Monitoring your store's IRA on a monthly basis is an important step to keeping IRA on track. There are two primary reports used for tracking IRA: Inventory Accuracy Scorecard (Review email, Charts.pdf, page 3) and your Shrink Report (Review email, Shrink Report.pdf, Adjusted Shink section). Your Inventory Accuracy Scorecard will show high-level trends including your last month's IRA sample (plot) and your three month average IRA. The Shrink Report lets you dig into SKU-level detail so that you can see which SKUs were involved with impacting IRA.

If you are following the Level 1 Checklist then this is where you will find the info to fill out your "IRA Plot and Avg" box.

• We assume you are already familiar with the Inventory Accuracy Scorecard, if not then this page should help reacquaint you. 

  • Take a look at the example chart below to see the red colored IRA trendline (red bullet #3).
  • Bullet #1 shows last month's IRA sample results, here we see an 84% plot.
  • Bullet #2 shows the last three month's plots averaged together as your Level 1 IRA metric at 78%.

  Our example store's last month's plot is 84% and it's 3-month average is 78%, this is what their Level 1 Checklist would look like.
  Ideally, you will see tight grouping in your monthly plots (they should be within +/- 5 points of each other). Wide spreads between monthly plots indicate a significant trend or can indicate inconsistent counting and/or lack of variance research.

  

• If your IRA is trending in a way you don't like or don't understand then you need to get to the SKU-level to see what's going on and fix it. SKU-level detail is found in your Shrink Report (Review email). If you are unfamiliar with this report then more info can be found here. A word of caution, if you are feeling overwhelmed then this is not the time get bogged down trying to fully understand the Shrink Report, that is for another time (Level 3 - Shrink).  
  
  Your goal right now with the Shrink Report is narrow: to find the variances listed that are impacting your IRA metric.
  
  1) Open your Shrink Report and scroll down to the Shrink Report - Adjusted section (It will say "Adjusted" at the top of the page, usually starts on page 3 or 4).
  2) Look for variances listed as CS RC in the Reason column. CS RC stands for Count Sheet, Random Count, which mean these SKUs were listed on last month's Count Sheet as RC Count Types.
  3) Each SKU listed counted against your IRA metric last month. If these variances were not double-checked by your Inventory Coordinator or you suspect they were not carefully double-checked then now is a good time to recount these SKUs to get to the bottom of your IRA issue.
  
  After your verification count, make a note of each variance cause:
  

  • Bad count - indicates lack of variance variance research by IC and sloppy initial count (see IC Role )
    • In nearby bin? - indicates sloppy dept. maintenance and sloppy counting and variance research.
    • In top/back stock - indicates back stock labeling issues and sloppy counting.
    • Item returned close to date counted - indicates return bin not checked or emptied prior to counting.
  • Correct Count
    • Open ITR for the SKU and see if there is any unusual activity.
    • Did the count fix a previous counting mistake? - indicates lack of variance research with first count
    • If the item was returned recently, was there a cashiering mistake? - indicates cashier training issue.
    • Was it stolen? - can you look to security camera footage to find out who stole it? 
    • Other? - is there another reason, list it in case there is a pattern developing.

  You will not be able to ascertain the cause for every variance, especially if it is a high sales volume SKU. But do your best to figure it out. For many stores, it won't take long to see a variance pattern emerge. If there is not a noticeable pattern and most of the counts are verified as correct then you might be looking at a store with a lot of initial QOH issues.  In this case, continue to follow your Level 1 Checklist and you might end up looking at a full store count when indicated.