The best features of inventory control may not be what you think. This week a business owner said, "I must have a handheld device to make my drivers more productive." He was caught off-guard by my response.

What comes to mind when you consider inventory control? Are you able to define what you need for improved inventory management and control? Most business owners are able to identify features and benefits they feel are good additions to their current system. Typical questions revolve around: What are the best features of inventory control? But those are entirely the wrong questions.

The questions assume the problem can be remedied with software. In most cases, it cannot. The problem is with procedures and processes. Buying new software only masks the problem. The first question should be: Where does my process break down? What areas in the processes of managing inventory are causing the most problems? What is the best method of performing these tasks?

Once you have defined the processes and what needs to be accomplished, you are ready to develop the right solution. The following are features of inventory control that are found in robust, well-designed programs:

• Serialized Inventory: Tracking serial numbers of both rental and sale equipment is a requirement. Virtually all hard goods contain a serial number. Whether you purchase a wireless card, television, or DVD player, a serial number is listed on the item. Maintaining a record of the serial number must be quick, easy, and painless.
• Maintenance History: Keep a history of maintenance, service, and revenue for each item. Along with tracking serial numbers, this will help to identify products that are "lemons." You will also be able to capture the net income from an item.
• Calculate Depreciation: Depreciation of rental equipment lowers the book value of an item, which affects how you calculate the value of your inventory. In addition, having the current book value on hand is valuable when a patient is looking for a used item to purchase for cash.
• No Multiple Serial Numbers: The software you choose must have the ability to prevent users from placing the same serial number to multiple patients at the same time. The importance of accurate records as to where a piece of equipment is located cannot be overestimated. Don't be fooled by those who attempt to justify serial number sharing by saying: "Sometimes the equipment is actually available but we have not updated the system yet." Your internal processing for picking up equipment should not exceed the time it takes to clean the equipment.
• Real-time Inventory: A robust system is not so cumbersome that it slows down your processes. When an order is placed, your inventory must reflect that an order has been created. The best method is for your software to identify that an item has been ordered and inventory is committed.

Duane Ridenour

Your system will perform three tasks automatically: 1) provide feedback to the user that an item is or is not available; 2) indicate to the buyer that an order has been received and inventory will be depleted, if product is available; and 3) put in motion the stock replenishment process.

Performing a quantity-on-hand search will identify the number of items available, the number currently committed, and the location(s) where this item can be found. Real-time inventory must be available to customer service/intake.

• Tracking: For those who deliver oxygen, gas or liquid, tracking lot numbers and tanks keeps many warehouse managers up at night. Well-designed systems address this common problem and eliminate nightmares. Before you deliver three more cylinders to Mrs Olsen, you need to know how many she already has. An informed driver can pick up the appropriate number of empties without guessing or gradually increasing the patient's tank inventory.

Mandatory lot number tracking is quite often performed with a paper log. Labor-intensive tasks, like this one, drain the profits from any business. For those who fill their own tanks, the problem is compounded. A quality program is going to allow you to track all this information in the computer.

• Electronic Purchasing: If you are still creating purchase orders, printing them out, and faxing them, it is time for a makeover. Notwithstanding recent announcements, quality software vendors have been offering electronic POs for years. You simply set the min and max levels, and the software does the rest. Reviewing and/or editing the POs before they are sent is standard. Once that is finished, why would you want to print the PO and then fax it? At a minimum, you should be able to print from your PC without creating a paper document. The best method: send the PO electronically.

Duane Ridenour has provided training and consulting services throughout the United States. He is vice chair for the NSCAC executive committee and serves on multiple DME MAC Advisory Committees. Ridenour can be reached via e-mail: .