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What is Inventory Rollback? Everything you Need to Know in 2024

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In this article, we will explore what inventory rollback is and why it occurs. We will also share our rollback process and apply it to an example. Read on to learn more.

inventory rollback
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What is Inventory Rollback?

Inventory rollback is the process of reverting inventory data to a previous state to correct errors, reconcile discrepancies, or address issues in inventory management.

Example: TechWorld Electronics employed inventory rollback to rectify a data entry error that had inaccurately inflated their smartphone inventory from 100 to 150 units to ensure precise stock levels.

Why does Inventory Rollback Occur?

Inventory rollback occurs for various reasons. Here are some common instances when it might be necessary:

1. Data Entry Errors: 

Human errors during data entry can lead to inaccuracies in inventory records. Incorrect quantities, prices, or product descriptions may require a rollback to correct these errors.

2. Technical Glitches: 

Software bugs, system crashes, or technical issues within the inventory management system can cause discrepancies in inventory data. Rolling back to a previous state can help resolve these problems.

3. Reconciliation Discrepancies: 

During periodic inventory reconciliation or audits, discrepancies may be discovered between the physical inventory and the recorded inventory levels. Rolling back to a known good state can help identify and rectify the source of these discrepancies.

4. Fraud or Theft: 

In cases of theft or fraudulent activities, perpetrators may manipulate inventory records to conceal their actions. Inventory rollback can help uncover discrepancies and restore accurate records.

5. Compliance Requirements: 

Some industries or regulatory bodies require businesses to maintain accurate historical inventory records for compliance purposes. Inventory rollback may be necessary to comply with these requirements or to address audit findings.

6. Supplier or Vendor Errors: 

Inaccurate shipments, missing deliveries, or errors made by suppliers or vendors can affect inventory levels. Rollbacks may be needed to correct these issues.

7. Unexpected Events: 

Natural disasters, fires, or other unexpected events that disrupt normal operations can lead to data loss or discrepancies in inventory records, necessitating a rollback to recover or restore data.

what is the inventory rollback
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9-Step Inventory Rollback Process

The inventory rollback process can vary depending on your specific inventory management system or software. However, below we have listed our general 9-step rollback process:

1. Backup the Current Inventory Data:

Create a backup of your current inventory data to safeguard against data loss during the rollback process. For instance, before making changes, export all product information, quantities, and locations into a separate file or database.

Example: Before initiating the rollback, export the current inventory data into a file named "inventory_backup_2023-10-04.csv," containing product names, quantities, and locations.

2. Identify the Need for Rollback:

Determine the reason for the rollback, such as identifying a batch of incorrectly entered product quantities. Understanding the cause, like a data entry error helps plan the rollback strategy effectively.

Example: The need for rollback arises due to an erroneous data entry, where 100 units of "Product A" were mistakenly recorded as 10 units.

3. Access Historical Data:

Locate historical inventory data or backups that reflect the desired inventory state. This may involve accessing database snapshots, log files, or version control system archives.

Example: Retrieve the inventory snapshot from last week, where the quantities of all products were correctly recorded.

4. Restore the Historical Data:

Replace the current inventory data with the identified historical data. This is often done by importing the historical records into the inventory management system while ensuring data accuracy.

Example: Replace the current inventory quantities with the data from the snapshot, setting "Product A" to 100 units as it was a week ago.

5. Verification and Testing:

After the rollback, verify the accuracy of inventory data through tests and checks. Confirm that inventory levels match the desired state to ensure the rollback's success.

Example: Count the physical stock of "Product A" to ensure it indeed matches the system's reported quantity of 100 units.

6. Documentation:

Document the entire rollback process, including the reason, date, data source used, and any issues encountered. This documentation assists in auditing and maintaining a record of inventory activities.

Example: Create a detailed report summarizing the rollback process, listing the steps taken, and any deviations from the standard procedure.

7. Communication:

If the rollback affects multiple stakeholders or departments, communicate the changes and reasons to ensure everyone is aware of the adjustments made to the inventory records.

Example: Notify the warehouse team and accounting department about the inventory rollback and its implications on order fulfillment and financial reporting.

8. Prevention and Corrective Actions:

Implement measures to prevent the issue leading to the rollback from recurring. This may involve improving data entry controls, system stability, or reconciliation processes.

Example: Enforce double-checks for data entry personnel and implement real-time validation to prevent future data entry errors.

9. Regular Monitoring:

Continuously monitor inventory data for accuracy, reviewing and reconciling records periodically to detect discrepancies early and prevent the need for future rollbacks.

Example: Set up a weekly inventory reconciliation process to catch any inconsistencies before they become significant issues.

what is inventory rollback
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Example

Let's implement our 9-step inventory rollback process to address the issue at Gadget Warehouse, a mobile phone retailer. An employee's data entry error during the Superphone Z receiving process resulted in an unintended surplus of 90 units and the potential for stockouts.

1. Backup the Current Inventory Data (Gadget Warehouse):

Before addressing the issue with Superphone Z, Gadget Warehouse should create a backup of its current inventory data. This ensures that the existing inventory records are preserved in case anything goes wrong during the rollback.

Example: Create a backup file named "GW_Inventory_Backup_2023-10-04.csv" containing all mobile phone products and their quantities, including the erroneous entry for "Superphone Z" (100 units).

2. Identify the Need for Rollback (Gadget Warehouse):

Upon discovering the data entry error, Gadget Warehouse should identify the root cause, which is the accidental entry of 100 units of Superphone Z instead of 10. Understanding this reason is critical to planning the rollback effectively.

Example: The need for rollback arises due to a data entry error, where an employee mistakenly recorded receiving 100 units of "Superphone Z" instead of 10 units.

3. Access Historical Data (Gadget Warehouse):

Gadget Warehouse needs to access historical inventory data or backups that reflect the correct inventory state before the error occurred. This could involve retrieving data from a previous day's inventory snapshot.

Example: Retrieve the inventory snapshot from the day before the data entry error, which correctly listed "Superphone Z" at 10 units.

4. Restore the Historical Data (Gadget Warehouse):

Replace the current erroneous inventory data with the historical data. In this case, set the correct quantity of "Superphone Z" to 10 units to effectively roll back the erroneous entry.

Example: Replace the current quantity of "Superphone Z" with the historical data, changing it from 100 units to the correct 10 units.

5. Verification and Testing (Gadget Warehouse):

After the rollback, Gadget Warehouse should verify the accuracy of the inventory data. In this case, they should check that "Superphone Z" now correctly reflects 10 units.

Example: Physically count the stock of "Superphone Z" to confirm that it matches the system's reported quantity of 10 units.

6. Documentation (Gadget Warehouse):

Document the entire rollback process, including the reason (data entry error), date and time of the rollback, the data source used (previous day's snapshot) and any challenges faced during the process.

Example: Create a detailed report summarizing the rollback process, noting the correction of the "Superphone Z" quantity from 100 to 10 units.

7. Communication (Gadget Warehouse):

If the rollback impacts other departments or stakeholders, Gadget Warehouse should communicate the changes, and reasons behind the rollback. This ensures that everyone is aware of the adjustments made to the inventory records and the potential impact on sales and orders.

Example: Notify the sales team about the corrected inventory level of "Superphone Z" to prevent any disruptions in customer orders.

8. Prevention and Corrective Actions (Gadget Warehouse):

To prevent future data entry errors, Gadget Warehouse should implement measures such as additional verification steps during the receiving process and employee training to improve accuracy.

Example: Institute a double-check process during product receiving, where two employees verify quantities to avoid similar errors in the future.

9. Regular Monitoring (Gadget Warehouse):

Gadget Warehouse should implement regular inventory monitoring and reconciliation procedures to catch discrepancies early and prevent the need for future rollbacks.

Example: Schedule weekly inventory reconciliations to ensure data accuracy and quickly identify any inventory issues before they affect operations.

We hope that you now have a better understanding of what inventory rollback is, why it's necessary, and how to implement our rollback process.

If you enjoyed this article, you might also like our article on how to come up with SKU numbers or transit inventory.  

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