Re- Launching Inventory- Landscape Consruction Division

This is a big complex topic! I have liked using the item code to denote items within a division/year so you can look at groups of items more easily. We also implemented the barcodes for some of our irrigation and lighting items which has helped. We put simple items that we stock into inventory but items that we purchase less frequently tend to go directly from a receipt onto a work ticket. The crew is doing well with entering their materials but it all does require some active management. 
 

We also basically ended up implementing it in sections by division or by certain kind of categories rather than all at once. It was messy for a while. Is there one particular part of it that was the biggest struggle?

We seem to end up with a bunch of extra materials and partial pallets available.We attempted to inventory left over materials. Left over materials and new stock inventories got/ getting mixed up. I think we just need to clean house, carry less inventory, never add things from jobs back into inventory. 

What are some items ya’ll chose to inventory (simple stuff) ​@mhellweg 

You have two paths.

1. When you buy materials for a job, that material goes onto a purchase receipt and that purchase receipt is connected to the appopriate ticket. Any material that is leftover is considered “surplus” and not inventory. Pro: easier on the admin side of purchasing. You aren’t relying on crews to allocate materials. Con: you don’t get super great job costing because surplus not installed on the job shouldnt really count against the job. It’s harder to figure out true installation rates and production rates. 
2. You purchase materials for a job, those materials get received into inventory. The crew leader or field manager allocates all materials that they use on the job while on site. Some companies do a paper where they fill out what they take from the yard in the morning, and the ops manager allocates it. Pro: you get much better job costing. You can see what materials you are over purchasing. You can print out inventory sheets monthly for design team members to reference when estimating. Con: More work required from field members. Can quickly get out of hand if you’re not on top of it. That inventory was previously being counted as an expense on the job and now it’s an asset on the balance sheet. 

​@swirtholg so we have things like bagged goods and bulk stone items that we have at our shop in inventory that the team allocates. I think either ways you choose from ​@Kbaird ‘s recommendations, the whole system requires some input and oversight and that probably doesn’t go away. So unless there is someone who can own it, even part time, it tends to go off the rails pretty quickly. At least from what I’ve experienced. 

But as an example some items will be purchased for a job and they will go directly on the tickets - most specifically plants and stone materials that are designed for that property. Then these other materials like the bagged goods etc. that we have in stock at the office the site supervisor allocates. 

The field supervisors are responsible for checking tickets and making sure allocations are correct. 

We also do not itemize every item that we purchase to match the job. It’s too labor intensive for us right now. Maybe that will change in the future.