Principles of Inventory Control.

TM 38-400/NAVSUP PUB 572/AFMAN 23-210 MCO 4450.14/DLAM 4145.12

personal possession and are, therefore, especially

a. Number of items involved.

subject to pilferage.

b. Number of locations involved.

c. DODI 4140.35, Physical Inventory Control for

c. Manpower requirements.

DOD Supply System Material, is the basic document

d. Anticipated productivity.

DOD Components use to implement DOD inventory

e. Scheduling to obtain maximum efficiency and

policies.

accuracy.

d. DODI 4140.35 sets forth a minimum acceptable

f: Preparation of material in storage to facilitate

accuracy level for sample inventories below which a 100

inventory counting.

percent inventory must be taken.

The DOD

Components may establish a more stringent accuracy

3-34. Inventory Training.

level if deemed necessary. Only major discrepancies

With the planning factors established, actual steps to

(see glossary of terms) are used to compute accuracy.

accomplish the inventory should be outlined. Each

DOD 4140.22-M, Military Standard Transaction

individual participating in the inventory should be given

Reporting and Accounting Procedures (MILSTRAP),

a specific assignment.

Prior to starting inventory

provides direction for the statistical conduct and

actions, necessary training for all personnel involved,

reporting of results.

both military and civilian, should be completed.

e. DOD Component activities submit a quarterly

Required training should be conducted through

Report of Inventory Control Effectiveness (RCS DD-I&L

coordination of all organizational elements concerned.

(Q) 935) to the next higher headquarters. This report is

Suggested points for emphasis in the conduct of this

used to assess inventory performance.

training area.

a. Purpose of inventory.

3-32. Principles of Inventory Control.

b. Familiarization with the inventory organization

Physical inventory procedures must provide positive

and each participant's part therein.

control of "infloat" material and documentation. This

c. Importance of attaining the highest degree of

control will include material release orders, receipts,

accuracy.

adjustments, and catalog data changes.

Mutually

agreeable cutoff dates must be established between

d. A thorough orientation in

storage and accountable activities for inventory actions

(1) Recognition and recording of correct stock

that must be identifiable to ensure proper consideration

number, nomenclature, and unit of measure.

in balance reconciliations. Effective inventory control

(2) Item identification.

must also include the following:

(3) Condition

classification

such

a. Establishment of a physical inventory control

serviceable, unserviceable, or other appropriate

organization to encompass all related inventory

category.

functions.

(4) Counting techniques.

b. Establishment of training programs to develop

(5) Recognition of improper or unsafe

optimum capability for the conduct of inventory.

material storage practices.

c. Establishment and maintenance of accurate

stock location records (see sec III of this chap).

3-35. Preparation of Material for Inventory.

d. Accomplishment of all directed physical

Every effort should be made to arrange and maintain

inventories.

stored material in the best possible manner through

e. Adequate control over any movement of

application of proper storage practices. Prior to taking

material undergoing inventory.

an inventory, stocks should be-

f. Accomplishment of required research prior to

a. Properly identified and clearly marked.

processing adjustment actions.

b. Identified as a "Do Not Inventory" item, when

g. Isolation of causes of potential and actual

these items are not to be included in the inventory

discrepancies. Initiation of corrective action to prevent

count.

recurrence.

c. Stored in the minimum number of separate

locations commensurate with proper storage practices.

3-33. Inventory Planning.

d. Stored uniformly with respect to quantity per

Each physical inventory must be planned, taking into

container and containers per pallet.

consideration the following:

e. Clearly highlighted to show where conditions

other than those in d above exist.

3-28