These are the activities, which ensure that the Store Operations go on in a smooth fashion. As explained before, these activities are usually not visible to the customers.
Receiving Stock
The activity of receiving consists of checking of merchandise by comparing the supplier’s invoice and a shipment’s physical contents against the original purchase order, inspecting the incoming shipments for defects and recording any disagreements on the purchase order or the terms and conditions of it.
This is usually a three-step activity as explained:
- Inspecting shipments: The first step in inspecting incoming merchandise is a visual inspection of the exterior of each package to determine whether the package has been damaged (crushed, punctured) or opened (broken seal). All these activities are noticed and action taken accordingly.
- Verifying shipments: The receiving clerk makes several verifications after inspecting the shipments. The purchase order is used for verifying the completeness and correctness of the entire shipment. The number of cartons and weight of each carton is extensively used with most retailers. However this may vary from retailer to retailer depending upon its business & the concerned policies.
- Logging shipments: To facilitate and organize the processing of incoming shipments, each shipment is logged in a receiving record and assigned a receiving number. This record follows the shipment through the next steps of the merchandise handling till it reaches the final shelves.
In this activity, the receiving clerk does an invoice check, quantity check and quality check where the store’s quality check team will get involved.
Price Tagging
Tagging is the activity of affixing or marking individual items with a price tag and other identification information for stocking, controlling and selling. This activity consists of two separate activities as explained below:
Marking Systems: The first system used for marking merchandise is Source Marking, wherein the retailer authorizes the manufacturer or supplier to mark the merchandise before shipping to the store. Pre-retailing is the system where the selling price of the merchandise is decided before it is purchased. The price is recorded on the store’s copy of the purchase order so the store’s marking personnel put the selling price on the merchandise as soon as it comes through the doors. Store marking is the system where store personnel mark all the merchandise after the entire receiving activities are completed. These three marking systems vary from a retailer to another depending upon the business and other factors.
Merchandise Display Management
Displaying takes place in the individual store and involves moving merchandise to the sales floor for presentation, or to the stock rooms for storage. For reordered merchandise, merchandisers may use the same sales displays defined for original orders. The use of mannequins, props, lighting and audio-visual effects is quite common in this activity.
Stock Taking
Every store carries a certain amount of stock on hand as a part of the store’s inventory. This stock is counted and checked on an ongoing, regular & periodic basis. This activity is extremely important since the amount of stock carried by each store adds up to give the entire inventory carried by the retailer.
In older systems, each and every piece of merchandise which is inside the store was counted physically. This activity was usually done on a periodic basis. (at times after a fixed period.) However, with the advances in Information technology, this activity is online in some retail chains. This online system is based on the basic principle that whatever has entered the store and not been sold is being carried by the store as stock.
Stock Valuation
Stock valuation is the activity wherein the entire stock covered by a retail store is valued. This is done using a variety of ways. Many retail chains use the cost price of the merchandise for calculating the value of the inventory carried by the store at any given point in time. Others use the selling price of the inventory for valuation. This activity is carried on as a parallel activity to the stock taking activity.
The end result of this activity is that each store knows how much of money is stuck up in inventory in a given store, as well as across the chain.
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