Perform Stock Control Procedures - Information

Contents Page Number

Receive and Process Incoming GoodsThe Receiving BayChecking StockCalculating Stock Price

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Rotate stockRotating StockExcess StockSafe Lifting techniquesStock Control Manual

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Participate in stocktakePreventing discrepancies at stocktakeElectronic stock recording equipmentPreparation for stocktake

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Reorder stock 4

Completing a dispatch 6

Key Terms and ConceptsComplete the table 8

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Perform Stock Control Procedures

Introduction

This unit involves the handling of stock in a retail environment. It encompasses the receiving of stock, processing incoming stock, rotating stock, participating in stocktakes, reordering stock and dispatching goods.

Critical aspects of assessment

Evidence of the following knowledge and skills is considered essential to demonstrate competency in this unit:

consistently applying store policies and procedures, industry codes of practice, relevant legislation and statutory requirements in regard to stock control

consistently applying safe work practices in the manual handling and moving of stock according to occupational health and safety legislation/regulations/codes of practice

interpreting and applying manufacturers’ instructions with regard to handling stock and using relevant equipment

receiving and processing incoming goods and dispatching outgoing goods according to store policies and procedures

rotating and reordering stock and maintaining stock levels according to store policies and procedures

assisting with stocktaking and cyclical counts according to store policies and procedures interpreting and processing information accurately and responsibly.

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Receiving and Processing Incoming GoodsGoods that arrive at the store need to be received and processed correctly.Receiving goods involves checking that the number of cartons delivered corresponds with the delivery docket. Processing involves unpacking the goods, checking and validating them, and then dispatching them to the right area or department.When working in the retail industry, you need to know how to process goods that are delivered to your store.

Refer to MegaMax's Stock Control Manual. This manual describes the policies and procedures for receiving and processing delivered goods.

The receiving bayStock that arrives at your store comes to the receiving bay. The receiving bay at a department store like MegaMax is the delivery dock at the back of the store where trucks pull in to unload cartons. A small store like MaxSurf may not have a delivery dock. Instead, the goods are received in the reserve at the shop.The receiving bay must be kept clean and orderly so that stock can be brought in and processed quickly and efficiently.

Stock receiving area The area where goods are delivered to a retail store is generally referred to as the dock. It can also be referred to as the delivery bay, the delivery dock, the loading dock or bay. Regardless of the term used, and even if it is only a small space on the floor, this area should be kept clean and tidy as much as possible. There are a number of reasons for this:

Unpacking stock safelyStock that has been delivered must be unpacked safely and the packaging disposed of appropriately, according to your store's procedures. The procedures for doing this can be found in your workplace manual.

Safety (OH&S) Boxes, cartons, packing materials, trolleys and other obstructions are trip hazards. Keeping the stock receiving area clean helps prevent goods becoming soiled (dirty) and stops staff

becoming dirty. Dirty staff and dusty, grubby looking goods on the shelves look bad and create a negative impression for the customers.

A tidy receiving area means that when goods are delivered they can be easily identified, mistakes will be minimised and checking the deliveries is made easier.

Shelving should be kept tidy so that goods can be placed directly on them. Goods and cartons should not protrude where they can be knocked over or damaged.

If accidents occur, spills should be cleaned up straight away so that staff do not slip on them or walk the liquid into other parts of the store.

Equipment such as pallet jacks and trolleys should be stored safely when not in use.

Security The delivery area door should always be kept locked when not in use to prevent unauthorised entry

and the possibility of theft. All cartons should be checked for goods, flattened and disposed of as soon as possible to prevent

waste and theft.

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Checking stockWhen a delivery arrives, the driver will present a delivery docket with the goods. The retailer needs to check that the store and address on the delivery docket are correct. Then the number of cartons received must correspond with the number of cartons on the delivery docket. The retailer also counts the cartons before signing for the delivery.The next step is to confirm that these goods were actually ordered and that every item ordered has been delivered. The store sends a purchase order to order the goods and the supplier sends an invoice with the delivery. The invoice lists every item in the delivery.Goods that have been unpacked need to be checked against the purchase order and invoice. If the information in the purchase order matches the information in the invoice, the store can pay the supplier. If not, then the store needs to withhold payment and inform the supplier.

Sample purchase orderA purchase order is sent by the retailer to the supplier to order goods.

Cronulla Surf DesignSurf Road, Cronulla, 2230

9523 3030

Purchase Order Order No. 889From: CSD

To Supplier: Rip CurlBells RdTorquay, 3033

Description of Goods Codes Quantity Unit Price TotalBlack Hooded JumperSize 10

B3265 10 $35 $350

Black Hooded JumperSize 12

B3265 8 $35 $280

Black Hooded JumperSize 14

B3265 10 $35 $350

Subtotal 10% Store Discount Total

$980-$98$882

Order by: Mark Authorised by Manager: Lauren

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The suppliers name and address

Store address to confirm who is making the

order

Discount given to stores who place larger orders

Names to confirm who is ordering the goods and authorisation

A clear description of goods, codes, quantity, unit price and total price.

Recording stock levels

When goods have been delivered, checked and received, they need to be recorded so that the store can maintain accurate figures of the stock levels.

Stores will either record these stock levels electronically or in a stock book You will record the goods that have been delivered and checked on this store stock system chart.

Calculating the selling price

After you have recorded new stock in the store stock system chart, you need it priced so it can be put out on the shelves to be sold. Each store will have its own pricing policy.

The Selling Price of a product is determined by adding the Markup to the Cost Price of the product. You may have to add the Goods and Services Tax if this tax applies to the product.

The Cost Price includes:

the cost of the goods less any discounts from the supplier

plus freight charges.

Markup includes:

a percentage of your store's operating costs

plus a profit.

The Goods and Services Tax (GST) is collected by retail stores on behalf of the government. The GST is 10% of the selling price. It is added to many goods to determine the final Selling Price that goes on the ticket.

GST is added to most retail goods but excludes basic foods, some over the counter medicine and some public health goods.

Here is the procedure to use when calculating the Selling Price of a product:

1. Start with the Cost Price of the product.2. Add the dollar value of the Markup.

3. Then add the GST to get the Selling Price.

Note: GST does not apply to all goods, so you may not have to add the GST to all products to calculate the Selling Price.

The following exercise shows you how to calculate the Selling Price of merchandise based on the Cost Price, Markup and GST.

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An example of calculating selling price

We've just processed a delivery of video cassettes. This is how you calculate the Selling Price for this item.

Let's start with the Cost Price.

Cost Price: $2.50 each

Then we have to calculate the Markup value to add to the Cost Price. The Markup for video cassettes is 50%. This means that we take 50% of the Cost Price, and add it to the Cost Price again.

Cost Price: $2.50 each

Calculate Markup value:50% of $2.50 is $1.25

Add $1.25 to $2.50 to get $3.75

Finally, we add the 10% GST to get the final Selling Price.

Cost Price: $2.50 each

Calculate Markup value:

50% of $2.50 is $1.25

Add $1.25 to $2.50 to get $3.75

Add GST 10% of $3.75 is $0.37

Add $0.37 to $3.75 to get $4.12.

This is the final Selling Price of the video cassettes. This may then be adjusted to $4.00 or $4.25 to fit in to the store's pricing policy.

Calculating the markup percentage

Sometimes, you may be required to calculate the Markup percentage from the cost price and the selling price.

If GST is added to these goods you'll need to divide the selling price by eleven before using the formula. This will give you the selling price before GST was added.

Here is the formula you would use:

Selling Price - Cost Price x 100 = Markup %

Cost Price

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Applying price labels to stock

After the final price has been calculated, you'll need to label the merchandise.

Some stores have an individual price ticket for each item. Other stores use barcodes on the merchandise so that the price is displayed on the shelf ticket.

Storing and retrieving stored goods

Once the goods have been priced and ticketed they will need to be put on the floor for selling, or stored in an appropriate place.

If the goods are stored in a reserve, they will need to be retrieved easily when required.

These things need to be considered when storing goods:

Easy access by sales staff. Occupational Health and Safety issues.

The amount of room available.

These issues will vary depending on the type and size of the retail store

Using a requisition form

In a large store like MegaMax, staff must complete a Requisition Form before stock is dispatched from the reserve to the department. This will ensure that:

stock is accounted for at all times to avoid theft the goods are dispatched to the correct department

accurate stock figures are provided.

Here is a sample Requisition Form if you would like to examine one.

Cronulla Surf DesignSurf Road, Cronulla, 2230

9523 3030

Requisition Form

Department : ClothesDue in Department: 9am Wednesday Morning

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Name of department requesting stock

Time day and date the stock is required

The amount of stock to be delivered

Description Code Quantity

Black Hooded JumperSize 10

B3265 10

Black Hooded JumperSize 12

B3265 8

Black Hooded JumperSize 14

B3265 10

Requested by: Mark

Rotate Stock

When merchandise is sold from the fixtures, it needs to be replaced with stock from the reserve. Customers can't buy merchandise from the reserve, so the fixtures must be filled regularly.

Stock rotation means that older stock is displayed for sale before the newer stock. This ensures that the store always has clean, fresh merchandise to sell and therefore maintains an appealing image to customers.

Performance criteria for rotate stock Carry out stock rotation procedures for merchandise and wrapping and packing materials

routinely and accurately according to store policy.

Place excess stock in storage or dispose of in accordance with store policy.

Maintain safe lifting and carrying techniques in line with store occupational health and safety policy and government legislation.

Stock rotation scenarioThis scenario is set in MegaMax. By working through the scenario, you will find out how stock rotation works.It's 2 pm. You've had a busy morning tending to customers. Then, you receive a call from your supervisor, Janie, in the Cosmetic DepartmentHello. Can you help me out here? This 'Body Sparkle' line seems to be very popular. We've almost sold out of the stock on the fixtures. I need you to get more stock from reserve to fill this fixture.You head to the reserves to get more 'Body Sparkle' to fill the fixture Here is the stock from the reserve that you can use to fill in the fixture in the Cosmetic Department. Which carton would you choose?

Body Sparkle -Delivered: 17 April

Body Sparkle -Delivered: 24 June

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Description of stock to be delivered

The code for the item that is to be delivered

Name of person requesting stock

Rotating stockYou take the carton marked Delivered: 17 April to Janie.

That's the correct way of doing stock rotation - the older stock is always put out on sale before newer stock.This is called FIFO, (First In First Out) FIFO applies to all merchandise. Goods that have been sitting on fixtures for a while become dirty, tatty and unsaleable, so you need to make sure that older goods gets sold before newer goods.All merchandise should have date codes so staff can identify the oldest stock either in the reserve or on the fixtures.The FIFO principle also applies to wrapping and packing materials that you use in the store. Old, tatty wrapping detracts from the store image. It also makes the goods within the wrapping appear aged and unsaleable.Now we need to put the stock on the fixture. The older stock that you took from the reserve is newer than the stock already on the fixture. The stock that is already on the fixture should be sold first so you need to move all the old stock to the front of the shelf then place the new stock behind the old stock.Dealing with excess stock What do you think should happen to the excess stock that is kept to fill the fixtures that become empty in the store?Dealing with excess stock at MegaMaxWhat do you think should happen to the excess stock that is kept to fill the fixtures that become empty in the store?

Here is a list of suggestions from the sales assistants at MegaMax about what to do with excess stock. Decide if each suggestion is suitable or not.

Staff Member Idea Good Suggestion?You can store small items like scarves, pantyhose, cosmetics, etc. in drawers or cupboards under the fixtures for easy access.

Yes, this is the method used in some stores where there are drawers and cupboards under the fixtures

Put excess stock behind the point of sale area, or counter, for easy access.

This is not a good idea. The point of sale area will very untidy and crowded with sales assistants trying to serve customers and gain access to stock.

Keep excess stock on the shelves in the back reserve.

Yes, this is a good idea. This keeps the reserve tidy and the goods are still accessible when needed.

Stock in the reserves should be labelled with prices, codes, dates, and/or barcodes

This is a good idea. The stock is then ready to use and staff can read the dates to see which stock to take first.

You can send excess stock back to the supplier until it is required

Linda's idea isn't a good one. The stock might be needed soon and it is a waste of delivery costs to send it back. If there was too much stock delivered in the first place then the ordering system needs to be reviewed

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Store perishable goods according to temperature requirements.

Yes, this is definitely a good idea. This is important, as stores must not sell food that has perished or become contaminated.

Using safe lifting and carrying techniquesStock replacement is a daily activity in retail stores. It can involve lifting and carrying merchandise. It's important that you use the correct manual handling techniques when lifting and carrying to prevent injuries.

These manual handling techniques should be followed even for lifting and carrying stock that isn't large or heavy. It's the technique that's important, not the size of the item.Here are some tips for moving large items1) Work with a partner2) Use a trolley3) Use machinery, like a conveyor belt, a hand-driven forklift, or a trolley jack, if it's available

Stock Control Manual

! All employees must understand the procedures for stock control within MegaMax. These systems must be followed to minimise the risk of loss of stock and to ensure that accurate company records are maintained.

1. Receiving Goods Into The Store· All goods must be delivered to the receiving bay at the rear of the store.· Deliveries will only be received one at a time, whether they are hand delivered or by transport. This will ensure deliveries are not confused and will minimise the opportunity for vendor theft.· The receiving bay must be clean and tidy at all times to ensure occupational health and safety standards are met. This is a working area where staff must be able to work efficiently and operate equipment safely.· The receiving officer must check the deliveries received before signing the delivery docket. Check for:Ø Damaged cartonsØ Goods that have been tampered withØ Possible interference with goods during deliveryØ Incorrect name and address of store· Correct manual handling techniques must be used (use the 10 Steps of Manual Handling outlined below). Staff must either get assistance from another staff member when moving heavy stock or use the trolley. Only authorised staff members may use the hand driven forklift.· Goods must be stored appropriately as soon as they have been received.

10 Steps of Manual HandlingAlways follow the 10 Steps of Manual Handling when lifting or moving stock.1. Assess the load.2. Get close to the load.3. Set your feet apart for balance.4. Relax your knees.5. Lower your body and bend your knees.6. Lower your head.7. Get a firm grip.

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8. Raise your head and look ahead.9. Straighten your legs.10. Lift, and then turn your feet before walking.

Unloading stock in the receiving bayYou will need to use special equipment in order to unload stock.TrolleyUse a trolley to move small cartons.Flat trolleyUse the flat trolley to move larger cartons.Hand-driven forkliftThe hand-driven forklift is used to move larger stock, such as those on palettes.

2. Processing Of Incoming Goods Goods will only be processed after the receiving officer has signed the delivery docket.· Remove the goods from the packaging and place on the benches in the receiving bay. This is where the goods can be counted and checked against the invoice.· Use the safety knife to open all packaging. Remember to cut away from your body to prevent accidents. Don’t use your hands or teeth to rip open cartons or bags.· The packaging must be disposed of in the rubbish bin or the recycle bin, as appropriate. MegaMax has a policy of recycling wherever possible.· The cartons must be immediately crushed and placed in the compactor.· Invoices must be checked thoroughly before goods are sent to the reserve or the department. Tick the correct listings on the invoice or note changes that need to be addressed.Check for:Ø Correct name and address of storeØ Correct merchandise has been deliveredØ Correct quantities have been deliveredØ Correct price has been chargedØ Goods and Services Tax is correctØ Discounts are correctØ Freight charge has been added correctlyØ All totals are correctØ Any incorrect, damaged or out-of-date stock· Goods that are incorrect, damaged or out-of-date must be returned to the supplier. A completed claim form must accompany the goods on dispatch.· All goods must have a price ticket attached before they are stored in the reserve or department. Tickets must be attached firmly and placed on the merchandise so they can be easily seen, in accordance with store policy.· When the goods have been priced they can be stored immediately in the reserve, unless special requirements apply. Each department has its own storage area within the reserve. Special storage requirements:Ø All jewellery is stored in the department for securityreasons.

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Ø Observe regulations for storage of hardware goods. Dry chlorine should not be stored near liquid or powder chlorine. Nor should it be stored near oil, heat beads or firelighters. Wear gloves when handling chemicals. Store in a well ventilated area.Ø Fragile goods must be given adequate storage space to prevent breakages.· Goods may only be sent to the department when a Requisition Form has been authorised from that department. This Requisition Form must be recorded against the store stock system chart to ensure accurate stock records are kept at all times.Goods that have been received and ticketed must be recorded on the store stock system chart. This will ensure that accurate stock records are kept at all times.

3. Stock RotationAll employees must follow the FIFO system of stock rotation.FIFO = First In First OutThat means the goods that are first into the store must also be the first to go out of the store with the customer. Check all dates before you put stock onto the fixtures.Customers can’t buy merchandise from the reserve, so the fixtures mustbe filled regularly.

4. Stocktake ProceduresStocktaking is usually done yearly and half-yearly as it is a legal taxation andaudit requirement. Stocktake figures are also important for determining company profit.It is important that all store records are accurate.

Stocktake also depends on efficiency in the daily routine, such as housekeeping, accurate use of retail equipment, and correctly completed documentation. Accurate stock records depend on accuracy every day.All MegaMax staff members are expected to participate in stocktake.Preparation for stocktaking:· Staff will be notified of cut off dates for order deliveries, and shelf filling cut off time.· All stock records must be brought up to date.· Ensure that all stock items have a ticket with the correct information.· New staff members must be advised of stocktake procedures.· All customer special orders must be completed.· Lay-bys must be separated.· Goods on loan must be retrieved.· Floor plan prepared with fixture numbers for shop and the reserve.· Numbered stock sheets allocated to each area.· Stock lists prepared.Procedures on stocktake day:· Every item of stock must be counted.· The stock count is then written on the numbered sheet.· All stock sheets must be added and extended accurately.· All checks made the previous day must be maintained.· Check that all documentation is completed prior to stock take.· At least 10 per cent of the counts should be spot checked to ensureaccuracy in counting.· Once finalised, the stock sheets must be signed off and verified.MegaMax floorplan:

5. Reordering Stock

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Sufficient stock must be on hand to supply customer’s needs but MegaMax does not have the resources to store large quantities of stock. Minimum stock levels should be checked regularly to maintain an adequate supply.Stock may only be reordered by authorised staff using MegaMax ordering systems. If you are not authorised to reorder stock, speak to your manager if stock levels are running low.Sometimes stock that has been ordered does not arrive as expected.What to do when this happens: -1. Find out why this has happened. Check the invoice and phone the supplier if necessary.2. Notify staff members of the reason for the delay so they can inform customers when necessary.3. Place a ‘Temporarily Unavailable’ ticket on the shelf, if appropriate.

6. Dispatching GoodsAll goods that need to be sent back to the supplier must be done according to store procedure.1. Identify the reason for the returns – damage, soiled, oversupply, incorrect goods.2. Package goods carefully so as to avoid damage in transit.3. Complete a credit request form.4. Check that the documentation has been completed accurately – name, address, reason for return, pricing, and special delivery instructions.5. Goods for dispatch must be held in the designated area of the reserve.This will ensure they are returned and processed promptly.

Introduction to Participate in StocktakeStocktake is the actual counting of every item of stock in the store. These figures are then compared to the store's 'book stock' records to show a store's gross profit. Book stock is a record of stock kept on the company's books. These days, many stores would keep electronic stock records.

Stocktaking is usually done yearly and half-yearly as it is a legal taxation and audit requirement. Stocktake figures are also used to:

Determine the total dollar value of a brand or a Department or Store. Identify slow sellers and best sellers in a product range. Provide figures for profit and loss statements.

Therefore it is important that all records are accurate.

Other types of stocktake include: Full stocktake - Every item of stock in the store is counted yearly or half-yearly. Cyclical stocktake -Part of a store's stock is counted regularly. For example, perishable foods

may be counted weekly. Spot check - Stock in a specific area may be checked because of a discrepancy in the figures.

Example of Stocktaking; Ten tubby teddiesThis story illustrates the importance of accurate stock records in a retail store.

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This is more than just a story about annual stocktake. It also demonstrates how stocktake depends on efficiency in our daily routine, such as housekeeping, accurate use of retail equipment, and correct documentation.

Let's follow the Teddies' journey from the MegaMax receiving bay to the Toy Department. The mishaps in this story actually happen in real stores.

Ten Tubby Teddies are $20 each. Value = $200

When they arrive in the store they are recorded in a stock record book

In time, when they've all been sold the figures will go to the office…

… and the stock records should balance.

But this will only happen if the Ten Tubby Teddies have been cared for correctly and the sales have been processed accurately.

Now, let's have a look at what actually happened.

When Tubby Teddy number one was sold, the sales assistant accidentally pressed $2.00 on the cash register instead of $20.00. This sale was not recorded accurately.

Tubby Teddy number two became very dirty because everyone was too busy to dust the shelf. The sales assistant reduced the sale to $5 but forgot to record the markdown in the book

This sales assistant has lost another $15 for the Toy Department. Click on the scales to see what happens to the balance of the stock received and the recorded sales now.

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Tubby Teddy number three got lost in the Advertising Department. No-one remembered that it was taken there to be photographed for the catalogue, so it wasn't counted at stocktake.

Another $20 sale has been lost for the Toy Department. Click on the scales to see what happens to the balance now.

The other seven Tubby Teddies were all sold and their sales recorded accurately.

But, by the time stocktake came around the damage had been done.

Preventing discrepancies at stocktake

What could you do to prevent discrepancies at stocktake, like the one you've just seen with the Tubby Teddies? Here are suggestions to ensure stock records are documented accurately.

Question; The sale of Tubby Teddy number one was registered as $2 instead of $20. How could the sales records have been corrected?

Answer; Cancel the incorrect sales transaction according to store procedures then process the sale at the correct price

Question; The price of Tubby Teddy number two was reduced because it had become damaged. How would you record this transaction?

Answer; Record this transaction in the Markdown Book

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Question; Tubby Teddy number three was loaned to the Advertising Department. How could you keep track of stock on loan?

Answer; Record loans to other departments in a book, or electronically.

Electronic stock recording equipmentStocktake can be done manually or electronically. Most stores use electronic equipment for their stock records. Staff can order stock, keep track of inventory, list prices, record markdowns, and record sales by this method. Electronic stock recording equipment scans a barcode to register the item. The quantity and price are entered by the user.

Electronic equipment relies on the use of barcodes. Barcodes are a coding system used in the retail industry to identify a range of items such as products and cartons. In fact, barcodes can be used to identify any item that needs to be tracked

Preparation for stocktakeThe following stocktaking principles apply to all stores whether the stores use electronic equipment, or not;

Stock records must be accurate. Stock must be counted.

Louise has allocated two tasks for you to do:1. Prepare a floor plan with fixture numbers for the shop and the reserve.2. Check that stock records are up to date in the Markdown Book.

You have to prepare a floor plan with fixture numbers for the shop and the reserve.Each fixture and each shelf must be numbered so that there is no confusion about which stock has been counted, and which hasn't. It would be chaotic if some stock was counted twice and other stock not counted at all. Also, the numbering system helps to identify areas to be spot checked.Louise will allocate certain fixtures to each staff member at stocktake. This way, she'll know that the stock on every fixture will be counted.

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