a. Objectives

This document provides a step-by-step guide for physical inventories that allows us to: 

  • Verify the existence and ownership of inventories,
  • Implement and monitor continuous improvement systems and processes

 

b. Scope and effective date

This procedure applies to all Legacy Rhodia entities as well as to all Legacy Rhodia-controlled companies, and to all warehouses on site and off site.

The procedure deals with the inventory count of: 

  • 31000100 Raw material
  • 31000160 Consumable supplies inventory
  • 31000200 Raw material-industrial supplies
  • 31000300 Raw material-packing material
  • 37000100 Finished products
  • 37000200 Goods for resale
  • 37000400 Semi-finished products

The procedure is effective from the publication date.

 

c. Responsibilities

Finance responsible assigned (FRA)

  • Determines the annual schedule in conjunction with the inventory manager and ensures schedule adherence, 
  • Prepares a site inventory procedure, 
  • Validates the inventory discrepancies analyzed by the inventory manager,
  •  Prepares and sends inventory reports. 

Inventory manager or his representative (PIM)

  • Participates in the preparation of the physical inventory and in the inventory counts,
  • Analyses and justifies any significant discrepancies. 

Inventory count team 

  • Performs an accurate count in accordance with the safety rules and must be familiar with the specific counting procedures.
Responsibilities can be adapted for each plant according to the segregation of duties, but any modification should be written in a procedure.

d. Segregation of duties

Segregation of duties (SOD) reduces risk of error and fraud so that no single individual can adversely affect the accuracy and integrity of the count. 
Segregation is based on separation of the three following process 

  • Business process : Purchase/ Procurement, Shipment, Consumption in production
  • Physical custody of assets process: counting, recording of movements
  • Accounting process: invoice validation, adjustment resulting from inventory count

Respect for SOD rules means that: 

  • Personal involved in one process should not also have responsibilities in either of the other two processes.
  • No one should be in a position of self validation, cumulating execution and supervision.