Retailers Must Triple Check Their Shipments

Retailers in these challenging times face razor thin profits,
escalating expenses and leaner customer traffic. We all
agree that 2009 will be a stormy year for the smaller retailer.
One aspect of your business that can devastate profits is in the
area of inbound shipments. One organization assumed that
vendor shipments were accurate and store employees simply
did a cursory review of larger items that came in.
After conducting a detailed audit of all shipments and all
items for all stores, the retailer determined that shipments
were shorted by as much as 4 percent. Over the long run,
paying a vendor 4% for goods never received can put a
retailer into bankruptcy in our new economy. Most retailers
are so pressed to get goods out on the floor, that scrutiny of
shipments is at best a haphazard exercise. Junior employees
may not appreciate the critical importance of close examination
of waybills to the smallest of items in a shipment if the store
manager has not voiced concerns over shipment accuracy.
Studies conducted on internal warehouse to store shipments
fared a little better with an average 1% to 2% error rate. Lower
volumes and a vested interest to make sure the shipments are
accurate are likely factors that create better accuracy.
How accurate are the shipments that YOU receive? When was
the last time you really scrutinized your shipments for accuracy?
What would short shipments as high as 4% do to your organization?
Too many retailers assume that shipments are accurate, however
in these tight times, everyone is trimming costs including employees,
double checking, failsafe stations and more, within the distribution
system. The retailer ultimately faces the loss if vigilance is not
exercised at a high level in our new economy.
It's likely that the higher the volume, the higher the errors as well.
Short shipments will really hurt retailers over the long run in an
era where we can ill afford these devastating losses.
Step back and look at all your shipments under a microscope!

Take Action Today:
1) Discuss short shipments with all employees and introduce
tighter receiving procedures for all stores.
2) Consider having staff double check shipment receiving
procedures. One employee receives and the other audits
the paperwork and unit count.
3) Get management to periodically spot check shipments.
4) Audit inter-store transfers as well. Large stock balancing
exercises have proven to also be largely inaccurate.

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