At 6:30 a.m. on a recent chilly morning, the crew arrived to count every candlestick, every rug, every knickknack scattered artfully around Levin Furniture's spacious Monroeville store.
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| John Beale, Post-Gazette "Spike" Aspinwall uses a bar code scanner to take inventory of accessories at Levin Furniture in Monroeville. Some say innovations such as radio frequency identification, or RFID, tags could make physical inventory counts almost obsolete. Click photo for larger image. Move over barcodes, here come the RFIDs |
Every year, as dependably as diets follow a too-rich round of Christmas parties, inventory season arrives for retailers recovering from the holiday selling binge. Some, like Levin, count the goods more than once a year. But all across the country, every item in almost every store is checked annually, a necessary check for tax, budgetary and financial purposes.
It is a rite as old as the first merchant and the first tax collector. In the past decade, technology has changed everything about it, and changed nothing. Bar codes and scanners allow every pencil and light bulb to be tabulated but the chore of collecting that information still requires warm bodies not averse to a little hard work.
There is talk that innovations such as the radio frequency identification, or RFID, tags being designed to give each item its own unique number could make physical inventory counts almost obsolete. But that technology still has issues.
Besides, there is no substitute for the old-fashioned, hands-on audit, said Dick's Sporting Goods spokesman Jeff Hennion. "It's critical for us to do that physical inventory as well."
Retailers lose as much as $46 billion annually to problems such as employee theft, shoplifting and vendor errors, according to a 2003 study by Ernst & Young. Sometimes the goods are there, just not in the system accurately. Perhaps a tag was missing on a red T-shirt, so the clerk scanned a blue one to get the right price. The bigger the store, the more items on the shelves to tally. It can, frankly, become tiresome.
Companies may bring in outside teams to do the grunt work or close the gates and set all-hands-on-deck to do the job. "I think this is the first year I haven't been asked to help out," laughed Lazarus-Macy's spokeswoman Ellen Fruchtman, who works in the division's Atlanta offices.
Dick's brings in RGIS Inventory Specialists, a Michigan company founded in 1958 by taking inventory with pencils, clipboards and a few adding machines. The operation now has more than 400 offices worldwide, including two in Allegheny County and more around the region.
As anyone who has seen the January and February ads for post-inventory sales knows, the first couple of months after Christmas are the most intense. Retailers are taking stock following what is typically their biggest sales period and preparing their tax filings, said Ron Colaizzi, district manager for the RGIS office in Pine.
During January, his office alone may send in teams to sites in the county's Northern climes to do as many as 30 to 50 inventory counts a week, paying dozens of college students and homemakers a few bucks above minimum wage to scour warehouses, grocery stores, tiny boutiques.
Colaizzi, who followed his father into the business, knows how much things have changed. A great innovation in the company's early days were 30-pound adding machines with a crank on the side. The devices might be set up inside a grocery cart and pushed around a store dragging an extension cord stuck in the closest wall.
"That was for us the first form of electronic inventory," he said. RGIS's initial customers tended to be small grocery and convenience stores. Typically, clients wanted a total dollar value of the inventory, although the team might be asked to do a more detailed listing of a few departments such as the frozen food section or the cigarette aisle.
Calculators began to shrink, allowing the counters to hang them on straps around their necks, perhaps attached to a belt-attached battery pack powered by four clunky D batteries. Workers move on from writing down numbers to punching in six-digit codes.
Finally, in the late 1980s and early 1990s, scanners that could automatically read bar codes came into common use. Information could be fed into laptop computers quickly and reports generated to show discrepancies with the store's records.
These days, RGIS teams may have scanner guns attached to their fingers that can be squeezed to take a reading. Data may be sent from the dairy department to the computer set up in the canned goods section using radio frequency technology.
Some things have not changed. The majority of assignments are done before stores open or after they close, although growth in 24-hour stores can make that challenging.
A few retailers have invested in time-stamping technology that records when an item was tallied and reconciles that with any sales made during the typical four- to six-hour process.
Taking inventory still requires careful, sometimes tedious, canvassing of the sales floor.
Levin's inventory control coordinator Karon Bowser, who works all around the 11-store chain based in Smithton, assigned a mix of regular inventory staff and personnel from the Monroeville store to do the recent accessories count.
Five teams of two people each fanned out across the dining area, the youth furniture section, living rooms, office and bedroom settings, even the clearance department. One person held a scanning gun to wave over barcodes while a second followed behind to put an apple-green mark on the tag to avoid double counting.
"Accessories are the hardest because there are so many of them," said Bowser, as she worked her scanner over lamps and books in the office section, setting off a steady beep, beep, beep.
Levin accessories buyer D. Aspinwall, who prefers to be known as Spike, was recruited to help in part because, as a 20-year veteran, she knows all the items and because she bought most of the pieces being counted.
"What's the name of this?" someone yells, holding up a bedspread. "Tropic Isle," she answers almost automatically.
Bar codes speed the process but there are still things that do not go according to plan. In this relatively new store, a number of items do not have codes at all, so the staff carefully writes those pieces down on a slip of paper.
Aspinwall and her teammate, Gerri Metsger, wrestle down a decorative wooden boat with cloth sail that must stand about 5-feet tall, only to find no code. "The big boat," mutters Aspinwall, writing down the description as she stands on a couch in her stocking feet, carefully avoiding nearby ceramic lamps.
Sometimes an item will carry both a manufacturer's bar code and a store tag, which confuses the electronic reader. Unrecognized codes show up on the discrepancy report.
Furniture stores, unlike hardware stores, rarely have the goods lined up in nice rows. The teams work carefully over, under and around to try to avoid missing anything. "Oh, God, there's way too much stuff in this clearance center," groaned Aspinwall. "Whose idea was it to put accessories in clearance?"
The five teams finished the count by 9 a.m., leaving Bowser to load the information into her laptop and then generate a discrepancy report that she and Aspinwall will work through the rest of the day. Downloading data from each scanner gun takes 40 seconds and more beeps.
The final tally for the 2 1/2-hour project: 4,896 pieces.
As for whether those after-inventory sales really have much to do with the annual inventory process, Colaizzi figures it is probably just a good excuse for a sale, sort of like Presidents Day or Memorial Day.
Lazarus-Macy's Fruchtman said post-inventory sales at her chain do come directly after the count has been completed. There is usually plenty of holiday and winter merchandise that needs to be moved out to make way for incoming spring orders, she said. "It gives us the opportunity to clear the floors."