Hubbell Policies

completed in January and July of each fiscal year. Management must retain the before and after ABCD stratification listings for documentation purposes. Any SAP configuration changes impacting ABCD classification must be approved by Internal Audit. • A review of the status of the cycle counts must be performed at a minimum on the last working day of each quarter to ensure that the location is current in its cycle counts. The report should not show any “overdue” counts. Management must retain evidence of the exercise performed for documentation purposes.

➢ For locations utilizing Warehouse Management (WM) functionality in SAP, utilize t-code LICC for count status.

➢ For locations utilizing Inventory Management (IM) or Lean WM (similar to IM) functionality in SAP, utilize t-code MICN.

• A review of materials that have stock, but no Cycle Count Indicator, must be performed at least quarterly. Materials without a cycle count indicator should be assigned a default of “C” until the appropriate stratification can be assigned. For new products introduced into inventory without any transactional history, a “C” indicator should be assigned . Locations should use t-code ZWM_QUANT_VALUE in SAP to monitor missing indicators.

Count Procedures

Either t-code LICC (WM) or t-code MICN (IM or Lean WM) is utilized to determine the schedule of counts to be made by the cycle counter. The counts are based on part number/location pairings (referred to as “quants” in SAP) and scheduled count dates are systematically assigned by SAP. The reports should be at least weekly, or more frequently for larger high-volume locations with rapid movement of inventory. The entire quantity of part number/location pairings (quants) selected for cycle count must be physically verified by the cycle counter by hand count or weight count. Each part number/location pairing is reported separately for accuracy purposes. If the location is using scales to determine quantities through weight counts, the accuracy of the scales should be tested periodically and recalibrated as necessary. The cycle counter must independently verify the quantity on hand without prior knowledge of the balance in the perpetual inventory records (i.e. “blind count”) . Attention to unit of measure information for each item selected for cycle count should be provided to the cycle counter to prevent errors in counts, particularly where the stocking and purchasing units of measure are different. Outside of SAP which records inventory transactions in real time, if cycle counts are conducted before all inventory transactions are normally recorded, system transactions should be researched to determine if discrepancies identified by the cycle counts are solely the result of timing. Efforts at reconciling differences of this nature may be reduced using subsequent recounts. Although plant personnel may assist the cycle counter in reconciling cycle counts and researching potential errors, the cycle counter alone must be responsible for the final determination of whether a difference in count is considered an "error .” A lack of independence in this determination will preclude reliance on the perpetual inventory Reconciliation of Cycle Counts

64