Auditing several branches: one routine for every store

Imagine a furniture and home-goods chain from Turkey with stores in Tashkent, Samarkand and other cities. Each store counts in its own way: one counts the display pieces and another does not, one hands in its report in Excel and another on paper. When head office puts the results side by side, it cannot even tell why one branch differs from another. The answer is a single audit routine that gives every branch the same rules and the same form.

One set of rules

The following should be common to all branches:

• zone names and their order: display area, back store, damage corner, returns rack;
• the cut-off time: at which hour the last receipt and issue slips are closed before the count;
• units: piece, set or carton, and which product is counted in which unit;
• display pieces and samples: are they part of the count, or written on a separate line;
• the result form: the same columns and the same file format;
• signatures: who counts and who approves.

Put these rules on a single page and send it to every store unchanged. The moment branches start making small adaptations, the value of comparing them drops.

Who does the counting?

If a branch's own employee counts the branch's own stock, the count is still done, but it is not independent. An employee from another branch, or an outside team, closes that gap. Another option is a cross-count: branch A counts B, B counts C and C counts A, so every store both counts and is counted. An outside team costs money, but it produces a neutral figure for head office. A cross-count brings small chores of its own, such as planning the exchange day and the travel costs; if your branches are in different cities of Uzbekistan, allow for that.

The calendar: not everything at once

With six branches there is no need to count all of them in the same week. A simple scheme:

• a full count in each branch every three months; with six branches that means two branches a month;
• a short monthly check of the 20 fastest-selling items;
• a weekly look at the damage and returns racks;
• priority in the next round for any branch whose last count showed a high variance.

That gives each branch four full counts a year, keeps the stock under constant watch, and never ties up the whole team in counting for a month. The monthly check of 20 items is a small rehearsal of the full count; it is quick but shows early whether the records are up to date.

Display, damaged and returned goods

In a store, three areas are often left out of the records: the display, the damage corner and the returns rack. Each needs its own status or location in the records. Adding display pieces to sellable stock, or showing damaged goods as normal stock, makes a branch's variance look smaller or larger than it is. If these areas are written on separate lines in the count, the branches are compared on equal terms.

How to compare branches

To put the figures side by side, use the variance rate: the number of items with a difference divided by the number of items counted. An illustrative case:

• Branch A: 420 items counted, 6 with a difference, a rate of 1.4 per cent;
• Branch B: 380 items, 19 differences, a rate of 5.0 per cent;
• Branch C: 450 items, 9 differences, a rate of 2.0 per cent.

Branch B stands out. This is not a blame list but a pointer to where to look: perhaps inter-branch transfer slips are posted late, or the returns rack is not recorded. A rate should not be interpreted on its own before the cause is found. When comparing branches of different size, give the value as well as the rate: 5 per cent in a small branch can be a smaller amount than 2 per cent in a large one.

In short

To compare branches you must first set the same rules and then have the counting done by independent people. In store and branch stock audits StockSystem examines inter-branch transfer slips, returns and damage records and finds which movement caused the difference between the store and the head-office record.