Counting Process Review

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Operational Level 4 - Counting Process Review

Now that we know how tomonitor Level 4 - Efficiency, let's see how to use SKU-level data and your computer system to help identify rogue counting processes. We will use our Shrink Report (Review Report email) to highlight variances caused by unknown processes and then interview the person responsible (or consult video) to determine if the count was desired. Once discovered, you can meet with your store manager or owner to ensure enough labor is devoted to the counting process to get a good count, or if the counting is not worth the labor effort, then discontinue the process.

Effective counting vs. ineffective counting

Not all counting is good and not all counting is bad. Our goal when analyzing these Shrink Report variances is to determine if it was part of an effective counting process or if it was a rogue process. An example of a rogue process is when a person grabs an RF gun and starts counting without pre-sorting bins/hooks, identifying back/top stock and without the benefit of an inventory coordinator performing variance recounts and variance research.

Four-step counting

If your store has low efficiency then there is a process or two causing a lot of counting, here are some examples of what to look for:

A department manager might take Shooting Outs to mean counting not only SKUs with zeros (holes) but also SKUs with 1, 2 or 3 on hand.

A counter may decide to count "around a variance" where nearby and similar-looking items are counted when a variance is found. This is fine as long as the counter is good at sorting similar-looking SKUs and your inventory coordinator has the time to recount subsequent variances.

Staff is counting during "red" times: when the sales floor is busy with customers or when a delivery is in process. This can cause poor initial counts because of constant customer interruptions. Counting during delivery windows can cause significant issues unless the counter is in sync with the order's receipt into the computer system and all items have been put away.

A department manager routinely counts their department. Sometimes this is desirable, like after a reset or when a deep-sorting of plumbing or electrical fittings has been performed. But a department should not need continuous counting to stay accurate. Accuracy labor is best directed to sorting bins, dealing with top/back stock and cashier testing.

SKUs counted while processing Mango's Count Sheets and while Shooting Outs are effective processes because they are dealing with high-risk inventory and counts have a higher probability of being wrong, and variances tend to be more researchable. Other counting processes need to be examined to determine if they are increasing sustained accuracy in your store or are merely contributing to variance noise.

1. Review Shrink Report

Review ITR

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