1.”
Linn, his team and the lineworkers work together to count the physical inventory from poles and crossarms to conductor and insulators. The count is documented on a paper report first, and the final number is entered into the automatic warehouse system.
“To keep things streamlined and appropriate for auditing purposes, all numbers have to be entered and sent to accounting within one day,” Linn said. “This year, we started on October 29 and had all of the numbers in by October 30.”
Back in the office, Davenport receives the final count on her computer. She verifies the count with her capture – a word used to describe the report posted in the accounting books. If any of the numbers are off, she sends the report back to the warehouse for investigation until a resolution is issued.
“It used to take me two to three days to verify the final numbers and close the books,” Davenport said. “Now, it takes one day. The automated warehouse technology has really streamlined the process and having so many employees count materials helps tremendously.”
The physical inventory count concluded on October 31. A job well done, but never complete. Like Santa, there are always lists to be made and checked twice.