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Shrink Report Processing the Shrink Report each month is a key component to achieving and maintaining your Operational Level 3 - Shrink metric. The Shrink Report is made up of five sections detailing SKU-level net shrink for the month: Key Concept - Understanding Adjusted and Excluded Shrink Mango will exclude certain categories when measuring your Operational Level 3 - Shrink metric. SKUs classified below will be separated from your adjusted shrink listing and placed in the excluded section of your Shrink Report. Adjusted Shrink vs. Excluded Shrink Separating shrink into two baskets (excluded and adjusted) allows for more focused variance research and more meaningful and consistently measured shrinkage from period to period and store to store. The goal is to remove noise, expected, and controlled variances (which can sometimes be overwhelming) to leave an adjusted listing of variances caused by theft, breakage or where the cause is unknown. Excluded shrinkage covers noisy classes where there is little procedural consistency from store to store, where shrinkage is controlled or expected such as closeouts and live goods, or where shrink is offset by sales to dump SKUs. Adjusted Shrink Excluded Shrink Theft Bulk Goods Breakage Closeout Unknown Live Goods Lumber Store Supplies Both adjusted and excluded shrink are listed (separately) in your Shrink Report, but the adjusted portion is only used in your Operational Level 3 - Shrink metric. Print the table below here. Excluded Shrink Classifications Category Class Fineline Other Notes Fasteners 561, 564, 566, 578, 580 - - - - If your store classifies fasteners differently (Class HIL for example) then Mango will not pick these up as Excluded unless there is a SKU match to Ace's catalog. Store Supply - - - - Location 1 = STORE SKUs with a Location Code of STORE or where a SKU matches Mango's internal Store Supply database will be treated as Excluded. Consider utilizing Credit PO's (or Keep Stock Info=N) to minimize shrinkage noise. Coupon - - - - - - SKUs with Coupon signatures are treated as excluded shrink. SKUs flagged with Coupons signatures are shown in your Exceptions.pdf report (Store Supply and Coupons, usually page 2). Lumber - - - - Record Type = L Shrink to L - Lumber SKUs is treated as Excluded due to the amount of noise in this category. Lumber enabled stores can find Record Types in the upper-left corner of Inventory Maintenance. Live Goods 752 - - - - Live goods can have significant shrinkage which is expected in this category. Keep Stock = N - - - - IMU Codes Tab When a SKU's Keep Stock Info status is changed from Yes to No and the SKU had a QOH value, the loss in inventory value is shrink. Your Eagle system will not list the SKU in RPH but Mango will pick up the variance and list it as excluded. Store Closeout = Y - - - - IMU Codes Tab Shrink due to closeout activity is treated as excluded. Rental -- -- Location 1 = RENT Rental SKUs are treated as excluded shrink. Bulk - Keys 510 - - - - If your store classifies keys differently (Class KEY for example) then Mango will not pick these up as Excluded unless there is a SKU match to Ace's catalog. Bulk - Glass 151 - - - - Bulk Goods tend to be noisy and shrink is offset by sales to a corresponding dump SKU. Bulk - Acrylic 152 - - - - Bulk - Wire 310 - - - - Bulk Goods tend to be noisy and shrink is offset by sales to a corresponding dump SKU. Bulk - O-rings 404 - - - - Bulk - Tubing 466 - - - - Bulk Goods tend to be noisy and shrink is offset by sales to a corresponding dump SKU. Bulk - Plastic Pipe 478 - - - - Bulk - Screen Repair 546 - - - - Bulk Goods tend to be noisy and shrink is offset by sales to a corresponding dump SKU. Bulk - Chain 570 - - - - Bulk - Nails 573 - - - - Bulk Goods tend to be noisy and shrink is offset by sales to a corresponding dump SKU. Bulk - Window Screen 575 - - - - Bulk - Rope 762 - - - - Bulk Goods tend to be noisy and shrink is offset by sales to a corresponding dump SKU. Loc6:MGOEX - - - - Location 6 = MGOEX Setting a SKU's Location 6 to MGOEX will treat all shrink to the SKU as excluded. This setting can be used to classify a range of SKUs in your store if the above classifications are not suitable for your organization. Stop Sale - - - - - - SKUs with active recalls or vendor stop sale notices are treated as excluded. Ideally, these items would be removed from inventory via a credit PO since a credit is typically issued from the vendor. Variance Worksheet - The 20 most important variances for your inventory coordinator to research and resolve. Once filled out, a meeting should be scheduled with the manager or owner to resolve theft, personnel, and procedural issues. Adjusted Shrink - Theft, breakage, and unknown variances. Top items from this listing should be researched by your inventory coordinator but a meeting with the manager or store owner is not necessary unless there is an obvious theft, personnel or policy issue. Excluded Shrink - Variances to bulk, lumber, closeout and other controlled and noisy shrinkage. This listing should be reviewed by your inventory coordinator. Defective Shrink - SKUs returned through your point-of-sale system as defective or variances logged as defective. Steps to process the Shrink Report: Print, research and resolve SKUs listed in your Variance Worksheets (usually page 1 & 2). Review your Adjusted Shrink Section, print pages with variances you would like to research. Review your Excluded Shrink Section, print pages with variances you would like to research. Review your Defective section. Research Hints Category Hint AHCOM Ace Hardware .com sales and shrink event occurred within 7 days of each other. BS+ SKUs in a possible back stock position exhibited by a SKU's quanitity-on-hand being greater than shelf quantity entered in Location 3. CS -- CS stands for Count Sheet, followed by the Count Sheet's two-digit Count Type. This SKU was listed on last month's Mango Count Sheets. Cashier Error? SKUs that are commonly rung incorrectly at checkout. Central RSC SKUs ordered on your regular order and delivered via UPS from a centrally located warehouse (RSC). These SKUs on your Ace purchase order are received in your computer (RRP) along with your regular order (when delivered by your regular truck) but are physically delivered later via a secondary freight carrier like UPS. Because of this, there is a lag between the SKU's quantity on hand after receipt and the SKU's physical quantity. Because of this, Central RSC SKUs should be recounted if shrinkage is experienced. Correction The variance this month reverses the variance from last month. Defective? Items that are commonly found to be defective. Perhaps the item was returned using “R” (Return to Stock, quantity on hand increased by one) instead of “D” (quantity on hand not changed). DISC The SKU is discontinued from your warehouse. If it was zeroed out, make sure a replacement was investigated. Dup SKU This SKU has an exact duplicate that only varies by case. Check your Exception report for the Duplicate SKU section which will show the duplicate SKUs. High Shrink Rate These SKUs experience a high shrink rate across all stores. HOT This SKU is exhibiting persistent shrink and may be a shoplifting issue or a procedural issue. ICM Item was potentially a new/old SKU for an Inventory Change Management (ICM). SKUs may have been confused when counting. Item Setup The SKU has a fundamental setup issue with its Order Multiple and/or Unit Multiple that causes persistent shrinkage. Check your Master Exception report Item Setup section for more information on the SKU. Kit This SKU has been accidentally set up as a Kit Header. Check your Master Exception report Ket Header section for more information. Multi+ SKUs in multiple locations exhibited by a floor location in Location 2 field in IMU. Check the other location(s) for inventory. NoRPH This SKU does not have a corresponding shrink record (RPH) in your Eagle system which indicates an imbalance in shrinkage. Give us a call if you see many NoRPH's appearing on your shrink report. (734) 301.4510. Packaging? SKUs that may have a packaging issue causing breakage. RCIN A recent RCIN was performed on the SKU. RCIN SKUs are commonly counted incorrectly because dissimilar-looking items have been combined into the same SKU in the back office but the SKUs have not been combined on the sales floor. Receive Error? SKUs commonly received incorrectly. For example, NS (Non Stock) displays and other items received as one package with many different SKUs inside. Rep. SKU Store Use? SKUs which are used commonly throughout the store, e.g. toilet paper, packing tape, snap knife. These items should be charged through the store house account rather than run through your shrink system. Theft? Items that are commonly stolen. e.g. candy, snacks, drinks, liquid laundry detergent. UPC x-link Items listed on your Master Exception Report with a UPC cross link. These items will exhibit shrinkage until the x-link is fixed via your Master Exception Report. Zeroed the SKUs quantity on hand was likely set to zero, usually during your weekly shooting outs process.
Shrink Report
Research Hints Category Hint AHCOM Ace Hardware .com sales and shrink event occurred within 7 days of each other. BS+ SKUs in a possible back stock position exhibited by a SKU's quanitity-on-hand being greater than shelf quantity entered in Location 3. CS -- CS stands for Count Sheet, followed by the Count Sheet's two-digit Count Type. This SKU was listed on last month's Mango Count Sheets. Cashier Error? SKUs that are commonly rung incorrectly at checkout. Central RSC SKUs ordered on your regular order and delivered via UPS from a centrally located warehouse (RSC). These SKUs on your Ace purchase order are received in your computer (RRP) along with your regular order (when delivered by your regular truck) but are physically delivered later via a secondary freight carrier like UPS. Because of this, there is a lag between the SKU's quantity on hand after receipt and the SKU's physical quantity. Because of this, Central RSC SKUs should be recounted if shrinkage is experienced. Correction The variance this month reverses the variance from last month. Defective? Items that are commonly found to be defective. Perhaps the item was returned using “R” (Return to Stock, quantity on hand increased by one) instead of “D” (quantity on hand not changed). DISC The SKU is discontinued from your warehouse. If it was zeroed out, make sure a replacement was investigated. Dup SKU This SKU has an exact duplicate that only varies by case. Check your Exception report for the Duplicate SKU section which will show the duplicate SKUs. High Shrink Rate These SKUs experience a high shrink rate across all stores. HOT This SKU is exhibiting persistent shrink and may be a shoplifting issue or a procedural issue. ICM Item was potentially a new/old SKU for an Inventory Change Management (ICM). SKUs may have been confused when counting. Item Setup The SKU has a fundamental setup issue with its Order Multiple and/or Unit Multiple that causes persistent shrinkage. Check your Master Exception report Item Setup section for more information on the SKU. Kit This SKU has been accidentally set up as a Kit Header. Check your Master Exception report Ket Header section for more information. Multi+ SKUs in multiple locations exhibited by a floor location in Location 2 field in IMU. Check the other location(s) for inventory. NoRPH This SKU does not have a corresponding shrink record (RPH) in your Eagle system which indicates an imbalance in shrinkage. Give us a call if you see many NoRPH's appearing on your shrink report. (734) 301.4510. Packaging? SKUs that may have a packaging issue causing breakage. RCIN A recent RCIN was performed on the SKU. RCIN SKUs are commonly counted incorrectly because dissimilar-looking items have been combined into the same SKU in the back office but the SKUs have not been combined on the sales floor. Receive Error? SKUs commonly received incorrectly. For example, NS (Non Stock) displays and other items received as one package with many different SKUs inside. Rep. SKU Store Use? SKUs which are used commonly throughout the store, e.g. toilet paper, packing tape, snap knife. These items should be charged through the store house account rather than run through your shrink system. Theft? Items that are commonly stolen. e.g. candy, snacks, drinks, liquid laundry detergent. UPC x-link Items listed on your Master Exception Report with a UPC cross link. These items will exhibit shrinkage until the x-link is fixed via your Master Exception Report. Zeroed the SKUs quantity on hand was likely set to zero, usually during your weekly shooting outs process.
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