2014 NPMA Spring Seminar Value Through Professional Asset Management
best practices and alternative techniques for property
inventories Al Green, CPPM CF
April 2014
2014 NPMA Spring Seminar Value Through Professional Asset Management
Opinions or Facts
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What are the best practices and alternative techniques for property inventories?
2014 NPMA Spring Seminar Value Through Professional Asset Management
Property Inventories
This session will include a discussion regarding best practices and alternative techniques for property inventories
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The primary purpose of a physical inventory is to establish a current, accurate baseline of existing assets.
2014 NPMA Spring Seminar Value Through Professional Asset Management
Property Types
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Personal
Real
Land
Property, Plant and Equipment (PP&E)
The focus of this presentation is on personal property assets
2014 NPMA Spring Seminar Value Through Professional Asset Management
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????
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2014 NPMA Spring Seminar Value Through Professional Asset Management
Examples of Personal Property Assets
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2014 NPMA Spring Seminar Value Through Professional Asset Management
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?
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2014 NPMA Spring Seminar Value Through Professional Asset Management
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
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• Lease vs. Purchase
• Missing and Stolen -Report of Survey
• Certified Recycling
• Thresholds• Depreciation• Transport,
Shipping and Maintenance
• Salvage• Warehousing• Open Storage
2014 NPMA Spring Seminar Value Through Professional Asset Management
Inventory Frequencies Impacts
• Daily• Weekly• Monthly• Quarterly• Semi-Annual• Annual• Special Inventories• FY - BOY and FY - EOY
• Transactional• Network• APP - Mobile• Smart Card
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2014 NPMA Spring Seminar Value Through Professional Asset Management
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
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2014 NPMA Spring Seminar Value Through Professional Asset Management
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
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2014 NPMA Spring Seminar Value Through Professional Asset Management
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
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2014 NPMA Spring Seminar Value Through Professional Asset Management
Concepts to Reduce Inventories
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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
2014 NPMA Spring Seminar Value Through Professional Asset Management
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.
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2014 NPMA Spring Seminar Value Through Professional Asset Management
Old Property Inventory Methods Wall-to-Wall – Closed and Open Cycle Counts - Partial Counts
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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.
2014 NPMA Spring Seminar Value Through Professional Asset Management
New Property Inventory Methods
Inventory by Exception Transaction based
Inventory Statistical Random
Sample
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2014 NPMA Spring Seminar Value Through Professional Asset Management
Ways to Count Property
Physical Count Barcodes Radio Frequency Identification Data (RFID) Based
Solution APPs – Mobile Transaction Movement – (e.g., Refueling)
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Date of Last Inventory - Inventory Note
2014 NPMA Spring Seminar Value Through Professional Asset Management
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
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2014 NPMA Spring Seminar Value Through Professional Asset Management
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
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2014 NPMA Spring Seminar Value Through Professional Asset Management
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.
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2014 NPMA Spring Seminar Value Through Professional Asset Management
Questions
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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]
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