2014 NPMA Spring Seminar Value Through Professional Asset Management best practices and alternative...

2014 NPMA Spring Seminar Value Through Professional Asset Management

best practices and alternative techniques for property

inventories Al Green, CPPM CF

April 2014


Opinions or Facts

2

What are the best practices and alternative techniques for property inventories?


Property Inventories

This session will include a discussion regarding best practices and alternative techniques for property inventories

3

The primary purpose of a physical inventory is to establish a current, accurate baseline of existing assets.


Property Types

4

Personal

Real

Land

Property, Plant and Equipment (PP&E)

The focus of this presentation is on personal property assets


Who are your Stakeholders?

• 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

• 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????

5


Examples of Personal Property Assets

6


Breakdown Your Inventory Process

• Purchaser• Receiver• Tagger• Locator• Records Custodian• Inventory Counters• Researchers to

Resolved Errors• Certifiers• Reporters

• 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?

7


What Impacts Property Inventories

• Appropriations• Working Capital

Fund• Non-

Appropriations• Gifts - Donations

• Sale and Exchange• Transfers• Excess• Surplus• Loans• Contractors • Sub-Contractors• Grants• Cooperative

Agreements• Take-Back

Programs

8

• Lease vs. Purchase

• Missing and Stolen -Report of Survey

• Certified Recycling

• Thresholds• Depreciation• Transport,

Shipping and Maintenance

• Salvage• Warehousing• Open Storage


Inventory Frequencies Impacts

• Daily• Weekly• Monthly• Quarterly• Semi-Annual• Annual• Special Inventories• FY - BOY and FY - EOY

• Transactional• Network• APP - Mobile• Smart Card

9


Other Inventory Planning Elements 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

10


Asset Tags 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

11


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

12


Concepts to Reduce Inventories

13

Prime VendorDelivers inventory items to

the customer within hours of reviewing the order.

Integrated SupplierOne or more suppliers locate

distribution center close proximity to their customers.

Local Distribution Centers/Supplier Parks

An integrated supplier assumes total inventory management

responsibilities for a customer.

Electronic Ordering System – Supplied by Vendors

Type of Savings Estimated

Amounts

Inventory Reductions ???

Holding Cost Reductions ???

Product Cost Reductions ???

Distribution Cost Reductions ???

This table illustrates realized savings from reduced inventory levels and the associated holding and distribution costs and realized reduce product costs.

Source: Slide 17 – 3rd Bullet


Develop Efficiencies

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.

14


Old Property Inventory Methods Wall-to-Wall – Closed and Open Cycle Counts - Partial Counts

15

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.

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.


New Property Inventory Methods

Inventory by Exception Transaction based

Inventory Statistical Random

Sample

16


Ways to Count Property

Physical Count Barcodes Radio Frequency Identification Data (RFID) Based

Solution APPs – Mobile Transaction Movement – (e.g., Refueling)

17

Date of Last Inventory - Inventory Note


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/T-NSIAD-97-214, July 24, 1997

18


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

19

http://www.fau/fiscal/best-practices/OIG.pdf


Primary Objectives of Internal Control

Reliability and integrity of information. Compliance with policies, laws and regulations. Safeguarding of asset. Effective and efficient use of resources. Achievement of strategic goals.

20


Questions

21

Al Green, CFPPM CFSenior Personal Property Manager

Department of the InteriorOffice of Acquisition and Property Management

1849 C Street N.W.Mail STOP - 4262

Washington DC [email protected]

mailto:[email protected]

2014 NPMA Spring Seminar Value Through Professional Asset Management best practices and alternative...

Documents

Transcript of 2014 NPMA Spring Seminar Value Through Professional Asset Management best practices and alternative...