Stock

Perform Stock Control Procedures

Retail Certificate IISIR07

Objectives of effective stock control

• a controlled level of markdowns• minimal investment in unnecessary stock• appropriate stock-turn for the products• minimal storage expenses for stock• balancing of stock against sales• minimum carryover of

seasonal/promotional• sufficient width and depth for customers• flexible $ ‘open to buy’ to permit special

buys• minimal stock shrinkage

PURPOSE• Counts and records all stock in the store, at a point in time.• Tells the store exactly how much stock they have in the store.• Tells the store how much stock has been lost or incorrectly

administered.• Gives the buying office quantities of stock for ordering purposes.• Identifies errors in store records.• Brings book-stock into line with actual stock at the end of the

season.• Legal requirement to conduct at least one stock take per year –

stocktakes can occur seasonally, bi-annually or annually.Inventory control plays a critical role in the success of any retailer. If you don’t have the stock, you can’t make sales and you go broke.

Stock procedures vary a lot between large and small retailers and according to stock type sold.

Food retailers also have the added responsibility of controlling items with very short life spans.

Control

Unit

InventorySystems

InventorySystems

Planning

Unit

Merchandise Budgets

Merchandise Lists

PLAN PLAN PLANCONTROL CONTROL

CONTROL

Merchandise Management

= +Dollar

The merchandise management process

Dollar

Planning• $ planning is a financial management tool

used to plan the amount of total value ($) inventory that a business should carry.

• It is accomplished through a merchandise budget5 stages: 1. planning sales

2. planning stock levels3. planning reductions4. planning purchases5. planning profit margins

StockMonitoringactivities

Check allstock handlingand movement

within store Check reservestock pricing

Check handlingof invoices

Check all shortage claims

Check stock and handling

for transfers out

Check pricing and quantities of goods

removed from large boxes

Check handlingand storage of

damaged goods

Check properuse of

tags, labels, tickets

Check priceson merchandise

Spot-check quantitiesreceived into store/

department

Check forprice changes

Receiving Bay• Keep it clean and tidy• Ensure there are NO empty boxes left

around• Shelving or fixtures tidy, stable and ready

to receive the stock• Equipment for moving stock ready• Are there any obstructions that may

cause a problem when moving stock around

http://www.materialshandling.com.au

http://www.materialshandling.com.au/

Verification and delivery • Check the store name and address is yours• If it is NOT yours, DO NOT ACCEPT IT.• Check the delivery docket/invoice for

quantities of boxes etc.• Only accept one delivery at a time, first in. • Inspect cartons for tell tale signs of

damage. Eg. Watermarks, loose merchandise, sealing tape been tampered with, crushed boxes etc.

• Descriptions of stock must match actual stock received.

Stock movementexample• Cartons of shampoo (6 in a box by

10)

• These items are too heavy to lift by yourself or with a team member – use trolley/hand pallet jack to move around.

• Stanley knives – cuts the tape• Unpack smaller boxes onto

shelves• Flatten cartons immediately

Various types of storeroom storage

Check Stock• check quantities against paperwork• check for damage, no matter how small• check that the stock received is the stock

ordered• check the box is undamaged, or been wet• check the type of storage required for the

stock eg. If it is cleaning products it may need to be stored in a particular area with good ventilation.

• security is vital so only authorised personnel should be in the receiving bay.

Terms to know• BOM = beginning of month• EOM = end of month• SKU = stock keeping unit• MI = maximum inventory• COGS = cost of goods sold• GM = gross margin (the difference between COGS

and net sales)

• DP = delivery period (the time between order and delivery of goods)

• RP = reorder period (time interval between orders)

• FIFO = first in, first out (assumes the goods are sold in the order they were purchased)

• LIFO = last in, first out (recent purchase costs are used to price inventory)

Terms to know continued• DPP = direct product profit (to assess pricing

strategies of categories & products)

• OTB= open to buy (the amt a retailer can buy without going over planned purchases)

• GMROI = gross margin return on inventory (the ratio tells the retailer the $ investment needed to achieve a desired gross profit)

• APN= Australian product number• Lead-time= time taken from placement

of order to delivery of stock• EDI = electronic data interchange• EAS = electronic article surveillance

ShrinkageThis is when there is less stock than there should

be. It can be due to:

• incorrectly recording different SKU’s together when they should be recorded separately.

• theft• damaged merchandise• use of store stock• incorrect ticketing• inaccuracy at registers• non recording of markdowns• inaccurate recording on stock take day

Preparation1. General sweeping and tidying floor and storage

areas.2. Put all stock into its correct location prior to

stocktake day. On stock take day DO NOT move display merchandise back to its original location, it could be missed or counted twice.

3. Ensure every item of merchandise has a ticket and key-code.

4. Check under counters to ensure no stock is hidden.

5. Check boxes to ensure they have stock in them.

Efficient preparation ensures time spent on stock-take day is spent recording merchandise quantities, not chasing up stock records.

• can be manual or electronic• electronic re-order stock automatically

(EDI)• identifies stock types• identifies price and other features of stock

StockSystems

Sorting stock

Be aware of – • barcodes may vary for size, colour and

brands of merchandise. • barcodes may only vary for different

colours and not sizes.• barcodes may be the same for all sizes

and colour of the same brand.• Check every item individually.

Stock will be required to be sorted and counted prior to recording quantities.

Location tickets

• location tickets/stickers are generally laid out with one ticket/sticker per unit or module

• 4 way rack• scarecrow• reserve fixtures – shelving, drawers• lifestyle displays - mannequins• associated selling strips/basket• starting and finishing tickets/stickers are

also used.

Location tickets are used to ensure the entire store’s merchandise is counted. They direct you to your specific counting/recording areas. They often contain a barcode or a 4 digit number or an alpha/numerical combination.Eg. Aisle 1 shelf 1, shelf 2, shelf 3 etc.

Sequence to use is

• left to right

• top to bottom

• front to back

FacingsTwo types: SF and MF• SF = single barcode facings - All

merchandise has the same barcode.• MF = multiple barcode facings -

Different barcodes in the one facing.

• Shelf – every item on the entire shelf has the same barcode.

• Bulk – Every item on the bulk stack has the same barcode.

Organise it • co-ordinator / personnel / floor planner technology

support / data entry / ticketing support / logistics staff / and these are the minimum.

• all stores will undertake their stocktake in different ways.

• stock take can be manual or electronic. • electronic scanners/guns often make the task fast

and accurate, as long as correct procedures are followed.

• starting a fixture - open the scanner by scanning a barcode that may be attached to the gun.

• scan the fixture barcode, begin the scanning process.

• when finished, often a sticker is placed over the barcode so the checker knows the fixture has been counted.

• manual count requires the numbers to be written clearly with NO extra curls = 1 2 3 4 5 6 7 8 9 0

• some counts also use = = 5

Personnel Required• TO DO IT - counter / recorder / checker• generally two people work together, one counts out

loud and the other writes while also checking the count. This is NOT the time to discuss ANY OTHER issues.

• all staff should be trained for stock take.

Checkers • check the accuracy of the count. They have their

own sheets for manual counts and work closely to the coordinator for electronic counts.

• reserve or storage area counts requires sell out sheets (SOS) to be used and checked.

• checkers use RED pens while recorders use BLACK pens.

• a clipboard is a handy tool.• floor plans are vital to a well organised stock-take.• check 100% of 10% of the fixture.• continue to check if errors are found.

DO NOT• partially check fixtures• forget to have a system on hand for

times when counts are stopped in the middle of a fixture

• accept poor scanning disciplines• accept inaccurately scanned fixtures• talk while counting is taking place• forget to create your plan and mark it

off as you go• use a red pen unless you are a checker

Be aware that• a pack is counted as one• stock missing barcodes need to be checked

by supervisor• large stock over one shelf is not counted

twice• in double hung areas the lower section is

not missed or stickers lost• uneven shelving stock is not missed• display stock is not missed• out of date/damaged goods are still counted• customer’s goods are not counted• small items are easily missed

Specific procedures laid down by your own store may differ from these. The above is a guideline and is to be treated as such.

PRODUCT STOCKTAKE SHEET

DATE: RECORDER: COUNTER:

ITEM SIZE/COLOUR PRICE COUNT QUANTITY Checker quantity

Day shirt 16 $35.00 1111 4

PLU Codes Uniform Shop as at 30/08/2005

Boys Girls Non Gender

Item Size Code Item Size Code Item Size Code

Junior Shirt 85 12 Junior Blouse 8 31 Day Shorts 62 1








Equipment

Pre-printed barcodes

Teklogix

DOS devices

Printer

Portable Data TerminalScanner

Custom Labels

The End

Research from

Weitz, Levy - Retailing ManagementWRAPS - Perform Stock Control

ProceduresWrice, Mark - First Steps in Retail

Management

Education

Stock