When Did Physical Inventory Become a 4 Letter Word?

No, “physical inventory” is not on the George Carlin list of 7 dirty words (Seven Dirty Words), but it is sometimes uttered in the same breath with some of these words.  For me, it became the bane of my existence when I was coming up in the retail world in the internal audit department.  Everyone in the group dreaded when physical inventory time rolled around.  We hated the week-long trips, slogging our way from store to store, supervising inventory counts that were excruciatingly painful and eternally long.  I mean, shove some bamboo shoots under my fingernails and call it good, but don’t make me supervise those wretched inventory counts!  The newbies on the team always got the worst locations – it was like fraternity hazing, but more civilized and business-like.

But why?  How did physical inventories develop such a nasty reputation?  Where did things go wrong?  How did such a seemingly simple process become such a nightmare?  Why do store managers, district managers, loss prevention and internal audit guys hate physical inventory?  The biggest complaint from all of these groups had one common thread – the inventory audit service.  Everybody had their issues, but every one of the groups had a gripe about the inventory service.  Turns out, the inventory audit service wasn’t coughing up a whole lot of “service”.  The top complaints offered up: 

  1. 1) Seems like they don’t know what they’re doing
  2. 2) They never have enough people
  3. 3) All these counters seem like they’re tired and disinterested in what they are doing
  4. 4) They don’t respond to any of our requests
  5. 5) The counts are way off.

serv·ice –noun 1.  an act of helpful activity; help; aid: to do someone a service. The performance of any duties or work for another; helpful or professional activity.

The physical inventory, an essential process for a retailer, is now viewed as a painful exercise because of the lack of “service”.  It wouldn’t be so bad if the inventory service did their job better.  Who has heard that one before?  I used to say it all the time.  “If we could find a better inventory service, this whole process would be so much easier.  It ain’t brain surgery.”  Fast forward to today and the issue remains the same – crappy service.  Technology advances have leveled the playing field as far as those big calculators hanging off their hips.  Talk to all the inventory services out there – they all use essentially the same technology to count.  It all comes down to service; or it should, right?

"Quality in a service or product is not what you put into it.
It is what the client or customer gets out of it."- PETER DRUCKER

Don’t let physical inventory become a dirty word in your organization.  Find an inventory audit company that offers great customer service and take the dirty words out of the equation.  Poor customer service isn’t unique to inventory audit companies, you can get poor customer service just about anywhere these days.  Ask your current inventory service what they do to ensure great customer service. 

Consider the following questions:
  1. 1) Do they understand your corporate culture?
  2. 2) What do they do to fit the needs of your organization?
  3. 3) Do they ask for feedback from your store management?
  4. 4) Ask them to provide details about how they train new auditors to work in your stores.
  5. 5) What do they offer in the way of customer satisfaction guarantees?

If you don’t get answers that you’re comfortable with, then shop around.  Lousy customer service can have a negative impact for an organization.  It can affect the accuracy of counts, the time spent to complete a count, and the labor hours reconciling reports in the back office.  The organizational costs are both direct (inaccurate counts) and indirect (misallocated labor hours), but in all cases, costly.  Invest the time to find the right inventory service, leave the dirty words onstage with George Carlin, and get the customer service you deserve.

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