Knowing what you have.
WHY IT MATTERS
Stock is the largest asset and the largest source of loss.
WHAT ACCURATE STOCK RECORDS ENABLE
Knowing what to reorder Detecting loss Identifying what sells Valuing the business
WHAT TO ESTABLISH
A record of every item: what it is, what it cost, what it sells for, how many.
WHAT TO USE
The point of sale system, if it tracks stock.
WHAT TO DO ON EVERY DELIVERY
Check against the order and the invoice, then record it.
WHY CHECK
Deliveries are short or wrong more often than expected.
WHAT TO RECORD
What arrived, not what was ordered.
WHAT TO COUNT
Physical stock, regularly.
HOW OFTEN
High-value and fast-moving items frequently; everything else periodically.
WHAT CONTINUOUS COUNTING MEANS
Counting a portion of the range each week rather than everything at once.
WHY IT WORKS BETTER
It is sustainable, and discrepancies are found sooner.
WHAT DISCREPANCIES INDICATE
Theft Damage not recorded Receiving errors Sales recorded incorrectly
WHAT TO INVESTIGATE
Any consistent pattern, by item or category.
WHAT TO MEASURE
Shrinkage: the proportion of stock unaccounted for.
WHY MEASURE IT
Unmeasured loss is absorbed invisibly.
WHAT TO DO ABOUT SLOW-MOVING STOCK
Identify it, and clear it.
WHY
It is cash sitting still, and it frequently becomes unsellable.
