O-Operations: The backbone of DOSS for inventory management

Introduction

In the DOSS framework (Data, Operations, Stock & System), Operations is where strategy meets execution. Strong operational practices convert good data into dependable inventory control, reduce working capital tied up in spares, and keep production lines running. This article explains the operational pillars you must get right from a robust Goods Received Note (GRN) process to FIFO/LIFO discipline and offers practical controls, KPIs, and SEO-focused language to help your content reach the right audience.

Why Operations matter

Operations governs the daily lifecycle of materials: receiving, validating, recording, storing, issuing and reconciling. Gaps in operations cause phantom inventory, delayed GRNs, incorrect replenishment, production stoppages and inflated carrying costs. For MRO and engineering spares especially, operational excellence directly impacts uptime, procurement cycles, and total cost of ownership.

Core Operational Components

1. Strong GRN (Goods Received Note) process

A strong GRN is the gateway to accurate inventory. The GRN must capture:

• PO match (quantity, unit, supplier)

• Lot/batch/serial numbers

• Inspection status (accepted/rejected)

• Technical attributes (dimensions, material grade, part revisions)

• Date/time and receiver credentials

Best practice: Enforce GRN completion before any material is moved to “available” in the ERP. Use rule-based workflows that block posting when mandatory attributes are missing.

2. Count match between ERP and physical inventory (reconciliation)

Regular reconciliation closes the loop between system and reality. Reconcile at multiple cadences:

• Continuous cycle counting for critical SKUs

• Weekly or monthly reconciliations for high-value items

• Quarterly full physicals for site-level verification

KPI examples: % variance by value, count accuracy rate, days to reconcile discrepancy.

3. Data entry accuracy & master data governance

Operational accuracy relies on accurate storage locations, reorder point, safety stock.

Controls: mandatory fields, pick-lists, validation rules, duplicate detection, and automated alerts for anomalous entries.

4. Physical verification

Physical verification is critical to ensure that the material received exactly matches the ERP description. For example, a received bearing labeled SKF 6002-2Z must perfectly align with the ERP master data in terms of make, model, specification, and variant. Any deviation—whether in suffix, shield type, or size can lead to operational risks, incorrect stock records, and downstream failures. Zero tolerance for variance is essential to maintain data integrity, ensure reliability in operations, and prevent costly errors in inventory management.

• Source-document verification (certificates, supplier spec sheets)

• On-receipt technical inspection

• Periodic re-verification for long-shelf items

Tooling: QR/barcode/RFID tags linked to attribute records enable rapid verification at receipt and issue.

5. Maintaining FIFO, LIFO, and other issuance policies

Inventory valuation and operational life-cycle depend on consistent issuance policies:

• FIFO (First-In, First-Out): ideal for perishables and items with shelf-life or obsolescence risk.

• LIFO (Last-In, First-Out): occasionally used for cost flow purposes in accounting (note: check local accounting standards).

• FEFO (First-Expired, First-Out): critical for chemical, lubricant, and consumable management.

Operational control: physical layout and pick-path design must enforce the chosen policy; use bin-level expiry labeling and system pick rules.

6. Cycle counting, sampling & risk-based frequency

Not all SKUs need the same attention. Classify by ABC/XYZ and apply risk-based cycle counting:

• A items: daily/weekly counts

• B items: monthly

• C items: quarterly or on-demand sampling

7. System integrations and real-time updates

Operations must be tightly integrated with ERP, procurement, and maintenance systems:

• Immediate GRN posting or staged posting with approval

• API-based updates from automated scanners

• Exception workflows for rejected goods or attribute mismatches

KPI: time-to-update ERP after physical receipt.

8. Exception handling and audit trails

Define clear workflows for mismatches: hold locations, quarantine, return-to-vendor, or rework. Maintain a tamper-proof audit trail (who, what, when, why) for traceability and compliance.

9. Training, SOPs and change control

Operational consistency comes from clear Standard Operating Procedures and regular operator training. Version-controlled SOPs plus change-control processes prevent drift and undocumented workarounds.

10. Technology adoption: barcodes, RFID, mobile scanning, IoT

Invest in scanning and automation to reduce manual errors, speed GRN, and enforce FIFO. IoT sensors for temperature/humidity protect sensitive spares and enable proactive alerts.

Operations are where strategy earns its keep, precise processes turn master data into measurable uptime.

Practical checklist (operational health check quick audit)

• GRN vs PO matching enforced?

• Mandatory technical attributes for critical SKUs?

• Cycle counting schedule mapped to ABC classes?

• FIFO/LIFO rules mapped to bin locations and ERP pick logic?

• Barcode/RFID scanning in place for receipts/issues?

• Exception workflows and audit trail enabled?

Final thoughts

Operations is the action layer of the DOSS model: it enforces data quality, protects stock integrity, and ensures the ERP reflects the physical world. By tightening GRN controls, enforcing count-match discipline, validating technical attributes, and maintaining issuance policies (FIFO/LIFO/FEFO), organizations lower risk, reduce costs, and improve service levels.