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Managing Inventory Shrinkage, Theft, & Discrepancies
Updated

This article discusses best practices for managing inventory shrinkage and inventory discrepancies. 

  1. Perform full market inventories every month, using the Physical Inventory tool in AMS. 

  2. Once a month, run the Account Profitability report for each market, as product discrepancies will appear in the Over/Short column. 

  3. Use the Not Inventory Today feature in the Tablet Inventory tool. This will help ensure you do NOT miss any products. 

  4. Ensure that all route drivers and staff understand how to use all the product adjustments. Doing so, ensures data integrity. 

Regularly performed market inventories can help you identify the source of shortages (potential loss). 

Using Reports to Identify Inventory Discrepancies 

The following reports can help you manage inventory shrinkage and discrepancies in your market. 

Head to the AMS Reports to learn about the many reports you can run in AMS.

Account Profitability Report 

Query market locations each week and review the values in the Over/Short column. Sort this column to view the largest over/short totals. 

Table 1Account Profitability Report 

Location 

Gross Sales 

Discounts 

Promotions 

Taxes 

Deposits 

Net Sales 

Costs 

Stales 

Over/Short 

Gross Profit 

GpPct 

 7 DSHS Kelso 

 676.83 

0

0

16.18 

0 

660.65

323.85 

-22.13 

-93.68 

220.99 

33.4503 

10 Microchip Technology 

1868.49 

0 

2.48 

 0 

13.65 

1854.84 

954.42 

-23.93 

-82.04 

794.45 

42.8311 

01 States Industries 

1191.29 

 0 

3.49 

0 

9.85 

1181.44 

585.32 

-8.27 

-78.44 

509.41 

43.1177 

2 International Air Academy 

524.21 

0 

0 

15.41 

0 

508.8 

239.41 

-0.89 

-73.72 

194.78 

38.2822 

4 Solarworld SA5 

2155.81 

0 

12.74 

0 

0 

2155.81 

1101.54 

-78.97 

-72.58 

902.72 

41.8738 

5 Albertsons Distribution 

2552.41 

0 

1.88 

0 

32.15 

2520.26 

1313.52 

-3.17 

-71.77 

1131.8 

44.908 

12 Johnson Controls 

2706.51 

5.85 

24.96 

0 

28.35 

2678.16 

1296.87 

-13.84 

-71.57 

1295.88 

48.3869 

 3 Linear 

1562.24 

0 

8.07 

41.68 

0 

1520.56 

765.42 

-4.89 

-69.81 

680.44 

44.7493 

01 Seneca Sawmill Notimill 

905.8 

1.94 

6.96 

0 

7.3 

898.5 

444.95 

-19.56 

-66.05 

367.94 

 40.9504 

10 Red Cross Portland 

1602.67 

0 

7.35 

0 

9.35 

1593.32 

794.18 

-6.25 

-63.89 

729 

 45.7535 

 

Inventory Adjustment Summary Report

  1. Run this report for the same timeframe as the previous Account Profitability
  2. Look for the market locations that had the larger over/short
  3. Click the over/short cells to see adjusted products and sort the products by the largest to smallest adjustments. You can now see the exact products that led to the shortages
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  4. Note the product at the top is 5-hour Energy. Negative number data can result from warehouse errors, driver errors, or potential
    mceclip2.png
    Table 2: Product Adjustment Analysis
    Reason Name Qty Cost Date
    Short 5-Hour Energy Pink Lemonade -6 -9.36 2016-08-19T09:18:39.4970000
    Short Frozen - Hot Pocket Pepperoni -4 -3.2 2016-08-18T10:19:09.1930000
    Short Sconza Yogurt Pretzels 2oz -4 -2.12 2016-08-19T09:18:23.8000000
    Short 5-Hour Energy Pomegranate -4 -6.24 2016-08-19T09:18:46.1770000
  5. Rerun the report for the previous month for the same location that was missing six 5-Hour Energy Pomegranate items, and then query the product under the product descriptions. Notice this product was not short last month; therefore, this could be a potential warehouse miss-pick error.
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Cart Cancelled Report

If you determine shortages are due to potential theft, then use the Cart Cancelled report. The most common way a consumer steals is through tapping Cancel at the kiosk. This report can help you save time, because you can review camera footage based on the timestamp.

  1. Locate the Cart Cancelled report in the AMS REPORT CENTER, in the Unprocessed Transaction pane.
  2. Run the Cart Cancelled report for the timeframe and sort the data by the higher priced items.
  3. Document the transaction date and timestamp.
    mceclip4.png
  4. Remotely login to the kiosk’s DVR and view the timestamp transaction.
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    mceclip7.png

Reviewing Security Camera Footage

If you need to download a large amount of video, then swap the DVR and view it off site. Viewing large amounts of footage of high theft location can be slow and tedious, depending on the network connection.

Bringing the DVR back to your office enables you to view the footage easily, and swapping out the DVR prevents losing any security coverage. Use this best practice for drilling into locations with consistent, higher quantity shrinkage.

Sending Security Footage to Client Accounts

  • For shorter/smaller video files, download the video and share with Dropbox, or another similar file-sharing service.
  • For longer/larger video files, download video to a thumb drive.
  • For very long/extra-large video files, you may need to loan the DVR to the client for review.

Use Samsung Remote to download the video directly from the DVR to an attached USB storage device. Remote DVR access works well on most dedicated Internet connections. DSL or cable Internet is the best, as it offers the greatest stability and few data transfer limitations. 4G wireless solutions work well, if data connection is stable; will use .6 to .9 GB of data per hour. Remote DVR Access does NOT work well behind many corporate firewalls. It is either blocked outright or forced to go through a relay server with limited bandwidth.

Or, you can attach a USB/wireless mouse to the DVR, and then do the following:

  1. 1. Click Menu.
  2. Select Backup and click Enter.
    mceclip8.png
  3. Use the arrows to set the Start and End date and Time.
    mceclip9.png
  4. Set the type to SEC.
  5. Click OK.

Additional Ways to Reduce Potential Theft

  • Place surveillance signs—in the markets notifying customers that the market activity is being monitored.
  • Billboard Display feature—is an inexpensive tool that will help both detour theft as well as drive sales with suggestive food images and promotional advertising.

Managing Theft 

You must perform regularly scheduled full market inventories to identify product discrepancies. 

  1. In AMS, click REPORT CENTER, and in FINANCE pane, click Account Profitability or in the Inventory pane, click Inventory Adjustment and review the value for the Over/Short cell to help recognize markets that have the largest discrepancies. 
  2. Compare the over/short adjustments made on previous market inventory to the most current. 
  3. Look for higher priced items, such as 5 Hour Energy drinks that are consistently short in the market. 
  4. In AMS, click REPORT CENTER, search for the Cart Cancelled report, run it, and then sort the data by the Items Total from highest to lowest. Focusing on the higher priced items will make a bigger impact to your bottom line. 
  5. Retrieve the transaction date and timestamp for questionable transactions. 
  6.  Remotely login to the kiosk DVR and locate the transaction to determine if the product was returned to the market.
  7. Some cases may require that you swap out the DVR. 
  8. Often, market discrepancies are attributed to theft. Theft does occur in the markets, but many times the shortages are due to warehouse miss-picks or pushes. Management should randomly spot-check picked orders WITHOUT notice, to ensure that the warehouse staff is accurately picking orders. Select a couple of orders daily AFTER they have been pushed to the markets, and then check ALL snack, beverage, frozen, and fresh food zones.