Doing an inventory count at the end of the calendar year can be tiresome, time-consuming, and costly for retailers. An enterprise always has the option of spending money on a third party to get the job done, but this can get costly. Still, most managers would prefer their end-of-year visits come from Santa Claus, not the tax man, so precision is essential.
A year-end physical inventory count can help control instances of inventory shrink—you’ll be able to run your expected numbers up against the findings of your physical count. The year-end count is also a good time to examine which of your products are selling well and which are not.
If you opt to complete the task on your own, there are a few best practices worth following. Doing so can make your year-end inventory count much easier to complete in a timely, accurate, cost-efficient manner. Some retailers are already ahead of the curve.
1. Plan ahead and plan early.
Before you begin counting, draw up a battle plan. The holidays can bring crowds so it’s better to start preparing sooner rather than later. Here are some quick tips to creating a solid plan:
- Identify key personnel to execute an inventory count, and make those designations early. Holiday events and time-off schedules could conflict the longer you wait.
- Avoid running into an employee shortage during your count. Make sure you have enough staff on hand to complete the count in a short amount of time.
- Avoid the holiday rush crowds who would otherwise drain your inventory as you’re trying to count it.
- Make a map for your plan. Break things down either by aisle or sub-department. Make sure each area is ready to be carefully counted and checked off.
- Start preparing at least a month or two (or even three) ahead of the actual count.
Try doing a “dry run” practice count during the planning phase. This will help you get a better idea of how many staff members you’ll need to get the job done without hiring more help.
2. Clean up beforehand.
Make sure you have an accurate map of items and their respective locations that staff can follow.
Making sure that everything is where it needs to be should be one of the first things you do in the planning phase, so cleaning up the stocking area is a must. Use this cleanup operation as an opportunity to get your store’s stocking area in tip-top shape.
- Make sure everything has a place and everything is in its place.
- If things are regularly out of order, this is a chance to end the problem, cold turkey.
- Make sure you have an accurate map of items and their respective locations that staff can follow.
This will make your counting move faster and help ensure accuracy throughout the rest of the year.
Not only does this task help you get organized for the new year, it can also be a great time to evaluate and update your store’s planogram if needed.
3. Get the right tools for the job.
Grocers operate on tight margins as it is and the grocery retail space is only getting more competitive as time marches on. Having a 360 view of store stock at all times is critical.
- Use appropriate barcode scanning tools like mobile handheld devices.
- Having access to comprehensive inventory and sales data won’t hurt either.
If you have unified commerce technologies that can generate reports before you begin your physical count, do so. If your store has moved to perpetual inventory, congratulations, you’re already several steps ahead of most grocers. When the count has finished, you’ll be able to compare these inventory reports with the findings of your physical count and identify any potential points of discrepancy.
4. Take on the task in teams of two.
Making your inventory plan early means you’ll have made sure you’ve got the manpower you need the moment you need it. Two-person teams can focus on the granular counts; they can take down the “trees” so you can get a clear view of the “forest.”
- If you can break up counting tasks into small teams of two:
- Your staff members are less likely to feel overwhelmed.
- It makes the task seem less intimidating and more manageable.
- Remind teams to look out for items being stocked in multiple places. Backstock and end caps are sometimes overlooked.
Pairing a more-experienced associate with a less-experienced one may be beneficial. While one member of these two-man teams may be less knowledgeable about the process this time around, they’ll be able to learn from their more-experienced teammate.
By the end of the count, they’ll be acquainted with the process for next year and can help lead. This can also be an opportunity for a less-experienced associate to become more familiar with the products you carry.
5. Determine the right time.
Finding time to do a year-end physical inventory count is a particularly difficult challenge for grocers and convenience stores. It has to be done in the middle of a holiday rush and many stores in these verticals now run on 24-hour models; scheduling any downtime at all can impact a store financially.
If you are able to shut down store operations to complete the count:
- Be sure to pick a time close to year’s end (perhaps after Christmas, but before New Year’s Eve.)
- Communicate any changes you’ll need to make to your normal operating hours.
- Notify customers multiple times and through multiple channels to avoid confusion/complaint.
Another option: You can perform the count overnight. This can be difficult to organize with store personnel, another reason to plan far ahead.
If you are not able to shut down store operations to complete the count:
- Identify a slow time to perform the count with minimal transactions taking place.
- If you can closely track items sold during the count, you can reconcile those numbers afterward.
If you are utilizing a unified commerce platform, with shared transaction logic, the problem of inventory movement during a count becomes non-existent. This solution is able to update your physical inventory counts with real-time transaction data to ensure a highly accurate count regardless of time of day.
Final Takeaway: Unified Commerce technologies make it all easier.
When you’ve already got a unified store system that gives you a real-time 360-view of inventory on-hand, the physical count becomes a step to affirm and assure your 360-view, not provide it.
A comprehensive technology can help you stay competitive and help with each of the best practices listed above. The right stack can help you master these best practices, down to a science.
A grocer whose store is already fully-connected from the POS to inventory:
- Will know the best possible time to schedule a physical count.
- Can digitally track and categorize stock; clean up and organization should be a breeze.
- Can easily reconcile inventory changes that happen during a physical count.
Physical inventory counts ensure that the rest of your store systems are accurate and in proper order. When you’ve already got a unified store system that gives you a real-time 360-view of inventory on-hand, the physical count becomes a step to affirm and assure your 360-view, not provide it.
Are you ready to bring all of these best practices together?
CATAPULT® and its inventory and supply chain modules provide a single hub for managing your inventory in real time, from anywhere in the world. Through CATAPULT WebOffice™, you can operate multiple warehouses, track purchases and shipments, and connect your e-commerce stores directly to your inventory reports. ECRS will automate your retail inventory processes so you can stay focused on boosting your bottom line. We can even help with that too.
Contact us now and get started with CATAPULT!