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Group requirement is to provide an annual planning and communicate locally an inventory procedure and preparation.


Responsible : Physical inventory manager
Frequency : Annual with a quarterly up-date
Control : IAC.02.03 / control owner: FRA

The annual planning includes :

1. A list of the inventory storage location

  •  On site
  • Off site: inventory on consignment, held in third parties facilities or by toll manufacturers

2. Frequency of cycle counts

3. A planning taking into account the following objectives

 

  • A count of items representing 90% of the value of prior end inventory should be done as of 30th September, each year.

  • A count of items representing 100% of the value of prior end inventory should be done as of 30th November, each year.

That planning must be communicated to FRA, who could organize/support the supervision by a third party without prior notification to PIM.

Planning is proposed by PIM and validated by FRA before end of September with consideration for 2 periods :

  1.  October 1st to November 30th of current year : revision of on going calendar :
    1. Starting with actual inventory coverage rate as of October 1st (in theory 90%)
    2. Showing completion of 100% target as of November 30th
  2.  Dec 1st of current year to November 30th of following year :
    1. That planning is detailed by material code and SAP plant where applicable
    2. Where SAP isn’t available, that planning is also used to follow progress of coverage inventory count 
    3. FRA is responsible for recording that planning in the dedicated group repository and external auditor have access to that repository

Responsible : Physical inventory manager
Frequency : Annual
Control : IAC.02.03 / control owner: FRA

 

Red lines

The site procedure is updated at least once a year before September 30th  by the PIM with validation by FRA. FRA is responsible for recording that procedure in the dedicated group repository. 

 

The site procedure has to include:

  • The name of the finance responsible assigned (FRA) who is authorized to validate physical inventory discrepancies and particularities linked to the segregation of duties

  • A reference to applicable safety procedure

  • Triggering event to engage a second count : for each of the category of inventory (A31000, A34000, A37000), determination of a threshold for the value of discrepancies above which a second count must be performed. A 0.5 % threshold of the total amount of the inventory concerned is recommended, it will be applied as such if the site inventory procedure doesn’t specify otherwise.
  • Specific scenarios in which no recount is required
    • Meter readings or print in continuous production environments
    • Scenarios specific to the site's activity

 

Red lines

  •  Determination of a threshold for the value of discrepancies for one stock count or one month of cycle count above in which:
    the GCCO, the plant manager and GBU supply chain director are informed. 
    ==> Maximum threshold is 1% of the value of counted inventory
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