Paul’s Inventory Control and Auto Replenishment Tips
Thursday, June 19th, 2008Paul Linn, manager of Zettler Ace Hardware in Columbus, OH, came up with these tips for using Substruct Utilities for Inventory Control and Computer Assisted ordering.
Why should I bother keeping accurate on-hands? And why use Computer Assisted Ordering?
- According to Ace Hardware Corp., stores that use Computer Assisted Ordering have larger sales increases with less inventory on hand. Plus, Computer Assisted Ordering is more productive: an Ace order takes less than 2 hours to complete.
- If you have more than one store, accurate on hands make stock balancing between different locations possible; increasing turnover for each location along with being able to take advantage of pallet purchases for multiple stores. At minimum you can check stock at other stores using the computer and an Internet connection.
- When your on hands are accurate, year-end inventory is just a matter of printing reports and counting bulk goods.
So how do I keep my on hands accurate?
- If everything that enters or leaves your store goes through the computer system, your inventory will be fairly accurate.
- Point of Sale - Cashier accuracy in Point of Sale is vital. More inventory errors happen at the register than anywhere else. If the product has a UPC code, scan it. Train your cashiers to use the “Create Special Order…” feature for items that are not in the system, and make sure they scan every item. Try to avoid using the quantity field; scan each item like they do at the grocery store. (How many times have you seen a cashier ring up four 60 watt light bulbs when there was actually two 60’s and two 100’s, but the packages look the same.)
- Run your Substruct Non-Inventory and “Create Special Order…” reports daily and follow up with your cashiers.
- Receiving - Don’t forget to receive dropship (3rd party) orders and interstore transfers using Cougar Mountain’s “Adjust Stock Quantities”. Everything that enters the store should be received, not just Ace orders.
- Policy A, defective, and store use goods should all be processed through POS using the tendered key.
- Shrinkage happens! Follow the 80/20 rule - 80% of your inventory problems come from 20% of your SKU’s. If you can control the 20%, the other 80% will take care of itself.
- Check for out-of-stocks weekly - After you have receivied your weekly order and updated it into Cougar Mountain, check all empty Ace peg hooks using the Cycle Counts module. Then have a detail oriented employee print out and go through the exceptions report. Keep in mind that the chances are if the computer says you have something in stock, it probably has more than 1 peg hook or it is stocked in the wrong spot.
- Stocking - Have your stockers write down SKUs and counts of any overstocked items that they stock, then adjust your inventory using Cycle Counts after the invoice has been updated into Cougar Mountain. Remember: If the peghook is full and you’re receiving more, chances are the on hand is incorrect.
- Be very careful when using Cycle Counts. Having an inaccurate person taking inventory is just as bad as having an inaccurate cashier.
- Cycle counts - do on a systematic basis; 1/12th of the store - once a month, 1/52th once a week, etc. When you are counting, scan UPC codes, not bin tags. Also make sure all items have the same UPC code for that peg hook or shelf spot.
