1960 - Lessons Learned - Counting Inventory

Many of the lessons we learn we get to apply to our personal lives but, in some cases, the thngs we learn in our early years can affect our professional lives. Currently I spend a lot of time assuring inventory data is correct.

1960 – Lessons Learned – Counting Inventory

“But, dad, I want to go out and play!” I whined.

“You are a part of this family and we all need to pitch in together and find out how big of a problem we have!”

This was evidently the fallout from the conversation I overheard the previous night as we sat together for supper mom & dad discussed the situation in the music store.

“We’ve lost altogether too much inventory without knowing where it is going,” dad had said.

“I know, Bob, but it’s all of the loaners we’ve been handing out with no security and no payment. None of these are coming back…they just disappear with the borrower. Your brother…”

“These are all friends of ours or Johnnie’s. Those instruments will be back someday. Besides we’re only talking about a couple of instruments. One or two guitars couldn’t make that big of a difference.”

“It has been about 9-months since we did an inventory,” he continued. “I think we need to do another one so we can see where we really are.”

I barely paid attention as they were always discussing some adult thing or another. I remembered the inventory they performed the previous year. They had closed the store for 2-days & we all pitched in to count all of the instruments, records, sheet music, drum sticks, guitar picks, music stands and all of the other items that made up the saleable items in the Harbor Music Center. My assignment had been the records and the sheet music. As soon as I completed this chore I was gone and playing with brothers and friends. It wasn’t a lot of fun but really didn’t concern me as I sat barely listening to the conversation.

That was on a Thursday and here on Friday evening I had completed my janitorial duties and had just been informed I would be doing a solo inventory over the next weekend and possibly beyond if I didn’t get everything counted. They did not want to close the store for this exercise so, needing someone to perform the inventory they naturally picked the employee that was least critical to the operation of the store…me. Naturally, at 10-years old, I didn’t want my weekend monopolized with work. I was already the janitor and was taking music classes, most of which I didn’t care for, and a dancing class as mom’s practice partner while she worked on her teaching certificate from Dale Dance Studios. Of all of this, the dancing was the only one I really enjoyed. That aside, I simply did not want to “waste” my weekend by doing work for which I would see no profit.

“Can’t I just count some today and some more tomorrow? I could just count some every night until I get everything counted!”

“Larry, that’s not how inventory is done.” Dad frowned. “It should be done as quickly as possible so we have a pretty good idea of what we still have for sale and what is missing. Delaying this over time just would not work.”

“But I don’t want to count everything tomorrow…besides I don’t think I’ll get it all counted anyway.” I wheedled and cajoled. I whined and cried. “This isn’t fair! It’ll probably take weeks every night after school! I know can’t count them all in a week and, anyway, we don’t sell enough to make a difference over just a few days!” This statement did not help as the level of sales was already a sensitive issue. Competition was non-existent in this little village but the towns and cities surrounding us all had music stores and, in our little town, there simply was not enough interest to make a good living selling music supplies. Music, as the primary love of both mom and dad gave them the motivation to open their own store…unfortunately I don’t believe they had clearly understood the top 3-rules of the retail business: Location, location, location. They had been learning the hard way. The little village of 1,400 people tried to support local businesses but they all had a rough time of it. No local businesses were becoming million-dollar enterprises because business was sooo good.

I made a lot of noise until dad gave in partially. “Alright, I’m tired of hearing it! If you can come up with logic that allows you to count a few every day I’ll agree but if you can’t reason it out tonight you will be here bright and early tomorrow morning to start.”

Dad often used this ploy and usually made an honest attempt to understand my logic. This was a partial reprieve so I knew full well that if I could come up with logic to support my request there was the possibility my reasoning could will-out. I went home to think.

What possible reasons could there be to spread out the counting of the entire inventory?

I already have one good reason, I thought, it would take less time away from closing the store because if only a few items are counted each day we could count them before the store opened or right after it closed. Just counting a few items every day would mean we could count all of the single-day’s items in just a few minutes as long as I could find them. I recalled how many items were spread throughout the store during the last inventory. Some of them had been in the same casual spot for weeks. Also any missing items would either be missing completely, on the loaner list or somewhere in the store…and once I find the missing item it will stay right where it is until I’m done counting that item because no customers would be there to disturb or move it. Ok, how to list this?

#1 – We can count daily before or after all of the sales are made so we know exactly where everything is. The count will be reliable.

What else? I looked at the last item on my list – a lonely list of one reason. This would never do. Wait, I thought, the last item said I would be finding missing stuff…last inventory dad said he had to “write a lot of stuff off.” When I asked the meaning of writing-stuff-off he informed me this meant we were considering the items lost. He said writing something off meant something had cost us money to buy it, but it could not be sold to pay for itself. He then explained the meaning of “profit.” Boring, but I understood…because if I had more time to find some of the missing stuff it would be a more accurate inventory. After all we were still finding little stashes of missed inventory for weeks after our last count. Ok…

#2 – We’ll have time to find more stuff so the count will be more reliable.

Alright, #3…

I sat…and sat. Two items would clearly not be enough to convince dad. …I remembered the situation that started the original conversation at the supper table. It seemed that a whole case of guitar strings and a new guitar had disappeared. They had been delivered a couple of months before and mom thought she remembered dad loaning it out but couldn’t find a record of the transaction. Dad flew into a yelling jag in which mom got defensive and wound up blaming Uncle Johnny and his band, over which dad got defensive. Dad said every week the records got worse and worse until dad decided to take an early inventory – and I was stuck with the job. Maybe if they hadn’t lost that guitar none of this…wait! If I had more time to look into where a missing item was then some of that time I could spend looking through the stack of loaner and sales records. In fact I could look at records while the store was open – the cards were not going to change unless a missing item was recovered and then the problem would be instantly solved!

“In fact,” I thought, “if we spread out the inventory so we got everything counted within a month or so and if we could just keep counting a few items every day. Then the last time something was used, loaned or sold the time between finding there is a problem and the cause of the problem would be a much shorter and it would be easier to do the research…mom might even remember if someone had forgotten to record the transaction. Ok…#3 – The event causing the inaccuracy would be easier to remember or it would be easier to search records to find the problem as the time between the cause and the solution would be shorter. Hmmm…too long and too confusing. Try again.

#3 – Shortening times between finding out about missing items and the cause of the inaccuracy would reduce time spent investigating and memory would be more reliable.

This also led naturally to note:

#4 – Continuing inventory incrementally throughout the year would offer continuous discovery of problems soon after they happened and inventory would always be more accurate than if done only once-a-year.

I suddenly realized we might even be able to figure out what we were doing that wasn’t working…if we paid more attention to finding the main cause of inaccuracy we could figure out what not to do…or how to do it better!

Alright - #5 – We could learn what things we need to do better.

And the final reason which had been percolating in the back of my head throughout the entire exercise:

#5 – Counting a few every day would have less impact on our normal everyday life.

This meant I wouldn’t have to give up an entire weekend every year...and…neither would they!

I ran downstairs to the living room and dad. After a long day at work, an evening at the music store and a late supper he was busy decompressing and wasn’t very happy about my interrupting Gunsmoke but when I reminded him he said I had to convince him that same night, he agreed to listen. After almost a half-hour of convincing and negotiating dad agreed to let me try this experiment. He would reserve judgment whether we would continue this practice after seeing the results after a week or so.

The next morning, as agreed, I headed for the music store at the time I regularly went for my Saturday shift. Before sweeping or dusting I had agreed to start the count. The 3x5 cards that contained all of the information on the individual items sat under the cash register. I pulled the first 5-cards: Guitar Picks, kazoos, trumpets, music-stands and sheet-music A thru F was up for a count this morning.

Guitar Picks were way off. We often gave these away to guitarists during casual stop-bys or, more often, they went to students that had broken or forgotten their own. We only had a couple of boxes left. There were plenty of thumb picks. Kazoos were right on except for the one missing that was on my dresser at home. Both trumpets were where they were supposed to be and each practice-room had 2 music-stands. I had counted and recorded the few pieces of sheet music that was in the A thru F bin and opened the overstock shelf directly below to see if there was any music there. Sheet music didn’t sell that well so it looked empty except for the box of violin bows that had been stashed there until room opened up in the back room closet where we kept miscellaneous parts for instruments. I lifted the corner to see if there was any music hiding underneath. Nothing – but a crumpled piece of packing tape that was stuck to a small box that was shoved into the far corner. Pulling on the offending scrap drew a small 10” x 10” box into the open. Pulling the box out I discovered it to be full of unopened sets of guitar strings. The address label and postmark revealed it to contain the missing strings – every one of them.

Dad was surprised how many guitar picks were missing in under 3-months. He noted it was time to re-supply and he and mom had a short conversation agreeing not to be so loose with the free guitar picks. I told mom about how I had picked up the missing kazoo and forgotten to return it. I promised I would do so the next day. “I don’t think so, honey.” Mom said. “I don’t think anyone is going to want it after you’ve had it in your mouth. Just make sure you ask from now on before taking anything.”

Dad said he was surprised that I had not only found the missing strings but complimented me on re-organizing the card catalog so we could easier find the items we need to find to record a sale or receipt. I had only done this so I could more reliably know what and when I had counted all of the items. He said he would give me another week before he decided if we would continue this practice.

The day before dad would make his decision I found the missing guitar still boxed, just like the strings. It had been on top of a stack of similar, but empty, cartons that were awaiting flattening and discarding.

The next day dad made his decision. “Well Lar, I’ve thought quite a lot about this and your ideas about counting seem to work. Sometimes this is even better than normal but the more I think about it…that’s just not how an inventory is done. You stop work for one day so everything is static and we can see just how everything is for that specific day. Your method is always a moving target. We would never know what we really had.”

Of course dad’s thinking was in perfect alignment with the thinking of the day. This thinking eventually changed which I found out when, in 1980, in took classes in Inventory Management where, on the first day, they introduced us to what they called “Cycle Counting” and told us it was the best method of controlling dynamic inventories and the only way to keep a stockroom highly accurate. They then proceeded to explain how and why the method I had discovered 20-years before was used and maintained.

I guess sometimes it just takes awhile for the rest of the world to catch-up.