Loss Prevention, Auditing & Safety Conference 2009 Title Sponsor:
Cycle counting as a foundation to exceptional shrink performance
Tim FisherBest Buy
Best Buy
Consumer electronics store 1,023 stores domestically Over $40 billion in revenue 140,000+ associates
Family of Brands
Why cycle counting is important to Best Buy
accountability
Leadershipengagement
Awareness/Communication
InventoryIntegrity
Best Buy’s“Shrink”Program
Why cycle counting is important to Best Buy
Physical Inventories only provide insight once a year
Cycle counting provides the how behind inventory integrity on a weekly basis
Cycle counting creates transparency Gives visibility to losses which provides motivation for stores to act
Provides not only insight into losses but drives in stock Allows count corrections to adjust inventory
How Best Buy cycle counts
Counts are done weekly and reconciled against current on hands Stores have a dedicated “counter” to perform counts and reconciliation
Focused on high loss and high turn items Eighty percent of counts are centrally driven
based on actual physical inventory trends Twenty percent are locally driven based on
market and individual location identified needs Anticipated shrink rate is calculated and
published weekly Down to the department and subclass level
Cycle counts
National Shrink Barometer
What Best Buy get from cycle counts
On a dollar for dollar basis the night of Physical Inventory we have already identified between 90% and 96% of our shrink.
Benefit in in-stock/inventory integrity Creates confidence for assume receipt of DC
trailers and approved drop ship vendors Facilitates PO/invoice matching to speed
reconciliation and vendor payment Reduces chargeback's and invoice disputes
In stock position
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
0.00
0.50BBY Shrink