How to Reduce the Stock Damages in Retail Store - Retail Management

Importance of Reducing The Stock Damages

Stock damages have a huge bearing on our store operations, these are the damages which occur in the store due to negligence or by accident through internal staff or through customers. Damages may happen knowingly or unknowingly.

• They have a negative impact which leads to:

- Loss in sales

- Drop-in margins and profits

- Congestion of backend space (warehouse) and distribution system

- Reduces productivity

HOW: REDUCE STOCK DAMAGES

° To reduce stock damages we need to have efficient processes laid down for:

- Warehouse management

- Stacking of merchandise

- Handling perishable goods

Warehouse Management: Effective Security

• The warehouse must be secured by sealing/ security all unnecessary outlets like:

- Open drains

- Vents

- Damaged walls

•     This prevents rodents from accessing the warehouse

WAREHOUSE MANAGEMENT:

ADEQUATE RACKING CAPACITY AND BINS

• Adequate racking capacity

- Reduces the damage of merchandise as they are not stacked one on top of another

- Enables easy access to goods as per the first out (FIFO) method

- Eg: The most effective are the slotted angle steel racks which allow for height adjustment depending on the type of merchandise to be stored.

• The advantage of adequate bins in the warehouse helps in

- Storing fragile merchandise safely

- Saving space as bins can be placed on top of each other without any load being physically put on the merchandise

WAREHOUSE MANAGEMENT: STORING OF MERCHANDISE

• The basic principles:

- Goods must be placed on top of each other only up to the extent that they do not get damaged

- Fragile merchandise must be stored in a manner so that

1. It ensures easy accessibility
2. Heavy merchandise is not placed above it

- First | First Out ( FIFO) method must be followed

   

First In First Out ( FIFO) for movement of goods is important for

- Merchandise management

- Ensuring goods that have arrived first is sent to the floor first

- Ensuring old stocks are sold first hence the store is not stuck with old stocks

- Perishable stocks as food have expiry dates

• Principles to be followed for storage of merchandise

1. Record the date of inwards on each carton with a marker pen
2. Cartons must be directly stored and the racks or its contents emptied into bins
3. Fragile merchandise must be stored in bins eg glassware
4. Items that can tear or break eg snakes, biscuits, detergent packets must be stored in bins
5. Heavy merchandise must be stored in the lower racks

• Storage space must be segregated into different sections for easy retrieval
  
  
• Merchandise of a similar category must be stored together

1. Big Bazaar- apparels, electronics, and general merchandise must be stored in different sections
2. Food bazaar- personal products, soaps/ detergents and consumable must be stored in different locations
3. A segregation plan must be followed even when there is excess merchandise in the warehouse so that
4. Merchandise can be located easily
5. FIFO can be followed
6. Ordering/ replenishment of merchandise can be easy after a close look at the physical stock

• Effective FIFO system can be followed if:

1. Every carton is marked with the date of inwarding
2. Merchandise stacking in the shop floor follows a sequential order
3. From left to right
4. From bottom rack to top rack - This must be followed even when merchandise is moved from the warehouse to the store, stocks must be removed from the left side and the bottom rack.

SHOP FLOOR STACKING OF
 MERCHANDISE

• Stacking of merchandise on the shop floor must adhere to the followed guidelines:

1. General stacking principles

2. Stacking principles for fragile items

3. Stacking principles for food items

Proper stacking on the shop floor reduces stock damages

The following must be adhered to:

Items must not be dumped one on top of the other. Merchandise must be easily accessible to customers, thereby preventing breakage. 

Re- shelving of merchandise: The store staff must ensure that the items picked up and displaced by customers, are returned to their appropriate places. This makes the shelves messy and untidy and increases the chance of damaging the stock

° Stacking of fragile items:

These fragile items must not be dumped in a bin as there will be possibility of damages to the products.

Products must be neatly stacked on a shelf every time.

Similar items must be placed one behind the other- it helps easy accessibility

The height of shelves must be appropriate to ensure that items are not stacked one on top of the other to fill up the gaps

There must be adequate space between the merchandise to enable easy access

For specific merchandise, multiple stacks are created (eg: plates)

MERCHANDISE STACKING ON THE SHOP FLOOR

. Stacking of merchandise on the shop floor must be done in a manner so that:

It is non-intrusive to customers

It does not block customers traffic

Customers do not stumble on the merchandise

This can be avoided by placing signage's in front of the stacked merchandise

Stacking of snacks (eg wafers, Indian snacks)

Each packet must be placed one behind the other on the shelves

Must not be stacked one on top of the other as the merchandise can get crashed

Stacking of biscuits and chocolates

Biscuits must be stacked in the form of a pyramid on the rack

Chocolates in cardboard boxes must be placed one on top of each other

Stacking of sacks of grains, large- size detergent powder packets

Must be stacked on top of each other. Stacks must not be too high as the lower bags can get damaged due to the excess weight

For varying sizes stacked together, the heavier ones must be at the bottom

The warehouse and floor staff need to be alert to any tear/damage in packing as the merchandise can spill out.

Isolate bags as soon as a tear is noticed so that further loss or damage does not take place. For grains, weigh the packs to ascertain the quantity of loss if there is any damage happened.

Damaged grain sacks procedure:

Refill with any uncontaminated spill and sack must be sewed

Contaminated spill:

• Do not refill the sack, dispose of the spilled material
• If loose material of the same quality is available to refill the sack after the store manager/ assistant store manager's approval
• Documentation must be done for the above process
• If loose material is not available seal the sack to prevent further loss and keep it aside for returning to the vendor

Damaged/broken branded packets procedure- eg detergent powder

The damaged pack must be sealed to prevent further spillage.

Damages product to be kept aside for returning to the vendor

Stacking of tetra packs, liquid bottles ( Soft drinks, water, etc)

Must be stacked one on top of the other, in some cases, this can damage the lower bottles hence: The items can be stacked along with the carton by placing the cartons on top of each other

Procedure for perishable items:

• These require special attention because of the short expiry period
• These get spoilt very quickly if not stored properly, hence the following must be adhered to:
• All stores and warehouse must have the necessary equipment i.e. cold storage in the warehouse and chill station in the store
• All equipment must function properly with the temperatures set with the appropriate range
• Relevant store staff and admin to monitor the temperature and ensure items are stacked as per the capacity
• Annual maintenance contract must be done to ensure regular servicing
• The FIFO method of stacking must be adhered to for perishable items

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