Thirteen Missing Detergents and a Short Oil Delivery
On the 1st of the month, a 6,000 sq ft store in Nashik runs a cycle count on 20 SKUs. For 'FreshWash detergent 1 kg', the system shows 144 units, while the shelf plus stockroom count gives 131 - a variance of 13 units, about ₹2,197 at the ₹169 selling price. In the same count, 22 packs of 'GlucoBite biscuits 250 g' carry a best-before date 18 days away and are still at the front of the aisle. In the stockroom, the newest delivery of detergent has been stacked in front of the older cartons. Separately, yesterday's cooking-oil delivery came with a challan for 120 cartons but only 96 were unloaded; the delivery person said the rest would come 'next trip' and asked for a clean signature. The store's shrinkage target is 0.6% and the month is running at 1.1%.
1. Before anyone adjusts the system quantity by 13 units, what checks would you run, and what could explain the gap? What should happen if nothing explains it?
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Why not adjust first: an adjustment hides the cause and teaches the team that counts do not matter. The system is only corrected once the physical reality is confirmed and the reason is known or ruled out.
Checks, in order:
- Recount with a second person, including top shelves, the back of the stockroom, the returns cage, the damaged-goods bin and the trolley bay. Off-cuts and opened cases are common hiding places.
- Check open documents: a GRN raised but stock not yet put away, a transfer to another branch not posted, a return to supplier pending pickup, or a promotional display unit that was never booked out.
- Check the last three weeks of transactions for this SKU: bulk bills, staff purchases, a bill where quantity was keyed as 1 instead of 14.
- Check damage and expiry write-offs - were 13 units thrown away without a write-off entry?
- Check receiving history: was a carton of 13/14 units short-received at the dock and signed clean? The number 13 is suspiciously close to a case pack.
- Consider theft or scanning error only after the above; look at the shelf for empty packaging, and review CCTV if the store has coverage.
If nothing explains it: post the adjustment with the reason 'unexplained shrinkage, cycle count, date, counted by X, verified by Y', escalate to the store manager, and put this SKU on weekly count. Never write it off as 'system error' without evidence.
2. What are the options for the 22 packs of biscuits with 18 days to expiry, and how would you choose between them? What discipline failed here?
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Options and how to choose:
- Sell faster at the front of the aisle - the cheapest option, because it preserves full margin. With 18 days left there is still time for normal sale if the stock moves at even 1–2 packs a day.
- Bundle or secondary display - pair with tea/coffee at a small visible saving; useful if the rate of sale is slower than the days remaining.
- Markdown near expiry - apply at a point where the pack will clear before the date, not after. Markdowns should step up as the date approaches, not jump to one deep cut at the end.
- Return to supplier / credit note - if the supplier agreement allows returns of short-dated stock; check the terms before assuming.
- Charitable donation - permitted in some companies, but only with approval and only while still in date, never after.
- Write-off - the last resort, with the reason recorded.
The test: compare the daily rate of sale with the number of selling days left. If 22 packs sell at 3 a day, do nothing except move them forward. If they sell at half a pack a day, markdown today.
The discipline that failed is FEFO (first-expiry-first-out). The stockroom has the newest delivery in front of older cartons, and the shelf has old stock at the back of the aisle. Receiving and shelf-filling must place the shortest-dated stock at the picking and buying point, with a date check at every fill.
3. Describe exactly what the receiving staff member should do about the oil delivery, at the dock and afterwards, and why signing a clean challan is such a serious mistake.
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At the dock:
- Count before signing. Never sign a challan on trust. Count the cartons, check condition, and compare against the purchase order and the challan.
- Record the shortfall on the delivery document itself - 'Received 96 of 120 cartons; 24 short' - with the driver's signature and the time. Keep a copy and photograph the annotated challan.
- Do not accept a 'next trip' promise as a clean signature. If the driver will not sign the discrepancy, note it on the challan, inform the manager immediately, and mark the delivery as part-received in the system.
- Post the GRN for 96 cartons only. The system must reflect what physically exists.
Afterwards:
- Inform purchasing and the supplier in writing the same day, with the challan copy, and ask for either the balance stock or a credit note.
- Three-way match the PO, the GRN and the supplier's invoice before any payment is released. If the invoice says 120 and the GRN says 96, the invoice is wrong and must not be paid in full.
- Follow up on the 24 cartons; if they do not arrive within the agreed time, convert them to a debit note.
Why a clean signature is serious: the signature is an admission that 120 cartons were received. The store then pays for 24 cartons it never got, and the stock record is inflated, which creates a false shortage later that some other employee will be blamed for. The paper trail is destroyed, and the loss becomes impossible to prove.