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Inventory Management Training 2026 Page 1THE INVENTORY EDITION SETTING THE STANDARDINVENTORY MANAGEMENT TRAININGVOL. 1, NO.12026 Inventory management is more than counting product — it is the backbone of efficient operations, accurate order fulfillment, and customer satisfaction. This issue introduces the core principles, and processes that guide how inventory is received, tracked, stored, and issued across our locations. By following standardized practices, we reduce errors, improve efficiency, and ensure materials are available when and where they are needed. INVENTORY: THE FOUNDATION OF OPERATIONAL SUCCESS Accurate inventory practices support safe warehouses, efficient workflows, and reliable service for our customers. “THE RIGHT MATERIAL, IN THE RIGHT PLACE, AT THE RIGHT TIME”
PREVENTING ERRORS BEFORE THEY REACH THE PICK STAGEPREVENTING ERRORS BEFORE THEY REACH THE PICK STAGEPREVENTING ERRORS BEFORE THEY REACH THE PICK STAGETHE DAILY CHECK INVENTORY BY BIN LOCATIONBEHIND THE BINSBEHIND THE BINSBEHIND THE BINSInventory Management Training 2026 Page 2 DON’T JUST REVIEW IT- RESOLVE IT HANDLING MISC LOCATIONS RAISING THE STANDARD NOT ALL BIN LOCATIONS ARE TREATED THE SAME It’s easy to drop something into the first open spot and move on, especially when things are busy. But where you put it now matters later. Taking a moment to place an item where it actually makes sense can save someone else from having to search for it later. Not everything that comes through the door is part of our regular stock. Some items are brought in for a specific order and won’t be sticking around long. These shouldn’t get mixed in with everyday inventory. In those cases, use F (Floating) as the location type. It keeps those items separate, and once they’re gone, the location clears out on its own. It doesn’t take long for small mistakes to turn into bigger problems. An item comes in, doesn’t get a bin, and before you know it, someone’s standing there trying to find it while a customer is waiting. That’s where the daily check comes in. Running the IN-224 Inventory by Bin Location report shows you what’s in the system without a bin location. It’s a quick way to catch things that were missed before they cause issues later. Taking a few minutes to go through it each day helps keep everything where it should be and makes picking faster when it counts. Items appearing on the report without a bin location must be reviewed and addressed. Even miscellaneous and tagged items require proper evaluation and location assignment when applicable. If material remains in inventory or is physically in the building, it must have an assigned bin location. Blank locations should never be assumed acceptable. Running the report is a good start, but it doesn’t fix everything on its own. It’s easy to scroll through, see what’s missing, and move on, but those same items will still be missing a bin location if we don’t act. When something shows up without an assigned bin, take the extra step and address it right then. Identify the item, confirm what’s needed, and make sure it gets handled, so it doesn’t continue showing up on the report. The more you take care of in the moment, the less there is to deal with later. We’ve all felt it. An order comes in, the system says we have the material, but there’s no bin location listed. Now the search begins. Time is lost, other orders wait, and the customer is standing at the counter wondering what’s taking so long. Blank locations slow everything down. They turn simple picks into a hunt. They create delays at the counter and cost time in the warehouse. And most of the time, the next person is the one stuck dealing with it. If material is in the building, it needs a home. When you receive product or come across something without a location, assign one right away in Product Location Maintenance. Don’t let it sit, and don’t assume someone else will take care of it. Fixing it in the moment keeps orders moving, cuts down on frustration, and makes the whole shift run smoother. It’s a small step that makes a big difference. REVIEW THE REPORT. CLEAR THE LIST. MOVE ON
It starts with a simple pick ticket at the counter. The order prints, the item shows on hand, but there’s no bin location listed. Instead of pulling the material right away, the counterperson has to step into the warehouse and ask for help. Now the warehouse team stops what they’re doing, whether receiving, putting away stock, or pulling another order to track down one item. “I think we set it over here.” “Maybe it came in last week?” A few minutes turn into ten. The counter waits. The customer waits. Productivity on both sides slows down. Nothing was technically wrong with the inventory. The material was in the building. The only problem? It was never given a proper location. When items aren’t assigned a bin immediately, the warehouse and counter overlap in ways that create setbacks. One missing location can pull multiple people off task and slow down the whole day. It doesn’t have to happen. When product is received or discovered without a bin, assigning the location right away prevents the search later. A few extra minutes upfront saves time for everyone down the line and keeps both the counter and warehouse focused on serving the next order, not hunting for the last one. TOP STORIES INVENTORY BY BIN LOCATION REVIEW REVEALS COMMON ISSUEINVENTORY BY BIN LOCATION REVIEW REVEALS COMMON ISSUEINVENTORY BY BIN LOCATION REVIEW REVEALS COMMON ISSUEInventory Management Training 2026 Page 3 The Pick Ticket that Slowed Everything Down Why These Stories Matter Accurate inventory isn’t just about quantities, it’s about location. When bin locations aren’t updated, items may show available in the system but can’t be found when needed, leading to picking slowdowns and order holds. These stories highlight why regular Inventory by Bin Location reviews matter: they help catch issues early, reduce rework, and keep orders moving without interruption. Confidence Lost at the Counter A recent situation highlighted the impact of inaccurate bin locations. The system showed the material was in stock and assigned to a specific bin. Based on that information, the customer was told the item was available. However, when the warehouse team went to pull it, the assigned bin was empty. Time was spent checking surrounding areas and reviewing recent movement. The item was eventually located in a different bin because it had been moved, but the system was never updated to reflect the change. By that point, the customer had already been told the material was unavailable and left dissatisfied. While the inventory was technically in the building, the mismatch between the physical location and the system created confusion, wasted time, and impacted the customer experience. Accurate bin maintenance is critical. When product is moved, the system must be updated immediately. Keeping the shelf and the system aligned ensures we can stand behind what we tell our customers and DELIVER WITH CONFIDENCE!
WHERE INVENTORY IS SUPPOSED TO LIVE AN INVENTORY MAPAN INVENTORY MAPAN INVENTORY MAPInventory Management Training 2026 Page 4 Bin locations define where inventory lives day to day. When items have on-hand quantities but no assigned bin, inventory can appear available in the system while remaining difficult to locate on the warehouse floor. Making the Right Inventory Decision, Ask Yourself: Does this match what I see on the floor? If it hasn’t been physically verified, it’s information, not truth Is this a location problem or quantity problem? Moving inventory won’t fix a bad count, and changing a count won’t fix a bad location Is this product supposed to live in this bin? Temporary locations, staging areas, and overflow bins tell a different story than primary bins What was the last activity on this item? Recent receipts, picks, or transfers often explain what looks wrong in the first place If I change this, what should happen next? Every adjustment creates a ripple, make sure it’s the one you intend WHY THIS DECISION PATH MATTERS Location accuracy isn’t about fixing what looks wrong, it’s about understanding why it looks wrong before making a change. This decision path helps prevent quick adjustments that hide problems instead of solving them. By slowing down, verifying the floor, and choosing the right action, inventory stays aligned, errors don’t compound, and the system remains a reliable reflection of the warehouse, not a patchwork of guesses. When we address issues right away and communicate clearly, the system stays aligned and the warehouse stays in control. CoCCOMMON MISSTEPS Leaving inventory spread across bins “because it’s close enough” Adjusting inventory without understanding what caused the discrepancy Assuming someone else will fix the problem Walking past known issues instead of correcting them Changing the system without checking the floor Adjusting inventory based on assumption instead of verification
PRODUCT LOCATION MAINTENANCEWHERE THE SYSTEM MEETS THE SHELFWHERE THE SYSTEM MEETS THE SHELFWHERE THE SYSTEM MEETS THE SHELFInventory Management Training 2026 Page 5 PRODUCT LOCATION MAINTENANCE KEEPS SYSTEM RECORDS ALIGNED WITH WHERE INVENTORY ACTUALLY SITS IN THE WAREHOUSE. INVENTORY INQUIRY VS. PRODUCT LOCATION MAINTENANCE DEFINING WHERE INVENTORY LIVES Not all locations are the same. A primary location is where an item is meant to live. Secondary locations are extra space when you have more than fits in one spot. Floating locations are temporary and drop off once the quantity is gone. When locations aren’t kept up, things get messy fast. Items end up in the wrong place, locations get left blank, and picking turns into guesswork. Product Location Maintenance doesn’t change how much you have; it just shows where it is. Keeping it accurate makes it easier to trust what you see and find what you need. UNDERSTANDING PRODUCT TYPES Product types define how inventory exists in the system and determine the material’s status. They establish whether an item is sellable, committed, under review, defective, or pending action. While many items are standard stock, others are assigned a different type based on condition, purpose, or ownership. The most common location types include:S (Stock): Sellable inventory in good condition F (Defective): Unsellable material O (Overshipment): Extra material pending purchasing review R (Review): Material awaiting condition review L (Display): Showroom or display inventory T (Tagged): Inventory committed to a specif ic customer C (Customer Consignment): Material stored at a customer site Inventory Inquiry and Product Location Maintenance serve different but equally important roles. Inventory Inquiry shows what is available to sell. It calculates availability by taking on-hand quantity and subtracting open commitments, transfers, and purchase orders. It answers the question: Can we sell this right now? If availability is zero, the material may still be in the building, but it is already committed. Product Location Maintenance shows the full inventory picture. It breaks inventory down by bin location and by type, including stock, tagged, defective, and review material. It shows what physically exists and where it lives in the warehouse. The distinction matters. You may see a quantity in Product Location Maintenance that does not appear in Inventory Inquiry because it is committed or not sellable. Conversely, Inventory Inquiry may show availability, but if bin locations are not maintained accurately, finding the product can still create delays. Inventory Inquiry protects selling accuracy. Product Location Maintenance protects warehouse accuracy. When both are aligned, the system reflects reality. Supporting accurate selling at the counter and efficient picking on the warehouse floor.
TOP STORIESWHAT PRODUCT LOCATION MAINTENANCE REVEALEDWHAT PRODUCT LOCATION MAINTENANCE REVEALEDWHAT PRODUCT LOCATION MAINTENANCE REVEALEDInventory Management Training 2026 Page 6 When Product Location Maintenance Told a Different Story Than Inventory Inquiry At one branch, staff checked Inventory Inquiry after a customer requested material and saw little to no available quantity. Based on what the screen displayed, it appeared the products were unavailable for sale. However, when the team went to the aisle, they found multiple units physically sitting on the shelf. A review of Product Location Maintenance revealed that the material had been assigned to location types such as Review, Tagged, or Display. Although the inventory was physically in the building, those classifications prevented it from appearing as available for sale. Once staff looked beyond availability and reviewed the location types, the confusion was resolved. The inventory existed physically, but its classification restricted it from being sold until the location assignment was corrected. The situation reinforced an important lesson: Inventory Inquiry shows what can be sold, while Product Location Maintenance shows what physically exists and how it is classified. Understanding the difference prevented unnecessary searching for a problem that didn't actually exist. How a Full Shelf and an Empty System Shook Customer Confidence A customer requested a specific quantity of product. Inventory Inquiry showed that the full amount was not available, and the customer was initially told the order could not be fulfilled. However, when staff checked the shelf, the full quantity was physically present. A deeper review revealed that the material had previously been placed in a Review (R) location while its condition was being evaluated. After the review was completed, the product was returned to the shelf, but the location type was never updated. Because the inventory was still classified as Review inventory, it did not appear as available for sale even though it was physically sitting in its normal shelf location. Once the location assignment was corrected, the inventory immediately became available and the customer's order could be fulfilled. Although the issue was quickly resolved, the initial message created hesitation. The customer questioned the reliability of the inventory information before the situation was clarified. The lesson was clear: when inventory classifications and physical locations are out of sync, customer confidence can be impacted even when the product is actually there.
ACCURACY WHERE IT COUNTSENSURING ACCURATE INVENTORY ON THEENSURING ACCURATE INVENTORY ON THE WAREHOUSE FLOORWAREHOUSE FLOOR ENSURING ACCURATE INVENTORY ON THE WAREHOUSE FLOORInventory Management Training 2026 Page 7 Product Location Maintenance is what keeps the system lined up with what’s actually on the floor. When inventory is moved, split, or reclassified, the system needs to reflect where it lives now. Keeping locations accurate makes picking faster, counts easier, and helps avoid delays at the counter. The questions below help you decide when and how to make changes so everything stays in sync. Making the Right Inventory Decision, Ask Yourself: What physically happened to this product? Every system change must reflect a real movement, split, or status change on the warehouse floor Is this a location issue or a quantity issue? Product Location Maintenance redistributes quantity; it does NOT change totals Am I choosing the correct type and status? The type and status define how the item is treated in the system If I add a location, where is the quantity coming from? Adding a location means redistributing quantity, not changing totals Does the quantity in Eclipse match what’s physically in the bin? If Eclipse says it’s there, the next person must be able to count it there CoC COMMON MISSTEPS Updating quantities when only the bin location needs to change Moving inventory physically without making a system change Creating new locations without reallocating quantity from an existing one Leaving outdated or empty locations active in the system Setting a primary bin when the item should be limited by its type or status WHY THESE QUESTIONS MATTER Asking these questions before making a location change ensures the system reflects what is physically happening in the warehouse. When updates are made thoughtfully and accurately, picking is faster, counts are cleaner, and inventory questions at the counter are resolved without unnecessary searching or follow-up. Intentional use of Product Location Maintenance keeps inventory accurate, controlled, and audit-ready. Most inventory issues don’t start as major errors; they grow when small updates are skipped or handled inconsistently.
MORE THAN A COUNTInventory Management Training 2026 Page 8 WHY CYCLE COUNTS MATTER Cycle counts help catch problems before they slow you down. Instead of finding issues when a customer is waiting or during inventory, you catch them when they are easier to fix. When inventory is off, it creates extra work, delays orders, and leads to frustration at the counter and in the warehouse. Cycle counts give you a chance to stay ahead of those problems instead of reacting to them later. They are not just about fixing numbers. They help you find what is actually going wrong, like misplaced material, receiving mistakes, or items not being where they should be. Fixing those issues now means fewer repeat problems, less time spent searching, and a smoother day for everyone. WHAT A CYCLE COUNT IS REALLY CHECKING A cycle count verifies two things: quantity and location accuracy. It confirms that inventory exists where the system says it does and in the amount the system shows. When done consistently, cycle counting improves picking accuracy, reduces last-minute fixes, and keeps orders moving without delays. Over time, small corrections prevent larger operational issues. NOT EVERY COUNT IS THE SAME The cycle count schedule is set up with different types of counts, and each one has a job to do. A full building location audit works through the entire warehouse, making sure everything has been reviewed so you can trust what is on the shelf and in the system. T350 counts focus on the highest-dollar items to make sure nothing costly slips through the cracks. General cycle counts help keep inventory from drifting over time. Wire and pipe counts focus on items that get handled often, especially material that gets cut and split, where mistakes are more likely to happen. When every count is treated the same, the purpose gets lost. Knowing what you are counting and why matters just as much as doing the count itself. When each type of count is done with that in mind, you can move through the warehouse with confidence, knowing things are where they should be and ready when you need them, saving time and avoiding headaches later. PROTECTING ACCURACY THROUGH PROACTIVE COUNTINGPROTECTING ACCURACY THROUGH PROACTIVE COUNTINGPROTECTING ACCURACY THROUGH PROACTIVE COUNTING
TOP STORIESInventory Management Training 2026 Page 9 WHAT A ROUTINE CYCLE COUNT REVEALED WHEN AN ADJUSTMENT WASN’T THE ANSWER WHY THESE STORIES MATTER WHY COUNTING COMES BEFORE CORRECTINGWHY COUNTING COMES BEFORE CORRECTINGWHY COUNTING COMES BEFORE CORRECTING During a routine cycle count, a quantity difference showed up on a common item. The system did not match what was on the shelf, and it looked like an adjustment was needed. Instead of confirming it right away, the team stopped and checked what was going on. They reviewed recent activity and found an open transfer that had already arrived but had not been fully received in the system yet. Because of that, the system count was behind what was actually on the shelf, even though the material was physically there. Rather than forcing an adjustment, they waited and let the process catch up. Once the transfer was received and posted, the system updated and matched the physical count. Cycle counting is about more than finding differences. It helps teams understand why a difference exits before making a change, leading to better decisions and more accurate inventory. These stories highlight why verification matters. Adjustments impact the system immediately, and acting too quickly can create errors that weren’t there to begin with. Taking time to confirm the cause keeps inventory accurate and prevents unnecessary rework. During another cycle count, quantities did not match what was displayed in the app. The difference suggested that an adjustment might be necessary. Before confirming the count, the counter reviewed the item’s location types. Tagged and review quantities were verified first before counting available stock. Once those were confirmed, it became clear the variance was tied to a recent sales order. The order had already been processed in the system and reduced available quantity, but the material had not yet been pulled from the shelf. Rather than immediately creating an adjustment, the item was held for review and escalated to the branch manager. After verifying the activity and confirming the cause, the discrepancy resolved without changing inventory. Within the Cycle Count App, the history ledger can be reviewed to help identify situations like this before confirming a variance. The situation reinforced a core principle of cycle counting: adjustments are the result of verified causes, not the first response to uncertainty. VERIFY FIRST. CORRECT SECOND. No adjustment was needed.
LOCATION ACCURACY IN PRACTICEInventory Management Training 2026 Page 10 WHERE ACCURACY BEGINSWHERE ACCURACY BEGINSWHERE ACCURACY BEGINS Cycle counts are the foundation of location accuracy. Before any adjustment is made, the system depends on what’s actually on the shelf and where it’s stored. Asking the right questions and following the right steps helps fix problems instead of creating new ones. The Questions that Protect Inventory Accuracy: Am I physically at the correct bin? Count what’s on the shelf, not what you expect to see Have all locations for this item been counted? Primary, secondary, and temporary bins all matter Does this quantity make sense based on recent activity? Pause on anything that looks unusual Do tagged quantities (F,R,T) match whats there? Tagged inventory must be verified first Should this be confirmed or held for review? If you’re unsure, don’t force it CoC COMMON MISSTEPS Counting from memory instead of the shelf Only counting the primary bin Ignoring tagged inventory Forcing adjustments to “clear” the system Adjusting inventory before checking all locations WHY THESE QUESTIONS MATTER Cycle counts are designed to follow a specific order: verify the shelf, confirm all locations, review tagged inventory, and only then make adjustments. Skipping steps may feel faster, but it creates inaccurate on-hand quantities, misplaced inventory, and customer issues later. Following the decision path ensures corrections are based on what was physically confirmed— not assumptions.
Not every leftover piece of wire becomes scrap. Before removing material from inventory, determine whether any portion can still be sold. Saleable remnants should remain in inventory, while only the unsellable portion is removed. When wire is no longer sellable, it is adjusted out using the Scrap adjustment type. The adjustment should document whether the material is being discarded or sold to a scrapyard. If the material is sold, the amount received should also be recorded as part of the adjustment process. SCRAP, WIRE SCRAP, END OF REELInventory Management Training 2026 Page 11 MANAGING INVENTORY AT THE END OF IT’S LIFEMANAGING INVENTORY AT THE END OF IT’S LIFEMANAGING INVENTORY AT THE END OF IT’S LIFE Not all inventory is able to stay in stock forever. Scrap exists to account for material that is no longer sellable due to damage, deterioration, or other conditions that prevent it from being sold. Identifying scrap correctly ensure inventory records remain accurate and prevents unusable material from lingering in sellable locations. WHAT “SCRAP” REALLY MEANS Scrap is material that can no longer be sold and must be removed from inventory. This includes damaged material, unusable wire, non-saleable remnants that will be discarded or sold to a scrapyard, and items that simply aren't worth the time and cost required to return to a vendor. When material is scrapped, an inventory adjustment is created using the Scrap header comment. Documentation should indicate whether the material is being discarded or sent to a scrapyard. If scrap is sold, the payment information must also be recorded. HOW WIRE SCRAP IS HANDLED Wire scrap may seem like a small cleanup step, but it has a direct impact on how the branch operates. When scrap is not handled correctly, material can appear available when it is not, leading to delays at the counter and time lost in the warehouse searching for product. It can also result in missed or untracked dollars when scrap value is not recorded. Handling it the right way keeps inventory aligned with what is physically on the shelf, helps the counter rely on accurate availability, and ensures the branch captures the full value of the material. WHY THIS MATTERS END-OF-REEL Every time a wire reel is changed out, it's worth taking a quick look at what's actually left on it. The remaining footage is compared to what the system says should be there, helping identify any differences before the reel is removed from service. Not every reel at the end of its life becomes scrap. In many cases, there is still usable wire left that can continue to be sold. If the system shows more footage than is actually on the reel, the missing footage is adjusted using an End-of- Reel adjustment. If part of the remaining wire is no longer sellable, only that portion is handled as Scrap. A simple review during each reel changeout helps keep inventory accurate without throwing away good material. The goal is to keep what can still be sold, adjust what is missing, and remove only what is truly no longer usable. NOTE: An End-of-Reel adjustment is used whenever a reel is changed out. During the reel change, verify the remaining footage and adjust any shortage as needed. Scrap should be used only for material that is damaged, unusable, or otherwise no longer sellable.
TOP STORIESInventory Management Training 2026 Page 12 AFTER THE SALE IS NO LONGER POSSIBLEAFTER THE SALE IS NO LONGER POSSIBLEAFTER THE SALE IS NO LONGER POSSIBLE HOW AN END-OF-REEL ADJUSTMENT CLEARED UP A DISCREPANCY A recent reel changeout uncovered a small inventory discrepancy. Before removing the reel, the remaining footage was reviewed and compared to the quantity shown in the system. At first glance, the numbers didn't match. A closer look revealed what was happening. There was still sellable wire remaining on the reel, but the system reflected more footage than was actually there. Instead of removing the entire reel from inventory, the team took the time to identify the sellable remnant and verify the actual quantity on hand. Once the review was complete, the missing footage was adjusted using an End-of-Reel adjustment, while the sellable wire remained available for future sales. The result was accurate inventory, a usable remnant that stayed in stock, and a discrepancy that was resolved without throwing away good material. It's a simple example of why the end-of-reel process matters. By reviewing reels during changeouts and adjusting only the shortage, branches can maintain accurate inventory while preserving product that still has value. A routine inventory review uncovered several items that were still sitting in sellable locations even though they could no longer be used. The material had already been set aside after damage was found, but since it was never formally identified as scrap, it continued to show as available in the system. Because of that, time was spent looking for product that was not actually available. Once the items were properly scrapped, the locations were cleared and the system matched what was physically there. Situations like this are easy to overlook. When scrap is not identified right away, it creates confusion, wastes time, and makes it harder to trust what is in the system. WHEN SCRAP WASN’T IDENTIFIED RIGHT AWAY REDUCING SCRAP AT THE RACK An order came in for 97 feet of wire. Before cutting from a full reel, the location assigned to fulfill the order was checked for any existing remnants of that wire. A 100-foot section from a previous cut was already available. Instead of cutting from a full reel, that piece was used to fill the order. The 97 feet was pulled from the existing section, leaving a remaining 3 feet that was no longer usable and was scrapped. If the rack had not been checked, a new cut would have been made from a full reel, creating another partial and leaving the original 100 foot piece untouched. Over time, situations like this can lead to multiple leftover pieces building up in the same location. By using what was already available, the number of partials was reduced and the amount of scrap was kept to a minimum. Checking the rack first helps keep locations clean, prevents unnecessary cuts from full reels, and makes sure existing material is used before creating more leftover pieces.
SCRAP & END-OF-REEL HANDLINGInventory Management Training 2026 Page 13 ACCURATE REMOVAL OF UNSELLABLE MATERIALACCURATE REMOVAL OF UNSELLABLE MATERIALACCURATE REMOVAL OF UNSELLABLE MATERIAL Scrap and End-of-Reel adjustments are used for different reasons, but both require the same goal: keeping inventory accurate while removing only what should no longer be available for sale. Before creating an adjustment, take a moment to verify what is physically present, what remains sellable, and which adjustment type best matches the situation. The questions below help guide that decision and ensure inventory records accurately reflect reality. The Questions that Drive the Adjustment: Why is this material being adjusted out? The reason determines the correct process and documentation How much of this material is actually unsellable? Only the unsellable portion should be removed from inventory Was the scrap or footage physically verified before adjusting? Adjustments must be based on what is physically confirmed Is any portion still sellable or reusable? Shorts or remants may still be valid stock Is the correct adjustment type selected? Scrap and End-of-Reel adjustments are tracked differently CoC COMMON MISSTEPS Scrapping material that could still be sold Adjusting the full reel instead of the shortage Using the wrong adjustment header type Failing to record proceeds from scrap sales Using adjustments to quickly “clean up” inventory instead of handling correctly WHY THESE QUESTIONS MATTER Scrap and end-of-reel adjustments immediately remove inventory from the system, which makes accuracy and documentation critical. Following the correct decision path ensures only truly unsellable material is adjusted, quantities are accurate, and financial impact is properly tracked. Skipping steps can result in overstated losses, audit issues, and unnecessary write-offs.
Inventory discrepancies do not usually start at the counter, they often begin with small differences between what was physically moved and what was recorded in the system. Material may be pulled from an unscheduled location, moved without being updated correctly, or removed from inventory differently than it was physically handled. When this happens, inventory can appear available in one location while showing a shortage in another. In many cases, the product is still in the branch, but the inventory record no longer reflects where it actually is. That is why negative on-hand inventory should be reviewed regularly. Taking the time to investigate the cause helps ensure inventory is corrected accurately. Negative on-hand inventory often begins when material is not scheduled from the location where it will actually be picked. When inventory is pulled from a different location than the one assigned to the order, the system removes inventory from the scheduled location rather than the location that was physically pulled. Over time, this can create inaccurate location balances and make inventory appear available where it is not. Using the correct location during scheduling and picking helps keep inventory aligned with what is physically on the shelf and reduces the need for later corrections. NEGATIVE ON-HAND INVENTORYInventory Management Training 2026 Page 14 WHERE ACCURACY BREAKS DOWNWHERE ACCURACY BREAKS DOWNWHERE ACCURACY BREAKS DOWN REVIEW INVENTORY ACTIVITY BEFORE ADJUSTING Inventory adjustments should not be entered until inventory activity has been reviewed. Open orders, transfers, receipts, returns, and future transactions can all affect available inventory. Adjusting inventory before reviewing related activity can create additional discrepancies and may result in inaccurate on-hand balances. Taking time to review the inventory history and future ledger helps ensure adjustments are based on the complete picture. A careful review before making adjustments improves inventory accuracy and reduces unnecessary corrections. WHY SCHEDULING FROM THE CORRECT LOCATION MATTERS WHEN MATERIAL IS TAKEN FROM THE WRONG LOCATION Negative on-hand inventory can occur for a number of reasons. One situation that comes up in the branch is when material is pulled from a different location than the one listed on the order. While the product is still physically in the branch, the system removes inventory from the primary location, not where the material was pulled. This creates a gap where one location may show negative on-hand while another holds excess quantity. Over time, these differences build and make it harder to rely on what the system shows. Pulling from the correct location, or updating the system to reflect where material was actually taken from, helps keep inventory aligned with what is on the shelf.
TOP STORIESInventory Management Training 2026 Page 15 WHAT NEGATIVE ON-HAND INVENTORY REVEALEDWHAT NEGATIVE ON-HAND INVENTORY REVEALEDWHAT NEGATIVE ON-HAND INVENTORY REVEALED WHEN A RETURN WAS STARTED BUT NEVER FINISHED A customer returned material that could not be resold. The branch created a Return PO so the material could be sent back to the vendor and removed it from the shelf. The return shipment was completed, but the Return Sales Order was never processed. Because the inventory transaction was incomplete, the system continued to show inventory that was no longer physically in the branch. The issue was not discovered until the negative on hand report was run. A review of Product Location Maintenance showed a tag ID to an open Return Sales Order that had not completed bringing the product into inventory. Once the return process was finished correctly, the inventory records reflected the actual quantity on hand. This example highlights why every step of the return process matters. When a Return PO is created without processing the related Return Sales Order, inventory is removed from the system, without any quantities originally being available to ship back to the vendor. WHAT THE WEEKLY REVIEW CAUGHT By the end of the week, nothing seemed unusual. Orders had shipped, stock had been received, and day-to-day activity had continued as normal. Then the negative on-hand report was reviewed. Several items appeared on the report, prompting a closer look at recent inventory activity. The review showed that inventory records did not match what was physically on the shelf. Further investigation revealed that material had been pulled from a different location than the one expected by the system. The material was not missing at all. The review uncovered differences between where inventory was physically located and the quantities available in those locations compared to what the system reflected. Once the locations and quantities were reviewed and corrected, inventory records once again matched what was on the shelf. That is exactly why negative on-hand reviews matter. They help uncover small location discrepancies early, before they become larger inventory problems.
NEGATIVE ON-HAND INVENTORYInventory Management Training 2026 Page 16 WHERE ACCURACY BREAKS DOWNWHERE ACCURACY BREAKS DOWNWHERE ACCURACY BREAKS DOWN Negative on-hand inventory occurs when the system shows less than zero available for an item. While this can appear sudden, it is usually the result of timing, movement, or tracking issues rather than missing product. The review process below helps identify what caused the issue and how to correct it. Taking the time to understand what actually happened helps restore inventory accuracy and prevents repeated service disruptions at the counter. The Questions that Drive the Review: Why did this item go negative? Recent sales, transfers, wire cuts, or adjustments may not yet be reflected in the system Does the material physically exist in the branch? Many negative on-hands are caused by location gaps, not missing product Was the material pulled from a different location or reel? Pulling from a different location than expected can cause counts to fall out of alignment Was this taken from a cut piece or a full reel? Split reels and shorts need to be tracked correctly to prevent incorrect deductions Has the system been updated to match what actually happened? Inventory should reflect where the material was actually taken from CoC COMMON MISSTEPS Assuming negative on-hand means the product is missing Correcting quantities without checking physical stock Ignoring wire remnants or split reels Adjusting inventory without understanding the cause Treating repeated negative on-hands as isolated issues Processing a return PO without processing the Sales Order return WHY THESE QUESTIONS MATTER Negative on-hand inventory affects more than just counts. It impacts order flow, picking efficiency, and the customer experience at the counter. When system availability does not match what is physically on the shelf, orders slow down and staff spend extra time searching or rechecking material. Following the review process helps ensure inventory is corrected based on what actually happened, not assumptions. This prevents repeat issues, keeps availability accurate, and helps orders move without unnecessary delays.
Line-item comments remove much of the back- and-forth used to resolve disputed transfers. Building this habit keeps communication clear, reduces delays, and keeps inventory aligned across the branch.WHAT THESE DISPUTES ACTUALLY LOOK LIKENot every issue is the same, but most fall into a few familiar patterns A transfer comes in. The system shows one thing, but the pallet tells a different story. It happens more often than it should: wrong product, extra material, less material, or something missing entirely. At first, it looks like a simple mismatch. But without clear documentation, it turns into confusion between branches, delays in resolution, and extra follow-up that slows everything down. This is where line item comments make the difference. They connect what happened on the floor to what shows in the system. BEHIND THE TRANSFER WHEN TRANSFERS DON’T MATCH BONUS FEATUREInventory Management Training 2026 Page 17 WRONG PRODUCT ARRIVES MORE THAN EXPECTED LESS THAN EXPECTED What was expected isn’t what showed up. Extra material appears with no explanation. The transfer says it’s there but the quantity counted says otherwise WHY COMMENTS CHANGE EVERYTHINGWithout a clear comment, the next step breaks down. Someone else has to stop, dig into it, and figure out what happened after the fact. Time is lost, communication gets messy, and the issue travels further than it should. A simple line item comment fixes that in the moment. It explains the discrepancy, keeps both branches aligned, and prevents the back-and-forth that slows everything down. RAISING THE STANDARDWe’ve all seen it, something gets received, it’s not quite right, and no one is sure what happened. Now the next person owns the problem. Taking a few extra seconds to document it clearly keeps the issue contained, the system accurate, and the operation moving. WHY THIS MATTERS