How to control inventory and pilferage?

[LITTLEREDDOT]

This is a question for those in the merchanise business. Dot is not in this business and often wonder how do the owners/managers control inventory and prevent pilferage.

Take supermarket or convenience store for example. Employees can pocket a few items here and there (a bar of chocolate, a packet of crisps, a packet of cheese). While there is regular stock-taking (once or twice a year), this usually focus on the big-ticket items.

Even if the shortfall is detected, how to pin the theft on any individual employee (assuming there are many employees).

How to detect who is doing the pilferage: the storeman, the stockist, the cashier, the manager, or the whole gang acting in concert?

 

[Rogue Trader]

the inventory system you are using - real time or periodic?

 

[LITTLEREDDOT]

Dot is ignorant. Dot is not in the merchandise/retail/warehouse business.

 

[Scrooball (clone)]

Install CCTV in the stores. This will also be useful in the case of theft by customers.

 

[wikiphile]

Here's a nugget, don't buy none, there'll be none to steal

 

[fukyuman]

You can always do random stock counts. Treat pilferage like rats nibblings. Go to Mustafa any given days and you will find half eaten food, probably by FT ah nehs and their own staff.

 

[lurpsexx]

You can always do random stock counts. Treat pilferage like rats nibblings. Go to Mustafa any given days and you will find half eaten food, probably by FT ah nehs and their own staff.

Do daily cycle count n tally the count accuracy to system stock figs.. Gotta be random n consistent with cycle count stocks picked by sys n only done on the count morning.. End of cycle count period, all stocks shld hv been counted at least once ( more for the more ex items)

 

[LITTLEREDDOT]

One more question: what if there is a change of shift of employees and managers (especially for those stores which are open 24 hours)?

How does the new shift know that nothing has been pilfered by the previous shift?

How do they do the handover?

 

[lurpsexx]

Even if the shortfall is detected, how to pin the theft on any individual employee (assuming there are many employees).

How to detect who is doing the pilferage: the storeman, the stockist, the cashier, the manager, or the whole gang acting in concert?

Assign areas of control n responsibility to fixed individuals. Any unaccounted stock losses will be their responsibility n they hv to make good the stock loss. This will instil checks by the staff as it is they who will be hit by losses n not the co. This works in 3PL firms for their clients

 

[lurpsexx]

One more question: what if there is a change of shift of employees and managers (especially for those stores which are open 24 hours)?

How does the new shift know that nothing has been pilfered by the previous shift?

How do they do the handover?

Do handover / takeover Lo.. Use Pareto 80/20. Count the high end stuff on every takeover will cover most of the inventory values. Don't swear the small kachang putehs..

 

[Microsoft]

For smaller quantity n higher value item...can consider using Electronic Article Surveillance (tagging) system...for grocery...not so practical so daily random stock chk and cctv are better tools...had de opportunity to help a friend set up her grocery store many yrs ago...yes pilferage ish a big headache...beside those big cctv where everybody can see...we oso install a few pin hole cam where oni owner noe...it does capture some "interesting" stuff...

 

[roadrunner]

From an accounting point of view, apart from regular or random stock taking, you have to always factor in a percentage for spoilage, theft & customers returning goods etc. don't count or spend your profits until it's in the bank & your overheads are all paid for or accounted for. I give you one example of a very big brand shop, during the xmas period, their cash tills were ringing every second, all the towkays sipay song liao rubbing their hands but what they did not realise was after xmas a lot of people returned goods or came back to exchange for other goods. The final year end figures were actually pretty bad, the CEO was fired, it ain't over till the fat lady sings!

if you're talking about in-house theft, stringent security measures like cctv, checking workers bags in & out of building & even employing undercover security personal within the shop floor staff is common. For management level, they will have internal audits & specialists firms to come in & root out the culprit(s) a bit like a private CPIB, normally ex police or fraud specialists. Those small companies who cannot afford this type of service, you have to be smart, like in the old days when owners of rice warehouse or even provision shop will always have a 'pet python' roaming around

 

[Rogue Trader]

I presume you are talking about retail ops..

There are actually 2 main types of inventory control. Real time tracking is more expensive. Usually all incoming inventory is kept in the system and it's linked to the point of sales check out system. It becomes cheaper when you own a chain (NTUC, sheng siong) where procurement and shipment is more or less centralised.

For periodic (manual) process, stock level formula is used to calculate your inventory costs at the end of the day/month/year. This is then tallied against a physical stock count to find out any theft. Mama shops have very tight manual controls and they are the experts at this.

Usually the expensive (high theft risk) stocks are monitored more closely. Things like phone cards, cigarettes and alcohol are usually kept under lock and key. A daily handover register is signed by shift supervisors. Lower value stuff like chocolate bars, potato chips and sngbuay are left out in the wilderness for wolves to pick on.

Good security and control measures also play a big part. Usually only the supervisor has keys to the stock room, inventory handlers are not allowed to touch on the cash register etc.

 

[looneytan]

put the lobang among your staff let the lobang wolve on a bar of choc or a can of drink in full view of other staff then you supervisor pretend to walk in at the end of day, line up all staff ask them to open mouth then you sniff one by one when come to the lobang you shout _ " Hoy! why you ate my Mar Bar and drink a can of coke at 3 PM!" then you slap him up real good, do this in front of everyone a few times a week

guarantee, no workers dare to pichar your lobang