TAKING STOCK

January signals a time for taking stock, taking inventory of the past and starting anew.

That practice has literal meaning for many store managers and employees because the first weeks of the new year typically mean inventory time.

Inventory is necessary for a variety of reasons, but primarily to compare book figures with floor and stock dollars.

"You take inventory to find out how close to your book inventory you are," said Jerry Zikmund, manager of K-Mart on South Kingshighway.

The difference between expected dollar figures and actual figures when inventory is counted is called shrinkage.

Shrinkage, Zikmund said, is defined as "merchandise that you can't account for either through sales or inventory."

There can be many reasons for shrinkage, including theft, damaged items that are thrown away and not recorded, or products improperly received.

"It's your bottom line," noted Dennis Marchi, manager of Schnucks on South Kingshighway. "The less shrinkage you have, the more bottom line you have."

"You don't have an accurate idea of your shrinkage until you've taken inventory," he explained.

Schnucks will take inventory this month while K-Mart will take a financial inventory in August.

Ways of determining inventory have changed through the years. These days many larger operations employ inventory services to do the counting. Plus, technology has made vast inroads in the way some stores keep track of inventory throughout the year.

The local Schnucks and K-Mart are two businesses that, through automation, keep a running inventory. Plus, the system provides for automatic reordering.

"We call it perpetual inventory," Zikmund explained. "Whenever an item is scanned it is automatically entered as a sale and then as a stock keeping unit (SKU) and we get replenished off of that sale."

The process is referred to as scan assist at Schnucks. Marchi said that items have a trigger number associated with them and when that number is reached for that particular item, then an order is placed.

Through the system, Marchi said, "paperwork is cut out, a lot of the human error and guess work is cut out."

"We refer to it as being centrally merchandised, automatically replenished," Zikmund said. "We do very little buying at the store at all."

John Sander of Sander True Value Hardware in Town Plaza Shopping Center is looking forward to receiving computerized ordering suggestions through a similar manner.

"We're in the process of automating the store," Sander said.

This month, the True Value staff will take inventory using the same techniques used for years. By mostly manual means, purchase information will be compared with product sale numbers and those figures will be compared to actual stock on hand.

But Sander sees big changes on the horizon. "By next year, we hope to have most of it already in the system and all we'll have to do is take a computerized printout and double check it," he said.

With the automated system, Sander explained, an order will be generated and secondly, "it will tell us down to the very item, how much each item is producing for the store, how much turn over there was for every single item individually."

Whether counted by employees of a company hired just for the task or by store employees, most stores still deem the physical contact with the merchandise as imperative.

"It's the one time of year we look at and touch each piece of merchandise," explained Phil Sante, manager of Hobby Lobby on South Kingshighway. During inventory, conducted this month, every piece of merchandise in the store is counted, he said.

While Hobby Lobby, like K-Mart and Schnucks, employs an inventory service to do the physical counting, store employees do the advance work. "The better the preparation, the easier the inventory," Sante said. Preparation, Sante said, includes cleaning and organizing and "making sure everything on a peg hook is the same item and the same price."

Sante, echoing several other store managers, explained, "the financial bottom line is what we're looking for in each department."

When inventory is being taken, Marchi explained, it's not the number of cans of a particular brand of green beans that are on the shelf that is important, but rather, "the total dollar amounts in each department is what they're looking for."

Howard's manager Jerry Green, likewise, is gearing up for the annual inventory process coming in February at the Broadway store. "We only do our sales on computer, we don't do our inventory on a computer," he said.

At Howard's, store personnel are responsible for counting the items. "Normally, during the evening we'll run through the items that are easy to count on the stockroom floor and go to warehouse," Green said.

Inventory results are an important tool when it comes to placing orders for the next season, he said.

Clipboards and pencils are the main equipment needed, Green said. "It's really kind of fun."