Introducing 3rd party audit solution

Introducing 3rd party audit solution

Shrinkage Costs Retail Industry £ 11 Billion Per Annum

Retail Assist, the UK's only dedicated provider of IT services to the retail industry, has developed, in partnership with Adams Childrenswear, an innovative 3rd party audit solution to enable a 3rd party to undertake stock count on the retailers behalf. Audit is becoming an increasingly important aspect of the retail business as a result of the massive problem of shrinkage affecting the entire industry.

 According to figures supplied by the Retail Industry Council, of which Retail Assist is a member, shrinkage is at an all time high, costing the retail industry a staggering £11 billion per year. The worst affected sectors are Confectionery, Tobacco and Newsbook shops and the Clothing and Fashion industry, who are experiencing an average annual shrinkage of 1.9% resulting in an average loss of profits of over 28%.

 Retail Assist and Adams Childrenswear are working together to develop an AS/400-based audit application that will enable the retailer to outsource stock counts to a 3rd party, whilst retaining management and reconciliation control over the process. A 3rd party will be used by Adams to count stock in low turnover band stores and its concessions business.

 Alan Morris, Business Development Director of Retail Assist commented, "Adams was committed to this new development as it facilitates further expansion of the concessions side of the business and will prove to be a cost-effective solution going forwards. Adams didn't want to expand their internal audit team and the idea of introducing a 3rd party to count stock in certain Adams stores and concessions was an ideal solution."

 Adams currently has a team of nine auditors who operate the 350+ store estate, with the larger stores being audited twice a year.

 The bespoke in-house audit system offers Adams total flexibility in operation whilst at the same time enabling them to retain control of the development. It enables the retailer to effectively outsource to a 3rd party an element of the physical audit function, which can then be compared with stock data held at Head Office. Results from the audit above or below a predefined tolerance level will trigger further investigation and analysis by the retailer.

 On the back of this, the retail IT services company is also developing a partial audit system to enable Adams to rapidly instigate a detailed department-level audit in response to business requirements.

 The system will be developed and implemented within Adams from August and commence operation in January 2003.


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