Keeping stock!

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Sports retailer JJB Sports conducts an average of three or four stock audits per year, which encompass its entire store network. In addition, supplementary audits are implemented and, in worst case scenarios, some stores could be counted eight or nine times depending on circumstances.

The objective of each audit is to reconcile the central stock file with what it actually has in store. In doing so, JJB obtains a clear and concise count of all of its assets and identifies stock loss and any associated trends or problem stores.

Richard Hodson, associate director of stock control for JJB, says: “The challenges we faced in our stock audit process are no different to any other retailer. Accuracy is fundamental and over the years we have instigated many procedures and developed an extensive programme to attain reliable and accurate results. However, up until recently we were counting blind, our scanners didn’t verify codes so we could never be 100% sure that what was reported, was actually the item counted.” He continues: “Furthermore, our incumbent process meant that we always had difficulty dealing with stock movement. Consequently, by merely scanning barcode data we were not certain that the codes being scanned were correct or where the stock was physically located in the store. We often received partial codes for counted items, so the only thing we could be sure of, was that a number of unknowns had been counted. In these circumstances, we would spend time investigating the identity of the unknown, and if that failed we would simply take a guess and assign an average value. So, no matter how many new procedures we put in place we were always checking and rechecking counts as they arrived.”

Over time the JJB stock audit processes became extremely complex and extensive and in turn, incredibly slow and laborious, taking as long as our or six weeks to complete. It relied upon scanned data being downloaded via the in-store cash till and polled overnight to arrive at the head office in Wigan. “When the count was closely examined and reconciled, the head office team would spend days number- crunching, looking for differences, comparing what should be, against what data was captured from the store. Often we would ask for recounts and clarification for specific items and even then we were reliant upon shop staff, which didn’t necessarily mean that we had an accurate reading!” says Hodson.

“We were always playing catch-up. Even stores identified as a priority, ran some two to four weeks behind. It became a very pressuredenvironment, made more so, since every store counted demanded its stock verified – yesterday! In fact, we came to rely upon the Christmas and Easter holidays to give us some breathing space to allow us to gain a little ground.”

Hodson says JJB knew it had outgrown the technology but it was not until we came across a new software solution, Nucleus IS – Stock Audit from PEAK Technologies, that it found the answer to our auditing problems.

Nucleus IS – Stock Audit is designed to cut the cost and disruption of stocktaking and deliver proven, accurate, results on the spot. It is easy to use and removes any possibility of counting blind, with the inherent capability to instantly verify barcodes and keeps track of the physical progress of the audit. In other words, a perfect fit for any large store multiple such as JJB. As a data capture solution, it also helps identify stock loss and areas of concern.

Perhaps more importantly, PEAK Technologies has engineered the software to be entirely configurable so that it offers the flexibility to match JJB’s exacting business processes and needs.

The introduction of PEAK Technologies’ Nucleus IS – Stock Audit solution has driven quite radical change throughout JJB’s entire auditing process. “We took Nucleus IS – Stock Audit on trial and tested it at our biggest Wigan store. What we found was that it is everything we were told it would be. During the trial, we were able to verify codes on the spot; any anomalies, like nonsensical codes, were immediately spat out for clarification. All in all, it proved that it offered fantastic flexibility and receiving the results literally within minutes of completing the physical count process had a major impact, since it removed the need for staff to get involved in a round of telephone Ping-Pong, to check the count with the store. We carried out the trial in April 2002 and by May 2002 we committed to equipping each of our regionally based stock audit teams with PEAK’s Nucleus IS – Stock Audit product.”

By January 2003, JJB had implemented 20 Nucleus IS – Stock Audit kits and the results talk for themselves.

Today, JJB can return an accurate stock take from a priority store within two days and the entire process has shrunk from six weeks to around two weeks. “We still do the same number of counts annually, but we no longer play catch-up. Part and parcel of using Nucleus IS – Stock Audit has resulted in decentralising the whole process and now the onus is on the field based stock taker to get it right and submit a complete and correct count. There is no reason now for any of the reports we receive at head office to be anything other than 100% accurate.

“The change has been quite dramatic, we now have a complete streamlined and transparent system that delivers exactly what we require,” concludes Hodson. n

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