Processing the Shrink Report each month is a key component to achieving and maintaining your Operational Level 3 - Shrink metric. The Shrink Report is made up of five sections detailing SKU-level net shrink for the month:

• Mango will exclude certain categories when measuring your Operational Level 3 - Shrink metric. SKUs classified below will be separated from your adjusted shrink listing and placed in the excluded section of your Shrink Report.

  • Separating shrink into two baskets (excluded and adjusted) allows for more focused variance research and more meaningful and consistently measured shrinkage from period to period and store to store. The goal is to remove noise, expected, and controlled variances (which can sometimes be overwhelming) to leave an adjusted listing of variances caused by theft, breakage, or where the cause is unknown.

    Excluded shrinkage covers noisy classes where there is little procedural consistency from store to store, where shrinkage is controlled or expected, such as closeouts and live goods, or where shrink is offset by sales to dump SKUs.

    Adjusted Shrink	Excluded Shrink
    Theft	Bulk Goods
    Breakage	Closeout
    Unknown	Live Goods
    	Lumber
    	Store Supplies

  Both adjusted and excluded shrink are listed (separately) in your Shrink Report, but the adjusted portion is only used in your Operational Level 3 - Shrink metric.

  Print the table below here.

  Excluded Shrink Classifications
  Category	Class	Fineline	Other	Notes
  Fasteners	561, 564, 566, 578, 580	- -	- -	If your store classifies fasteners differently (Class HIL for example) then Mango will not pick these up as Excluded unless there is a SKU match to Ace's catalog.
  Store Supply	- -	- -	Location 1 = STORE	SKUs with a Location Code of STORE or where a SKU matches Mango's internal Store Supply database will be treated as Excluded. Consider utilizing Credit PO's (or Keep Stock Info=N) to minimize shrinkage noise.
  Coupon	- -	- -	- -	SKUs with Coupon signatures are treated as excluded shrink. SKUs flagged with Coupons signatures are shown in your Exceptions.pdf report (Store Supply and Coupons, usually page 2).
  Lumber	- -	- -	Record Type = L	Shrink to L - Lumber SKUs is treated as Excluded due to the amount of noise in this category. Lumber enabled stores can find Record Types in the upper-left corner of Inventory Maintenance.
  Live Goods	752	- -	- -	Live goods can have significant shrinkage which is expected in this category.
  Keep Stock = N	- -	- -	IMU Codes Tab	When a SKU's Keep Stock Info status is changed from Yes to No and the SKU had a QOH value, the loss in inventory value is shrink. Your Eagle system will not list the SKU in RPH but Mango will pick up the variance and list it as excluded.
  Store Closeout = Y	- -	- -	IMU Codes Tab	Shrink due to closeout activity is treated as excluded.
  Rental	--	--	Location 1 = RENT	Rental SKUs are treated as excluded shrink.
  Bulk - Keys	510	- -	- -	If your store classifies keys differently (Class KEY for example) then Mango will not pick these up as Excluded unless there is a SKU match to Ace's catalog.
  Bulk - Glass	151	- -	- -	Bulk Goods tend to be noisy and shrink is offset by sales to a corresponding dump SKU.
  Bulk - Acrylic	152	- -	- -
  Bulk - Wire	310	- -	- -	Bulk Goods tend to be noisy and shrink is offset by sales to a corresponding dump SKU.
  Bulk - O-rings	404	- -	- -
  Bulk - Tubing	466	- -	- -	Bulk Goods tend to be noisy and shrink is offset by sales to a corresponding dump SKU.
  Bulk - Plastic Pipe	478	- -	- -
  Bulk - Screen Repair	546	- -	- -	Bulk Goods tend to be noisy and shrink is offset by sales to a corresponding dump SKU.
  Bulk - Chain	570	- -	- -
  Bulk - Nails	573	- -	- -	Bulk Goods tend to be noisy and shrink is offset by sales to a corresponding dump SKU.
  Bulk - Window Screen	575	- -	- -
  Bulk - Rope	762	- -	- -	Bulk Goods tend to be noisy and shrink is offset by sales to a corresponding dump SKU.
  Loc6: MGOEX	- -	- -	Location 6 = MGOEX	Setting a SKU's Location 6 to MGOEX will treat all shrink to the SKU as excluded. This setting can be used to classify a range of SKUs in your store if the above classifications are not suitable for your organization.
  Stop Sale	- -	- -	- -	SKUs with active recalls or vendor stop sale notices are treated as excluded. Ideally, these items would be removed from inventory via a credit PO since a credit is typically issued from the vendor.

• Variance Worksheet - The 20 most important variances for your inventory coordinator to research and resolve. Once filled out, a meeting should be scheduled with the manager or owner to resolve theft, personnel, and procedural issues.

• Adjusted Shrink - Theft, breakage, and unknown variances. Top items from this listing should be researched by your inventory coordinator but a meeting with the manager or store owner is not necessary unless there is an obvious theft, personnel, or policy issue.

• Excluded Shrink - Variances to bulk, lumber, closeout and other controlled and noisy shrinkage. This listing should be reviewed by your inventory coordinator.

• Defective Shrink - SKUs returned through your point-of-sale system as defective or variances logged as defective.

Steps to process the Shrink Report:

1.  Print, research and resolve SKUs listed in your Variance Worksheets (usually page 1 & 2).
2.  Review your Adjusted Shrink Section, print pages with variances you would like to research.
3.  Review your Excluded Shrink Section, print pages with variances you would like to research.
4.  Review your Defective section.

The Variance Worksheet highlights top variances from your Shrink Report so that extra research can be performed to find and resolve the root cause. Your Inventory coordinator should complete the worksheet (he/she should already have knowledge of these variances) and work with his/her manager or owner to resolve personnel, procedural or theft issues.

Selections focus on Hot Shrink (high-shrink SKUs), WD Alerts (theft-for-cash returns), and top dollar shrink/swell for the month. Items on your Variance Worksheet will show on your Adjusted Shrink listing in italics with an asterisk preceding the SKU's description, this lets you know the variance is already being researched when looking at your Adjusted Shrink listing.

Processing the Variance Worksheet is a critical step in controlling your Operational Level 3 - Shrink metric. If you haven't already performed your Operational Level 3 Checklist then we suggest familiarizing yourself with shrinkage and Mango's Level 3 Metric.

Steps to process your Variance Worksheet

1. Print the variance worksheet (usually page 1 & 2 of your Shrink Report attached to your Review Reports email).
2. Perform Variance Research - find and resolve the root cause (Inventory Coordinator).
3. Inventory Coordinator should then meet with manager/owner to resolve root issues.

• If you are already in the habit of reviewing variances in PIP before finalizing then processing the Variance Worksheet should be simple because you'll already know the story behind most of the SKU's listed. However, you may elect to spend more time researching Alerts, Hot, or other variances that somehow slipped through the cracks. With a little investigation, many of these variances can be corrected or resolved, and in some cases, the root problem can be permanently fixed.

  From time to time, you will see something that doesn't look quite right. Don't be afraid to dig in: look at vendor invoices and packing slips, talk to your staff, and consult video. Theft involving outside vendors, internal staff, customers, and delivery personnel occur regularly. Professional skepticism and gut intuition go a long way! Treat these worksheets as you would a cashier's drawer; if a cashier turned in a drawer $100 short then you'd spend a few minutes of your time investigating the cause, so do the same with shrink!

  

  The Chain Saw shrink (above) has been selected by Mango for extra variance research. One Chain Saw was subtracted from inventory (SHRINK UNITS = -1) with an inventory reduction of $280.96 (SHRINK COST = -$280.96). It was last sold at the beginning of the reported month and there is a Research Hint showing Multi+ which indicates this item may be displayed in multiple locations in the store. You can read more about variance research and research hints in Operational Level 3 - Shrink training - Variance Research.

  Clearly, this variance is not acceptable in any store and theft needs to be ruled out, or the process causing the variance found and fixed.

  To help your manager or owner understand what happened with this SKU, you see four checkbox options and space to write in a few notes. An asterisk precedes the SKU's description to denote it's placement in the Variance Worksheet (this will be helpful when looking over your Adjusted Shrink listing in the next help section).

  Checkboxes - Select the checkbox that best matches the reason or resolution for the variance.

  • Theft - check this if you can prove or HIGHLY suspect theft.
  • Breakage - check this box if the item was broken and vendor credit cannot be obtained. 
  • Corrected - if the variance was reversed after a recount.
  • Other - the variance's cause is still unknown after reasonable research.
  Notes Box
  

  • Write a brief description of the variance reason and any possible resolutions. 

  CS WD Alert - Special Case.

  

  When a Count Sheet Watchdog Theft Alert (CS WD Alert) SKU is selected for research, two additional check boxes will appear to help guide your research. This variance fits the signature of a theft-for-cash scheme, which needs to be ruled out.

  • Defective rung as Return - The item returned was defective but the cashier returned it to stock: selected the R code during the return (which adds 1 to quantity on hand) instead of the D (defective) code. (in this case, sell the item back then ring it through as defective, and then reverse the variance in PIP).
  • Theft for cash - The item was likely stolen and returned for cash. If the store is employing Eagle's Returns Validation feature then a store policy is likely being violated or there is an internal theft issue.

• Use the help below to guide your variance research steps.
  
  Both Operational Level 1 - IRA and Operational Level 3 - Shrink are hard to achieve without good initial inventory counts and tight inventory procedures. Variance research provides critical feedback into the quality of your inventory counters, cashiers, and store procedures. In most stores, the inventory coordinator handles this responsibility where he/she acts like a detective, selects a handful of variances, and tries to find the root cause. When a root cause is found then he/she will work with the store manager or owner to resolve the issue.
  
  Variance research goals:

  • Ensure staff is able to obtain a good count the first time (no sloppy counters nor sloppy shelves).
  • Look to find and fix gaps in store procedures dealing with the movement of inventory.
  • Look to find and fix cashiering errors so that sales analysis and order point calculations are maintained.
  • Identify significant store or vendor mistakes.
  • Detect theft: internal, customer, vendor, and delivery.
  • Accurately measure Operational Level 1 - IRA and Operational Level 3 - Shrink.

  • Few stores have the luxury to research every counting variance, that's why limiting counting processes (Mango best practices) and getting reliable first counts are critical first steps. Your task is to pick the most impactful counting variances and then audit them to discover the root cause.  Once the cause is identified then fixing its source will help reduce future variances and in turn make research easier the next time. 
    
    The inventory coordinator is responsible for three variance research processes:
    

    1. PIP research (ongoing throughout the week.)
    2. Shrink Report - Variance Worksheet (monthly).
    3. Manager/Owner meeting to review Variance Worksheet (monthly).
    How much time should I spend?

    It depends on the dollar amount and nature of the variance. High-dollar shrink (+/- $100) should be resolved to completion including video if possible. Or if you think you might be on the trail of discovering theft or a procedural mistake then you should spend a lot of time since the problem is not likely to go away. However, there will be many variances where finding the root cause will be difficult. For example, shrinkage to 5 cans of 13322 Great Stuff insulation may be difficult to exactly pin down due to its high sales volume. 

    • Variance research can be time consuming, however, when done right, people and processes causing inaccuracy are quickly identified and corrected; the result is a more accurate and efficient store. Stores employing variance research can systematically detect and correct: 

      • Inventory theft (internal, customer, vendor, delivery.)
      • Store or vendor mistakes.
      • Sloppy counting or shelf condition causing bad initial counts.
      • Untrained or sloppy cashiers.
      • Store procedures causing inaccuracy.
      We believe variance research is a critical inventory accuracy process and you'll agree once you give it a try!

  • Quantity-on-hand variance research is the most important accuracy process in your store. PIP research is typically performed by your inventory coordinator where he/she diligently scrutinizes variances in the Physical Inventory Posting (PIP) viewer before variances are finalized. You should set dollar thresholds $15.00 (for example) that trigger mandatory research when the variance dollar amount is
    exceeded. Stores employing good variance research can quickly find and fix the root cause of inaccuracy.
    

    • It all starts with a good initial count. Our How to Count video will help your team understand the importance of counting better. Folks giving you frequent bad counts need to be identified and trained! If additional training fails then counting may not be the best task for that individual and their counting responsibility reassigned.

    • Variance research is the cornerstone of inventory accuracy. It's how you figure out and fix the process or person causing issues, and once fixed, the accuracy of your store increases.

      1) Sort PIP by the Shrinkage column you created in Level 0 - Completion (Step 1), or the Repl Cost Varinace column if it's available in your PIP viewer.

      2) Verify each variance over/under your mandatory research policy threshold ($15.00 for example)
      

      • Recount the SKU.
      • Look in nearby bins hooks for the item.
      • Look in top stock and back stock.
      • Look in return and defective bins.
      • Look in special order shelves. 
      • Look for multiple locations (clip strips, end caps, etc.)

      3) Try to determine the variance root cause 
      

      • Was it a bad count?
      • A count correction?
      • Cashiering error?
      • Receiving error?
      • Theft? 

      4) If the variance was a result of a cashiering or receiving error then fix it in MPO or POS and delete the entry in PIP. Do not use PIP to correct cashiering or receiving errors as this will skew shrink, purchasing, sales and order points.

    • You can follow the Shrink Report - Variance Research help dig even deeper.

  • If you are researching from your Shrink Report (Variance Worksheet or Adjusted list) then use the table below to pre-screen the variance. If you are researching from PIP then skip this step.

    Step		No	Yes
    1	Should it be Excluded Shrink?	Go to Step 2	Should it be treated as excluded (bulk, lumber, live goods, closeout)? Review Excluded Shrink classification to keep these items off of your adjusted shrink list.
    2	Was it deleted?	Go to Step 3	Enable delete control, review Mango's delete procedure found here.
    3	Does the Research Hint say NoRPH?	Go to Step 4	Shoot us an email if you see a lot of these, it might be a result of an errant setup involving intra-store transfers, or SEQ sequencing issue. If you only see a handful then it could be a result of an RCIN errantly picked up by Mango. Shoot us an email if it's for a large dollar amount.
    4	Move on to Module 2	- -	- -

  • The steps below will guide you through research performed on the computer. Do your best to spot the variance's cause using Eagle's ITR function so that a floor recount is not necessary.

    • If you are researching from your Shrink Report (Variance Worksheet or Adjusted list) then use the table below along with the SKU's Research Hint (if it has one) to help gain insight into the cause of the variance. If you are researching from PIP then skip this step.

      Research Hints
      Category	Hint
      AHCOM	Ace Hardware .com sales and shrink event occurred within 7 days of each other.
      BS+	SKUs in a possible back stock position exhibited by a SKU's quanitity-on-hand being greater than shelf quantity entered in Location 3.
      CS --	CS stands for Count Sheet, followed by the Count Sheet's two-digit Count Type. This SKU was listed on last month's Mango Count Sheets.
      Cashier Error?	SKUs that are commonly rung incorrectly at checkout.
      Central RSC	SKUs ordered on your regular order and delivered via UPS from a centrally located warehouse (RSC). These SKUs on your Ace purchase order are received in your computer (RRP) along with your regular order (when delivered by your regular truck) but are physically delivered later via a secondary freight carrier like UPS. Because of this, there is a lag between the SKU's quantity on hand after receipt and the SKU's physical quantity. Because of this, Central RSC SKUs should be recounted if shrinkage is experienced.
      Correction	The variance this month reverses the variance from last month.
      Defective?	Items that are commonly found to be defective. Perhaps the item was returned using “R” (Return to Stock, quantity on hand increased by one) instead of “D” (quantity on hand not changed).
      DISC	The SKU is discontinued from your warehouse. If it was zeroed out, make sure a replacement was investigated.
      Dup SKU	This SKU has an exact duplicate that only varies by case. Check your Exception report for the Duplicate SKU section which will show the duplicate SKUs.
      High Shrink Rate	These SKUs experience a high shrink rate across all stores.
      HOT	This SKU is exhibiting persistent shrink and may be a shoplifting issue or a procedural issue.
      ICM	Item was potentially a new/old SKU for an Inventory Change Management (ICM). SKUs may have been confused when counting.
      Item Setup	The SKU has a fundamental setup issue with its Order Multiple and/or Unit Multiple that causes persistent shrinkage. Check your Master Exception report Item Setup section for more information on the SKU.
      Kit	This SKU has been accidentally set up as a Kit Header. Check your Master Exception report Ket Header section for more information.
      Multi+	SKUs in multiple locations exhibited by a floor location in Location 2 field in IMU. Check the other location(s) for inventory.
      NoRPH	This SKU does not have a corresponding shrink record (RPH) in your Eagle system which indicates an imbalance in shrinkage.  Give us a call if you see many NoRPH's appearing on your shrink report. (734) 301.4510.
      Packaging?	SKUs that may have a packaging issue causing breakage.
      RCIN	A recent RCIN was performed on the SKU. RCIN SKUs are commonly counted incorrectly because dissimilar-looking items have been combined into the same SKU in the back office but the SKUs have not been combined on the sales floor.
      Receive Error?	SKUs commonly received incorrectly. For example, NS (Non Stock) displays and other items received as one package with many different SKUs inside.
      Rep. SKU
      Store Use?	SKUs which are used commonly throughout the store, e.g. toilet paper, packing tape, snap knife. These items should be charged through the store house account rather than run through your shrink system.
      Theft?	Items that are commonly stolen. e.g. candy, snacks, drinks, liquid laundry detergent.
      UPC x-link	Items listed on your Master Exception Report with a UPC cross link. These items will exhibit shrinkage until the x-link is fixed via your Master Exception Report.
      Zeroed	the SKUs quantity on hand was likely set to zero, usually during your weekly shooting outs process.

    • In this step, you want to follow quantity-on-hand movement in chronological order to try and decipher if a variance was caused by a previous counting error, purchasing error, cashiering error, etc.

      1. Open Eagle Browser.
      2. In the Launch Bar, type in ITR and press Enter.
      3. Type in the SKU you are researching, press Enter.
      4. Change the Starting date to be at least 5 years ago.
      5. You now have a historical viewer that shows the detail of every quantity-on-hand change.
      Look for these issues as you scroll through the viewer:

      Issue Name	Problem	Resolution
      Count Correction	Was it miscounted 4, 6, 12 months ago?	Look for a pattern: are a lot of variances caused by one person? Is back stock not labeled, are there a lot of multiple locations? Is one department showing up a lot more?
      Return vs. Defective	Did a cashier return this item to inventory "R" when it was actually a defective "D" item?	This is a common variance cause because an R-type return adds one to quantity-on-hand while a D-type return does not. The cashier who carelessly selected "R" for the defective returns is the culprit. See Cashier Testing.
      Rung-out multiple times.	Occasionally, a cashier will ring a transaction more than once due to system error or the cashier will start over without voiding the transaction. Look for identical transactions within a short time period.	Resolve the network/system communication error. Cashier training.
      RCIN	Is there RCIN activity for this SKU? When SKUs are combined (RCIN) dissimilar looking items (and UPCs) can share the same SKU, make sure all the combined items on the sales floor are being counted together as one SKU.	Look at the UPCs assigned to the SKU and recount the shelf keeping an eye on combined items that may be orphaned on their old SKU'd locations.
      Recent Purchase	If the variance exactly offsets a recent purchase then the items may be misplaced in the store or did not get physically received into the store. Consult your video system if you can to see if the product ever made it to the shelf location.	A recount is a good idea when this happenns. If it is a large-ticket item then interview staff and consult video. There is a lot of theft that can happen between the back of the delivery truck and your back door.
      Lack of a recent sale	Often, a customer will accidently take a special-order or hard-to-scan item out of the store without being charged. This is an honest mistake. With your knowledge of special order and customer activity, this SKU may trigger your memory.	Call the customer and charge them!
      Missing a P.O.	Sometimes a buyer short-cuts the purchasing process by adding inventory on-hands directly in Inventory Maintenance instead of creating a purchase order through MPO.	For shrink tracking and accounting purposes, all purchases need to go through MPO.
      Sent back to vendor	In an effort to save time, quantity-on-hand for items returned to the vendor are adjusted in Inventory Maintenance or PIP, rather than through a credit PO (MPO, type C).	If you are receiving credit for the items then a credit PO needs to be made.
      Store Use	Regular inventory items used for store operation and maintenance (Store Use) are either logged through Inventory Maintenance or PIP or are not accounted for at all.	Store Use items (regular inventory used for store maintenance) need to be rung at point-of-sale through the store's house account.
      Donation	Donations are taken out through Inventory Maintenance/PIP rather than a donations house account.	Donations need to be rung at point-of-sale through the store's donations account.
      Owner Use	Owner and family are taking inventory from shelves without checking out.	Owners and family need to check out through point of sale.

  • If you cannot determine the cause of a variance by looking at the computer alone then it's time to interview your staff, and then recount the SKU.
    
    Tips for discussing the variance with other associates

    • Start with Department Head.
    • Do you have any recollection of the SKU?
    • When is the last time you remember seeing it?
    • If the SKU has a recent transaction, talk to the cashier.
      • Do they remember anything strange?
      • Was it a unique transaction?
    Recount the SKU
    

    • Two sets of eyes are better than one.
      • Recount the item with the department head.
    • Review Mango's How To Count video

  • If there is a security camera in the area of the SKU, now would be a good time to consult the footage. Don't spend too much time watching video footage, your time is valuable. Determine what the likelihood of theft is for the SKU and set a time limit for how long you'll spend watching video. 

    • Look for activity on the days before the SKU was counted.
    • Do any staff members recall suspicious activity on a certain day?
    • You may need to reposition a camera if an area is seeing high shrinkage.

  • 1. Talk with your owner!
    2. Contact Ace Loss Prevention: 

    • Office: (630) 990-3353
    • RetailLossPrevention@acehardware.com

• • To save paper, you can print the Variance Worksheet pages only, usually page 1 and 2 of your Shrink Report. Just click the "Pages" button and enter "1,2" to print only page 1 and 2!

    

  Let's take a look at an example from real store (send us your example!)

  

  SKU 58070 (above) had a net variance of -11 in September and a shrink cost of -$72. After completing variance research it was determined the SKU had many up/down adjustments as well as two separate intra-store transfers. It was not possible to identify the exact root cause but it was clear, after interviewing floor staff, nobody was assigned responsibility to the back dock area after Steve retired. Jake was assigned responsibility to maintain the area and shoot outs weekly. This will help catch variances sooner so we can figure out the cause via video.

  

  SKU 7104045 (above). There was a communication issue between Jim and the customer and cashier (Lynn). Jim loaded 8 of the wrong SKU. I reversed the 8 and sold the correct SKU at point-of-sale the remaining -3 bags were unknown (probably previous loading errors or breakage).

  

  SKU 7436728 (above). SKU was shrunk -2 while shooting outs (Lynn). I found them right where they should be after a recount. Is a pattern with Lynn? Talked with her about being more careful.

  

  SKU 1310283 (above) These poles are hard to count because they look different when extended. I was able to find both of them. Talked with Angie about being careful with these when counting.

  

  SKU 1107499 (above). Found right where they should be. Guess who?

  

  SKU 2099190 (above). Talked with Ben, this looks like theft. Put a lock on the hook and moved the camera over the 4' torch section because of high theft in the area.

  

  SKU 834002 (above). The worms die before we sell them. Decided to stop selling them.

  

  SKU 42665 (above). Returned and shrunk after counted, but cashier error and theft-for-cash was ruled out during research. Probably a similar item mix-up with cashiering or previous counting.

  

  SKU 82933 (above). This was an RCIN from a little over a year ago. Probably counted incorrectly back then, finally sold out and went negative.

  

  SKU 46367 (above). Obvious counting error: entered 21 instead of 2. Should have been caught by Mike who finalized RPI that day. Talked with Mike about doing basic variance research before finalizing RPI

This section of your Shrink Report lists non-excluded counting variances for the reported month. These variances make up your Operational Level 3 - Shrink metric. The list is sorted by the greatest inventory reduction first (SHRINK COST column). Negative numbers in the SHRINK UNITS column indicate a reduction in inventory value (typically associated with theft and breakage) and positive numbers indicate inventory swell (errors and corrections). The report is processed by your inventory coordinator who may choose to meet with her manager or owner if she needs help resolving an issue like internal theft or a persistently sloppy inventory counter. 

*SKUs in italics with descriptions preceded by asterisks are listed on your Variance Research report so these items are already under review by the inventory coordinator and manager or owner.

Report processing goals:

• Pick out obvious research candidates not already on your Variance Worksheet and find and fix the root cause.
• Make sure processes causing variances (shooting outs, Mango's Count Sheets, etc.) are understood and per policy.

• Mango will exclude certain categories when measuring your Operational Level 3 - Shrink metric. SKUs classified below will be separated from your adjusted shrink listing and placed in the excluded section of your Shrink Report.

  • Separating shrink into two baskets (excluded and adjusted) allows for more focused variance research and more meaningful and consistently measured shrinkage from period to period and store to store. The goal is to remove noise, expected, and controlled variances (which can sometimes be overwhelming) to leave an adjusted listing of variances caused by theft, breakage or where the cause is unknown.

    Excluded shrinkage covers noisy classes where there is little procedural consistency from store to store, where shrinkage is controlled or expected such as closeouts and live goods, or where shrink is offset by sales to dump SKUs.

    Adjusted Shrink	Excluded Shrink
    Theft	Bulk Goods
    Breakage	Closeout
    Unknown	Live Goods
    	Lumber
    	Store Supplies

  Both adjusted and excluded shrink are listed (separately) in your Shrink Report, but the adjusted portion is only used in your Operational Level 3 - Shrink metric.

  Print the table below here.

  Excluded Shrink Classifications
  Category	Class	Fineline	Other	Notes
  Fasteners	561, 564, 566, 578, 580	- -	- -	If your store classifies fasteners differently (Class HIL for example) then Mango will not pick these up as Excluded unless there is a SKU match to Ace's catalog.
  Store Supply	- -	- -	Location 1 = STORE	SKUs with a Location Code of STORE or where a SKU matches Mango's internal Store Supply database will be treated as Excluded. Consider utilizing Credit PO's (or Keep Stock Info=N) to minimize shrinkage noise.
  Coupon	- -	- -	- -	SKUs with Coupon signatures are treated as excluded shrink. SKUs flagged with Coupons signatures are shown in your Exceptions.pdf report (Store Supply and Coupons, usually page 2).
  Lumber	- -	- -	Record Type = L	Shrink to L - Lumber SKUs is treated as Excluded due to the amount of noise in this category. Lumber enabled stores can find Record Types in the upper-left corner of Inventory Maintenance.
  Live Goods	752	- -	- -	Live goods can have significant shrinkage which is expected in this category.
  Keep Stock = N	- -	- -	IMU Codes Tab	When a SKU's Keep Stock Info status is changed from Yes to No and the SKU had a QOH value, the loss in inventory value is shrink. Your Eagle system will not list the SKU in RPH but Mango will pick up the variance and list it as excluded.
  Store Closeout = Y	- -	- -	IMU Codes Tab	Shrink due to closeout activity is treated as excluded.
  Rental	--	--	Location 1 = RENT	Rental SKUs are treated as excluded shrink.
  Bulk - Keys	510	- -	- -	If your store classifies keys differently (Class KEY for example) then Mango will not pick these up as Excluded unless there is a SKU match to Ace's catalog.
  Bulk - Glass	151	- -	- -	Bulk Goods tend to be noisy and shrink is offset by sales to a corresponding dump SKU.
  Bulk - Acrylic	152	- -	- -
  Bulk - Wire	310	- -	- -	Bulk Goods tend to be noisy and shrink is offset by sales to a corresponding dump SKU.
  Bulk - O-rings	404	- -	- -
  Bulk - Tubing	466	- -	- -	Bulk Goods tend to be noisy and shrink is offset by sales to a corresponding dump SKU.
  Bulk - Plastic Pipe	478	- -	- -
  Bulk - Screen Repair	546	- -	- -	Bulk Goods tend to be noisy and shrink is offset by sales to a corresponding dump SKU.
  Bulk - Chain	570	- -	- -
  Bulk - Nails	573	- -	- -	Bulk Goods tend to be noisy and shrink is offset by sales to a corresponding dump SKU.
  Bulk - Window Screen	575	- -	- -
  Bulk - Rope	762	- -	- -	Bulk Goods tend to be noisy and shrink is offset by sales to a corresponding dump SKU.
  Loc6: MGOEX	- -	- -	Location 6 = MGOEX	Setting a SKU's Location 6 to MGOEX will treat all shrink to the SKU as excluded. This setting can be used to classify a range of SKUs in your store if the above classifications are not suitable for your organization.
  Stop Sale	- -	- -	- -	SKUs with active recalls or vendor stop sale notices are treated as excluded. Ideally, these items would be removed from inventory via a credit PO since a credit is typically issued from the vendor.

Steps to process Shrink Report - Adjusted

1. Look through the variances and determine if any are good candidates for extra variance research.
2. Print the pages with the SKUs deserving more research.
3. Try to understand the process which caused the variance (shooting outs, Mango's count sheets, other) 
4. Perform variance research.  
5. Meet with your manager or owner to resolve the cause (if warranted).

• 

  
  

  Bolding 
  Bolded SKUs indicate the need for extra variance research. They are not listed on the Variance Worksheet and are a lower research priority, but your Inventory Coordinator should review these and pick out variances that need extra research. Variances are bolded when the shrink/swell is under/over $20 and also meet these conditions: not on the Variance Worksheet and not a correction to a previous variance. You may also see bolded CS RC (Count Sheet Random Count types) which is part of your Operational Level 1 - IRA checklist, indicating extra variance research on random counts when the store's random sample last month was below 80% IRA.
  
  Italics 
  SKUs in italics are also listed on your Variance Worksheet so are already under review. 
  
  Column - Shrink Units
  The SKU's net quantity-on-hand adjustment for the month (variance). Negative numbers represent a reduction in quantity-on-hand as in breakage or theft; positive numbers represent an increase in quantity-on-hand and are errors or corrections.
  
  Column - Shrink Cost
  The SKU's variance times its replacement cost (shrink). Negative numbers represent a reduction in inventory value as in breakage or theft; positive numbers represent an increase in inventory value and are errors or corrections.

  • If it can, Mango will show an abbreviated hint to aid variance research. The table below explains the various hints you may see.

    Research Hints
    Category	Hint
    AHCOM	Ace Hardware .com sales and shrink event occurred within 7 days of each other.
    BS+	SKUs in a possible back stock position exhibited by a SKU's quanitity-on-hand being greater than shelf quantity entered in Location 3.
    CS --	CS stands for Count Sheet, followed by the Count Sheet's two-digit Count Type. This SKU was listed on last month's Mango Count Sheets.
    Cashier Error?	SKUs that are commonly rung incorrectly at checkout.
    Central RSC	SKUs ordered on your regular order and delivered via UPS from a centrally located warehouse (RSC). These SKUs on your Ace purchase order are received in your computer (RRP) along with your regular order (when delivered by your regular truck) but are physically delivered later via a secondary freight carrier like UPS. Because of this, there is a lag between the SKU's quantity on hand after receipt and the SKU's physical quantity. Because of this, Central RSC SKUs should be recounted if shrinkage is experienced.
    Correction	The variance this month reverses the variance from last month.
    Defective?	Items that are commonly found to be defective. Perhaps the item was returned using “R” (Return to Stock, quantity on hand increased by one) instead of “D” (quantity on hand not changed).
    DISC	The SKU is discontinued from your warehouse. If it was zeroed out, make sure a replacement was investigated.
    Dup SKU	This SKU has an exact duplicate that only varies by case. Check your Exception report for the Duplicate SKU section which will show the duplicate SKUs.
    High Shrink Rate	These SKUs experience a high shrink rate across all stores.
    HOT	This SKU is exhibiting persistent shrink and may be a shoplifting issue or a procedural issue.
    ICM	Item was potentially a new/old SKU for an Inventory Change Management (ICM). SKUs may have been confused when counting.
    Item Setup	The SKU has a fundamental setup issue with its Order Multiple and/or Unit Multiple that causes persistent shrinkage. Check your Master Exception report Item Setup section for more information on the SKU.
    Kit	This SKU has been accidentally set up as a Kit Header. Check your Master Exception report Ket Header section for more information.
    Multi+	SKUs in multiple locations exhibited by a floor location in Location 2 field in IMU. Check the other location(s) for inventory.
    NoRPH	This SKU does not have a corresponding shrink record (RPH) in your Eagle system which indicates an imbalance in shrinkage.  Give us a call if you see many NoRPH's appearing on your shrink report. (734) 301.4510.
    Packaging?	SKUs that may have a packaging issue causing breakage.
    RCIN	A recent RCIN was performed on the SKU. RCIN SKUs are commonly counted incorrectly because dissimilar-looking items have been combined into the same SKU in the back office but the SKUs have not been combined on the sales floor.
    Receive Error?	SKUs commonly received incorrectly. For example, NS (Non Stock) displays and other items received as one package with many different SKUs inside.
    Rep. SKU
    Store Use?	SKUs which are used commonly throughout the store, e.g. toilet paper, packing tape, snap knife. These items should be charged through the store house account rather than run through your shrink system.
    Theft?	Items that are commonly stolen. e.g. candy, snacks, drinks, liquid laundry detergent.
    UPC x-link	Items listed on your Master Exception Report with a UPC cross link. These items will exhibit shrinkage until the x-link is fixed via your Master Exception Report.
    Zeroed	the SKUs quantity on hand was likely set to zero, usually during your weekly shooting outs process.

  • 

    It's good to review the totals at the bottom of your Adjusted listing. The totals here are trended on your Shrink & Efficiency Trend chart (Charts.pdf, Review Email).

    
    

    SKUs Changed - The total number of net variances for the reported month. The typical store should be between 250 and 400.

    SKUs Changed (down) - the number of downward variances as in breakage and theft.

    SKUs Changed (up) - the number of upward variances (quantity on hand is adjusted upwards) as in errors and corrections.

    
    

    Dollar Change - Net Adjusted Shrink dollars for the reported month. The typical store should see better than -$500 in shrinkage.

    Dollar Change (shrink) - Inventory dollar reduction attributed to breakage and theft.

    Dollar Change (swell) - Inventory dollar increase attributed to errors and corrections.

    
    

    Mango Affected  - This section shows how processing Mango Count Sheets affected shrink for the month. For some stores newly using Mango, this can be substantial.

    Mango Affected (changes) - the number of variances caused by processing count sheets.

    Mango Affected (dollars) - the net inventory change (shrink/swell) caused by processing count sheets.

• Use the help below to guide your variance research steps.
  
  Both Operational Level 1 - IRA and Operational Level 3 - Shrink are hard to achieve without good initial inventory counts and tight inventory procedures. Variance research provides critical feedback into the quality of your inventory counters, cashiers, and store procedures. In most stores, the inventory coordinator handles this responsibility where he/she acts like a detective, selects a handful of variances, and tries to find the root cause. When a root cause is found then he/she will work with the store manager or owner to resolve the issue.
  
  Variance research goals:

  • Ensure staff is able to obtain a good count the first time (no sloppy counters nor sloppy shelves).
  • Look to find and fix gaps in store procedures dealing with the movement of inventory.
  • Look to find and fix cashiering errors so that sales analysis and order point calculations are maintained.
  • Identify significant store or vendor mistakes.
  • Detect theft: internal, customer, vendor, and delivery.
  • Accurately measure Operational Level 1 - IRA and Operational Level 3 - Shrink.

  • Few stores have the luxury to research every counting variance, that's why limiting counting processes (Mango best practices) and getting reliable first counts are critical first steps. Your task is to pick the most impactful counting variances and then audit them to discover the root cause. Once the cause is identified then fixing its source will help reduce future variances and in turn make research easier the next time. 
    
    The inventory coordinator is responsible for three variance research processes:
    

    1. PIP research (ongoing throughout the week.)
    2. Shrink Report - Variance Worksheet (monthly).
    3. Manager/Owner meeting to review Variance Worksheet (monthly).
    How much time should I spend?

    It depends on the dollar amount and nature of the variance. High-dollar shrink (+/- $100) should be resolved to completion including video if possible. Or if you think you might be on the trail of discovering theft or a procedural mistake then you should spend a lot of time since the problem is not likely to go away. However, there will be many variances where finding the root cause will be difficult. For example, shrinkage to 5 cans of 13322 Great Stuff insulation may be difficult to exactly pin down due to its high sales volume. 

    • Variance research can be time consuming, however, when done right, people and processes causing inaccuracy are quickly identified and corrected; the result is a more accurate and efficient store. Stores employing variance research can systematically detect and correct: 

      • Inventory theft (internal, customer, vendor, delivery.)
      • Store or vendor mistakes.
      • Sloppy counting or shelf condition causing bad initial counts.
      • Untrained or sloppy cashiers.
      • Store procedures causing inaccuracy.
      We believe variance research is a critical inventory accuracy process and you'll agree once you give it a try!

  • Quantity-on-hand variance research is the most important accuracy process in your store. PIP research is typically performed by your inventory coordinator where he/she diligently scrutinizes variances in the Physical Inventory Posting (PIP) viewer before variances are finalized. You should set dollar thresholds $15.00 (for example) that trigger mandatory research when the variance dollar amount is
    exceeded. Stores employing good variance research can quickly find and fix the root cause of inaccuracy.
    

    • It all starts with a good initial count. Our How to Count video will help your team understand the importance of counting better. Folks giving you frequent bad counts need to be identified and trained! If additional training fails then counting may not be the best task for that individual and their counting responsibility reassigned.

    • Variance research is the cornerstone of inventory accuracy. It's how you figure out and fix the process or person causing issues, and once fixed, the accuracy of your store increases.

      1) Sort PIP by the Shrinkage column you created in Level 0 - Completion (Step 1), or the Repl Cost Varinace column if it's available in your PIP viewer.

      2) Verify each variance over/under your mandatory research policy threshold ($15.00 for example)
      

      • Recount the SKU.
      • Look in nearby bins hooks for the item.
      • Look in top stock and back stock.
      • Look in return and defective bins.
      • Look in special order shelves. 
      • Look for multiple locations (clip strips, end caps, etc.)

      3) Try to determine the variance root cause 
      

      • Was it a bad count?
      • A count correction?
      • Cashiering error?
      • Receiving error?
      • Theft? 

      4) If the variance was a result of a cashiering or receiving error then fix it in MPO or POS and delete the entry in PIP. Do not use PIP to correct cashiering or receiving errors as this will skew shrink, purchasing, sales and order points.

    • You can follow the Shrink Report - Variance Research help dig even deeper.

  • If you are researching from your Shrink Report (Variance Worksheet or Adjusted list) then use the table below to pre-screen the variance. If you are researching from PIP then skip this step.

    Step		No	Yes
    1	Should it be Excluded Shrink?	Go to Step 2	Should it be treated as excluded (bulk, lumber, live goods, closeout)? Review Excluded Shrink classification to keep these items off of your adjusted shrink list.
    2	Was it deleted?	Go to Step 3	Enable delete control, review Mango's delete procedure found here.
    3	Does the Research Hint say NoRPH?	Go to Step 4	Shoot us an email if you see a lot of these, it might be a result of an errant setup involving intra-store transfers, or SEQ sequencing issue. If you only see a handful then it could be a result of an RCIN errantly picked up by Mango. Shoot us an email if it's for a large dollar amount.
    4	Move on to Module 2	- -	- -

  • The steps below will guide you through research performed on the computer. Do your best to spot the variance's cause using Eagle's ITR function so that a floor recount is not necessary.

    • If you are researching from your Shrink Report (Variance Worksheet or Adjusted list) then use the table below along with the SKU's Research Hint (if it has one) to help gain insight into the cause of the variance. If you are researching from PIP then skip this step.

      Research Hints
      Category	Hint
      AHCOM	Ace Hardware .com sales and shrink event occurred within 7 days of each other.
      BS+	SKUs in a possible back stock position exhibited by a SKU's quanitity-on-hand being greater than shelf quantity entered in Location 3.
      CS --	CS stands for Count Sheet, followed by the Count Sheet's two-digit Count Type. This SKU was listed on last month's Mango Count Sheets.
      Cashier Error?	SKUs that are commonly rung incorrectly at checkout.
      Central RSC	SKUs ordered on your regular order and delivered via UPS from a centrally located warehouse (RSC). These SKUs on your Ace purchase order are received in your computer (RRP) along with your regular order (when delivered by your regular truck) but are physically delivered later via a secondary freight carrier like UPS. Because of this, there is a lag between the SKU's quantity on hand after receipt and the SKU's physical quantity. Because of this, Central RSC SKUs should be recounted if shrinkage is experienced.
      Correction	The variance this month reverses the variance from last month.
      Defective?	Items that are commonly found to be defective. Perhaps the item was returned using “R” (Return to Stock, quantity on hand increased by one) instead of “D” (quantity on hand not changed).
      DISC	The SKU is discontinued from your warehouse. If it was zeroed out, make sure a replacement was investigated.
      Dup SKU	This SKU has an exact duplicate that only varies by case. Check your Exception report for the Duplicate SKU section which will show the duplicate SKUs.
      High Shrink Rate	These SKUs experience a high shrink rate across all stores.
      HOT	This SKU is exhibiting persistent shrink and may be a shoplifting issue or a procedural issue.
      ICM	Item was potentially a new/old SKU for an Inventory Change Management (ICM). SKUs may have been confused when counting.
      Item Setup	The SKU has a fundamental setup issue with its Order Multiple and/or Unit Multiple that causes persistent shrinkage. Check your Master Exception report Item Setup section for more information on the SKU.
      Kit	This SKU has been accidentally set up as a Kit Header. Check your Master Exception report Ket Header section for more information.
      Multi+	SKUs in multiple locations exhibited by a floor location in Location 2 field in IMU. Check the other location(s) for inventory.
      NoRPH	This SKU does not have a corresponding shrink record (RPH) in your Eagle system which indicates an imbalance in shrinkage.  Give us a call if you see many NoRPH's appearing on your shrink report. (734) 301.4510.
      Packaging?	SKUs that may have a packaging issue causing breakage.
      RCIN	A recent RCIN was performed on the SKU. RCIN SKUs are commonly counted incorrectly because dissimilar-looking items have been combined into the same SKU in the back office but the SKUs have not been combined on the sales floor.
      Receive Error?	SKUs commonly received incorrectly. For example, NS (Non Stock) displays and other items received as one package with many different SKUs inside.
      Rep. SKU
      Store Use?	SKUs which are used commonly throughout the store, e.g. toilet paper, packing tape, snap knife. These items should be charged through the store house account rather than run through your shrink system.
      Theft?	Items that are commonly stolen. e.g. candy, snacks, drinks, liquid laundry detergent.
      UPC x-link	Items listed on your Master Exception Report with a UPC cross link. These items will exhibit shrinkage until the x-link is fixed via your Master Exception Report.
      Zeroed	the SKUs quantity on hand was likely set to zero, usually during your weekly shooting outs process.

    • In this step, you want to follow quantity-on-hand movement in chronological order to try and decipher if a variance was caused by a previous counting error, purchasing error, cashiering error, etc.

      1. Open Eagle Browser.
      2. In the Launch Bar, type in ITR and press Enter.
      3. Type in the SKU you are researching, press Enter.
      4. Change the Starting date to be at least 5 years ago.
      5. You now have a historical viewer that shows the detail of every quantity-on-hand change.
      Look for these issues as you scroll through the viewer:

      Issue Name	Problem	Resolution
      Count Correction	Was it miscounted 4, 6, 12 months ago?	Look for a pattern: are a lot of variances caused by one person? Is back stock not labeled, are there a lot of multiple locations? Is one department showing up a lot more?
      Return vs. Defective	Did a cashier return this item to inventory "R" when it was actually a defective "D" item?	This is a common variance cause because an R-type return adds one to quantity-on-hand while a D-type return does not. The cashier who carelessly selected "R" for the defective returns is the culprit. See Cashier Testing.
      Rung-out multiple times.	Occasionally, a cashier will ring a transaction more than once due to system error or the cashier will start over without voiding the transaction. Look for identical transactions within a short time period.	Resolve the network/system communication error. Cashier training.
      RCIN	Is there RCIN activity for this SKU? When SKUs are combined (RCIN) dissimilar looking items (and UPCs) can share the same SKU, make sure all the combined items on the sales floor are being counted together as one SKU.	Look at the UPCs assigned to the SKU and recount the shelf keeping an eye on combined items that may be orphaned on their old SKU'd locations.
      Recent Purchase	If the variance exactly offsets a recent purchase then the items may be misplaced in the store or did not get physically received into the store. Consult your video system if you can to see if the product ever made it to the shelf location.	A recount is a good idea when this happenns. If it is a large-ticket item then interview staff and consult video. There is a lot of theft that can happen between the back of the delivery truck and your back door.
      Lack of a recent sale	Often, a customer will accidently take a special-order or hard-to-scan item out of the store without being charged. This is an honest mistake. With your knowledge of special order and customer activity, this SKU may trigger your memory.	Call the customer and charge them!
      Missing a P.O.	Sometimes a buyer short-cuts the purchasing process by adding inventory on-hands directly in Inventory Maintenance instead of creating a purchase order through MPO.	For shrink tracking and accounting purposes, all purchases need to go through MPO.
      Sent back to vendor	In an effort to save time, quantity-on-hand for items returned to the vendor are adjusted in Inventory Maintenance or PIP, rather than through a credit PO (MPO, type C).	If you are receiving credit for the items then a credit PO needs to be made.
      Store Use	Regular inventory items used for store operation and maintenance (Store Use) are either logged through Inventory Maintenance or PIP or are not accounted for at all.	Store Use items (regular inventory used for store maintenance) need to be rung at point-of-sale through the store's house account.
      Donation	Donations are taken out through Inventory Maintenance/PIP rather than a donations house account.	Donations need to be rung at point-of-sale through the store's donations account.
      Owner Use	Owner and family are taking inventory from shelves without checking out.	Owners and family need to check out through point of sale.

  • If you cannot determine the cause of a variance by looking at the computer alone then it's time to interview your staff, and then recount the SKU.
    
    Tips for discussing the variance with other associates

    • Start with Department Head.
    • Do you have any recollection of the SKU?
    • When is the last time you remember seeing it?
    • If the SKU has a recent transaction, talk to the cashier.
      • Do they remember anything strange?
      • Was it a unique transaction?
    Recount the SKU
    

    • Two sets of eyes are better than one.
      • Recount the item with the department head.
    • Review Mango's How To Count video

  • If there is a security camera in the area of the SKU, now would be a good time to consult the footage. Don't spend too much time watching video footage, your time is valuable. Determine what the likelihood of theft is for the SKU and set a time limit for how long you'll spend watching video. 

    • Look for activity on the days before the SKU was counted.
    • Do any staff members recall suspicious activity on a certain day?
    • You may need to reposition a camera if an area is seeing high shrinkage.

  • 1. Talk with your owner!
    2. Contact Ace Loss Prevention: 

    • Office: (630) 990-3353
    • RetailLossPrevention@acehardware.com

• 

  In this example, we see SKUs (70008 and 72668) are italicized which indicates they are listed on the Shrink Report - Variance Worksheet.

  The first SKU 6169304 is bolded and may require extra variance research if the Inventory Coordinator concurs. In the case of 6169304, our Reseach Hint "CS XX Zeroed" means this SKU was zeroed out (quantity-on-hand changed to 0) because it was listed on Mango's Count Sheets as a double-x (CS XX) count type. Zeroed is one of the expected behaviors of the XX Count Type, but the Inventory Coordinator may want to set the Store Closeout flag to Y so it is not reordered, or perhaps engage in deeper research if the variance doesn't look right.

  There are many researchable smaller variances (less that $20) that the Inventory Coordinator may want to spend some extra time looking over. The 23805 Shopvac hose for example, is a relatively slow-moving SKU in a big box and may be an easy research candidate.

  The last item, 2360212 CM Pliers, are another good research candidate because they're the kind of item that might be stolen. Perhaps is was a bad count or some other procedural error. If you have good video coverage over the SKU then it would be interesting to fully research to see if a root cause can be determined.

This section of your Shrink Report lists all variances classified as excluded for the month of the report. It is sorted first by excluded reason and then by shrink cost, with the largest dollar removal from inventory listed first.

Steps to process this section
1) Review all large variances (+/- $20) to ensure they are not in error.
2) Keep an eye out for mischief in case an employee has figured out how to classify inventory to get around Adjusted research.

• 

  In the example above, you see variances to bulk items (plumbing hose, key blanks, lamp cord) listed with the Bulk reason. SKUs with their Store Closeout flag set to Y are listed as well, with the Closeout reason.

  

  In the example above, we a few Store Supply excluded reasons and a total line showing 103 variances with a net shrink of -$1,127.75 indicating $1,127.75 was removed from inventory value due to variances in the excluded shrink listing.

Mango will exclude certain categories when measuring your Operational Level 3 - Shrink metric. SKUs classified below will be separated from your adjusted shrink listing and placed in the excluded section of your Shrink Report.

• Separating shrink into two baskets (excluded and adjusted) allows for more focused variance research and more meaningful and consistently measured shrinkage from period to period and store to store. The goal is to remove noise, expected, and controlled variances (which can sometimes be overwhelming) to leave an adjusted listing of variances caused by theft, breakage or where the cause is unknown.

  Excluded shrinkage covers noisy classes where there is little procedural consistency from store to store, where shrinkage is controlled or expected such as closeouts and live goods, or where shrink is offset by sales to dump SKUs.

  Adjusted Shrink	Excluded Shrink
  Theft	Bulk Goods
  Breakage	Closeout
  Unknown	Live Goods
  	Lumber
  	Store Supplies

Both adjusted and excluded shrink are listed (separately) in your Shrink Report, but the adjusted portion is only used in your Operational Level 3 - Shrink metric.

Print the table below here.

The totals portion of your Shrink Report shows inventory counts, variances, shrink and completion totals for the month of the report. Note: these are monthly totals, not year-to-date or twelve trailing months. The totals section contains four sections: 

• This section shows inventory counts, variances, and shrink totals for the month broken out into adjusted and excluded categories.

  

  SKUs Counted
  • 1 - The number of SKUs receiving a Last Physical Inventory date update (counted) during the month within your adjusted (non-excluded) SKU population. This is part of your Level 4 - Efficiency metric.
  • 2 - The number of SKUs counted during the month in your excluded SKU population.
  Variances
  • 3 - The number of SKUs that received a quantity-on-hand variance during the month within your adjusted SKU population. This is part of your Level 4 - Efficiency metric.
  • 4 - The number of SKUs that received a quantity-on-hand variance during the month within your excluded SKU population.
  • Down - The number of SKUs that received a downward quantity-on-hand adjustment (usually associated with breakage and theft).
  • Up - The number of SKUs that received an upward quantity-on-hand adjustment (swell). These are usually associated with errors and error corrections.
  Shrink

  • 5 - Net shrink dollars for the month within your adjusted SKU population. This is part of your Operational Level 3 - Shrink metric.
  • 6 - Net shrink dollars for the month within your excluded SKU population. 
  • 7 - Total net shrink for the month, also know as your financial shrink.

• This section shows inventory variances and shrink attributed to processing your monthly Mango Count Sheets, adjusted SKU population only. This section is helpful for stores recently onboarding with Mango and experiencing significant shrink attributed to phantom inventory cleanup.

  

  Count Sheet SKUs

  • 1 - The number of variances for the month.
  • 2 - Net shrink dollars for the month.
  • Ace SKU population.
  • Non-Ace SKU population.

• This section subtotals variance and shrink by excluded reason.

  

  • 1 - The Excluded Reason
  • 2 - The number of variances the excluded reason for the month.
  • 3 - Net shrink dollars for the excluded reason for the month.

• This section details Operational Level 0 - Completion (count sheet completion) for the trailing three months.

  

  • 1 - Shows the Count Sheet month.
  • 2 - Shows the details for the month. 
    • SKUs Reported - indicates the total number of SKUs reported on the month's Count Sheets.
    • SKUs Counted - shows the number of Reported SKUs that were counted for the month.
    • SKUs Missed - shows the number of SKUs that were reported but not counted for the month.
    • Shows completion for the month (SKUs Counted divided by SKUs Reported).
  • 3 - Breaks out the current month's completion into the Ace SKU population and the Non-Ace SKU population.

  Note: up to 46 SKUs Missed (two pages) for the previous month (September - example above) will show on your current month's Count Sheets so your store can make up its missed SKUs. Please see Track Count Sheet Progress for a way to ensure 100% completion month after month.