Whether you’re a manager at a major department store, or you own your own boutique, inventory is a business necessity that most of us dread. Between planning, executing, and completion there are a number of things that tend to always go wrong during inventory, but tackling your first (or your 50th) inventory doesn’t have to be miserable. If you plan a little, work smarter not harder, and use the best resources it will all be over before you know it! Okay, maybe not, but it will certainly run more smoothly. So, let’s dive right into the inevitable inventory mistakes every retail professional faces, and how you can address them.
Inventory Mistake: Not Planning Early and Often
Lack of planning is a first-timer’s biggest pitfall when running an inventory. The planning process is not just important, it’s crucial. Whether you’re using labels in a traditional inventory or scanning through RFID, you need to know exactly what you hope to achieve, and what tools you will need to get there. Give yourself plenty of time to plan a solid strategy. Do you need maps? Do you need extra equipment? Do you need extra hours from your team?
Another key element to planning is whether you’re doing this inventory yourself, or whether you have a team who’ll be executing it with you. If others need to understand your plan, make sure you’re able to communicate the method to your madness in a straight-forward way.
Plan for some of your products to be missing labels or identification, plan for your team to have issues learning the steps you have so carefully laid out, and plan for a “catch-all” area that you can use to circle back at the end and capture mismatched items.
Inventory Mistake: Not Training Employees on Equipment
Inventory equipment and tools are key to your success. Whether you’re using barcode scanners that tie back to a label count, RFID technology that has a centralized server, or you’re relying on cloud software that automatically captures your items based on location, you need to make sure to understand the technology. Some of these tools can be very expensive, so the important thing to consider is your inventory structure and how much time/how often you’ll be running inventory. You need to make informed decisions before planning an inventory on what technology and equipment you’ll need, and get it up and running before you start.
One of the biggest issues with the inventory processes is for your team to struggle with the equipment they’re using to capture each item. This lack of understanding can throw off your whole count, and render your inventory useless. Train your team. Equipment proficiency is one of the single most important things about running a smooth inventory.
Inventory Mistake: Human Error and Miscounts
Human error is something that’s bound to happen in an inventory and the only thing you can do is attempt to minimize it as much as possible. While these days most businesses don’t simply count each item by hand, there’s still an element of error that happens because of various environmental factors. Distractions are inevitable, no one operates in a bubble and many business owners attempt to multitask when running inventory. Be careful with multitasking. The process of counting or scanning seems straight forward, but because it’s such an easy task the mind doesn’t need to give as much attention for execution, and therefore people tend to get sloppy. Mistakes are much higher when you are multitasking with your inventory.
Another way to check yourself is to audit parts of your store or warehouse. With RFID you can easily have someone scan a section over and make sure they got the same count you did. With a traditional barcode scanner, it can be more time consuming, but still crucial for insuring accuracy.
Inventory Mistake: Booking Errors (or Phantom Stock)
Booking errors can be complicated. If something has been booked to your store and you didn’t catch it in the receiving process, it’s very challenging to reconcile after the fact. If you know of any booking or incorrectly shipped items before your inventory, make sure to note them so you don’t think they’re unaccounted for. If you’re the one booking items to your store as well as doing inventory, chances are this hurdle won’t be as much of a headache as it is for major dept. store managers. However, booking errors can seriously throw off your results when you get to the analytical stage of recapping your inventory.
Bottom line is often booking issues happen, and you are accountable for items you never received, but best practice here is just to be aware of this and make a note of it for reference during and after the inventory.
Overall, planning, executing and reconciling an inventory is something most of us dread. However, if you arm yourself with a couple of key tools and best practices, the whole process might not be so bad. When things go smoothly, it’s a huge accomplishment, and maybe even a little fun!
To learn how CB4 helps operations teams find and correct the highest-value in-store operational issues, take a look at our Research & Reports, where you’ll find information on our product and the latest industry research.
About the Author
Kate started her career at Bloomingdale’s as an Executive Development Trainee in the 59th St. Flagship Store in New York City. She worked in several families of business as a Sales Manager closely partnered with the operations, and central buying teams to ensure ideal product assortment and placement. She then transitioned into a full time logistics and merchandising management role with a focus on reducing shortage, and improving overall presentation of product through customer insight and elevated inventory tracking. Kate has managed countless inventories and worked to integrate a larger footprint of RFID technology integration in her store. In addition to inventory management and operations, Kate is passionate about mentoring recent graduates and she supervised interns and executive trainees in her time with Bloomingdales.