Do You Feel Me?

Back when I was just starting out with RGIS, I was in a company van on the way to a store with five other counters plus my DM. My DM was telling us that this inventory was a scan inventory, and was going to be a little different from the string of financial inventories that we had done recently. One of my co-workers quipped "So we actually have to see what we're counting". This comment was said somewhat in jest, but it had some truth to it as well.

The sense of sight is a pretty important sense in inventory counting, it gets mentioned a lot when counting techniques are discussed. If you want to count a store accurately, obviously you need to see the product in order to do it, blindness is probably one of the few physical deficiencies that will keep you from being hired by inventory services, and trust me some of them are real desparate for workers. But this got me thinking, how important are the other human senses to the inventory counting process?

I honestly cannot think of any possible scenario where a sense of taste would impact inventory counting in any way possible. If such a scenario exists, I would love to hear it, but I'm going to declare that the sense of taste has no effect on inventory counting.

I suppose the sense of smell may help a counter become aware of certain odorous products that need to be counted, but for the most part, it offers pretty much no aid into the counting process itself. The sense of smell for the most part has no effect on the inventory counting process. Much like taste it would require a extremely "unique" set of circumstances for this not to be true.

The sense of hearing is a far more important sense for inventory counting. Most counting machines are programmed to produce audible alarms when a certain set of keys are hit. These alarms are important to maintaining accuracy by warning counters of potential handkeying mistakes. Also in scanning inventories, a captured barcode can be confirmed by an audible beep from the counting machine. These beeps let the counter know that they've captured a particular item. Of course I always find that it's easier to hear other people's beeps than your own. But outside of these examples, hearing doesn't play much of a role in inventory counting. I actually believe that a deaf person could function as an inventory counter pretty well. As long as they can see the product, communicate with other counters and store personnel, and use a substitute for the alarms and beeps mentioned above, there's no reason why a deaf person couldn't count inventories. In fact there are substitutes for the alarms and beeps out there. I recall working with a hearing-impared counter during my days with RGIS, he used a vibrating device as a substitute for the machine alarms, plus all the scanners would give off a visual light flash when a barcode was captured. A lot of times I found it easier to look for that flash of light then to try and hear my machine beep over everybody else's. So hearing can be an important sense, but not necessarily an essential one.

Sight is obviously huge in inventory counting, but the story above illustrates that in financial inventories, not everything that is counted is seen by the counter. This leads us to the last sense, the sense of touch.

In scanning inventories, or inventories where a barcode is captured, the sense of touch can't be denied. Most barcodes are located on the product itself, and on occasion faced to allow for convenient scanning. Scanning inventories may also feature a greater level of detail than traditional financial inventories, it's more important to have an accurate count in these types of stores, than in financial inventories, so your gonna have to touch the product in these inventories there's no other way around it.

The sense of touch would also seem to be important for financial inventories as well, especially sense not everything can be seen, but strangely it's not stressed that much by inventory services. I was given a handout when I first started out with RGIS (a portion of which you can see below), Titled "Helpful Reminders on Auditor Efficiency", it actually does talk about the sense of touch, but only in relation to the counting machine.

One bullet point states "Force yourself to key by touch..". What's they're talking about here is the notion of 'handkeying'. This is basically the art of entering in data on a counting machine without looking at it. This skill is similiar to typing and is a must for counters wishing to be efficient. Handkeying is probably the one time when the sense of sight is looked down upon, handkeying should only be done with one's sense of touch.

But there's more to inventory counting than just being able to handkey a counting machine, you also have to deal with the product itself. Further down on the 'Helpful Reminders' sheet we see the following points listed under Counting Techniques

Sight Counting - Recognize groups.
All "non-keying" time decreases your average per hour.
Pursue your job with a sense of urgency

Then there's the rules of thumb:

Keep your keying hand on the keyboard whenever possible
Count with your eyes, not with your hands
Use product size and shelf depth to assist you in determining quantities.

On the back of this sheet is even more helpful hints, most notably:

Always view the product from an advantageous angle.
When you must handle merchandise, do so as little as possible

And specifically under a heading for Financial Inventory

Merchandise is counted using appropriate sight counting method.

When I came to work for Quantum Services roughly 8 years later I was given a phamplet called "The Seven C's of the Audit Process". One of the "C" 's was titled "Counting the Store" it has the following bullet points:

Never compromise your accuracy and integrity
Count with your eyes
Count what's not there
Count with a sense of urgency
Use your QIC to count cigarettes, lottery and cups

I find the 2nd and 4th points strikingly similar to the tips I ran across working for RGIS 8 years prior, in fact the phrase "count with your eyes" exists on both sheets pretty much word for word.

The major theme present throughout these tip sheets is the notion of sight counting. The ability to simply observe how much inventory is present and let your counting hand react to it by entering in the appropriate data. The RGIS' tips seem to suggest that one's hands are meant for working the counting machine and not for handling the merchandise. This would seem like a reasonable approach to take for inventory counting, that is until you walk into a store an actually confront the way some merchandise is kept in a store.

There are some limitations to sight counting. As a coutner you're going to run into merchandise, that has to be touched in order to get a proper count. Below are some of the more common examples

Candy
In c-stores and probably to a lessor extent in grocery stores, counting candy is the bane of an inventory counter's existance. The candy gondola is the one part of the c-store that counters probably loathe counting the most. One of the most well known tricks to counting candy or gum is to take note of the box quantity when it's full and use that to determine the actual quantity present. In some cases you utilize the "count what's not there" technique. For a lot of the gum items this can be pretty accurate. Of course you still would have to worry about overhang (my term for extra merchandise placed on top of a full box) and boxes that sit inside other partially full boxes. Once you get down to the candy things get a little more difficult. Trying to determine what's missing out some candy boxes is not as obvious and overhang can be far more troublesome.

I've also noticed that its possible for extra candy bars to be stuffed into boxes without any noticeable overhang, for instance a box of starbursts can comfortably hold 39 bars even though it's designed for 36. One could use the sense of touch can be used to determine the depth of the product and how many go across, the rest is simple multiplication. I do strongly agree with one of the above techniques, "Always view the product from an advantageous angle". It's always easier and more accurate to count items at angle or from a side view where you can more easily see every single item, and this is exactly the problem with candy, you don't get a lot of good angles to view the product. It's always tightly packed onto the shelf, and usually contained in cardboard boxes. One way around this is to pull the box off the shelf and lift up the side to peek at a side view of the product

This allows you to see how deep it is and in some cases allows the counter to see pretty much every single bar. But then we move down past candy bars and into merkier areas, like candy 'packages'. Items like skittles, M&M's, or other 'bagged candy' is probably the hardest to count, because of the way the product can wind up in so many positions within the box. Here a side view doesn't offer much help, nor does the 'count what's not there' method offer a better alternative. The method i've usually employed is to dump the product out of the box, grab a handful and count it at the best possible angle and place it back in, and then go for the next handful. This method is a bit tedious, but accurate. Store manager will never complain about the way you count candy when you do this. The "count what's not there" technique, has never been a favorite of mine, for one the full box quantities are hot hard and fast rules about what "full' really is. When a box of candy has been jammed beyond capacity this method is essentially useless, and then for boxes that are partially full, sometimes the reamaining product is so disorganized that this method gets reduced to guesswork. Figuring out how many M&M's are missing from a box of 48, is not the most accurate way to count them. The product that is still there is something that I can touch and see, and actually 'count'. Sometimes it's better to deal with what is still there, not what isn't.

Tobacco
I'm pretty sure any experienced counter could tell you how many snuff cans can fit in a full slot on their display rack. I've come to find myself pushing back on these cans to confirm that a slot is truly full, or if some cans are stuck which does happen from time to time. Individual cigars fall into the same boat as candy, they come in boxes that make it difficult to get a good view of them. Usually I have to pull these out as well and view them from the side. A partially full box of cigars may be another example of where the "count what's not there" method gets reduced to guesswork.

Cigarettes
I've been to stores where the display cartons at the top of the cigarette racks are fake and I've been to some stores where they're real. What I've also noticed is that from a distance, the fake cartons look exactly like the real ones. Normally when counting cartons I'll run my hand over these to see if they feel real. I've also run into stores who see no problem in taking a pack or two out of the cartons only to put the rest of the carton back underneath the racks where all cartons are stored. The sense of touch will indicate how full these cartons are.

Pop
Generally pop, or beverage in general is easy to count, on the salesfloor sight counting can be very accurate, but when counting backstock in the back cooler, I've come across many 20oz cases of pop containing 23, 22, 20 or less bottles. And sometimes they're in the middle of a stack underneath full cases of 24. In these situations I like to push back on the bottles to get a sense if the shells are full or not.

Gatorade
Gatorade is a great example of something that gets counted where the counter may never actually see it, this is the case for the boxes stored in the back cooler. Much like pop a box on the bottom of the stack doesn't necassarily have to be full. However with merchandise completely encased in cardboard, obtaining accuracy may involve opening the box, to either see how full it is or to feel inside to see if it's full.

One theme that does appear in these examples is that the sense of touch is important in order to achieve some level of accuracy in counting. Running my hand over cartons of cigarettes is done for accuracy. Pushing back a case of 20oz bottles of pop is done for accuracy. Taking a box of candy off the shelf and lifting up the side is done for accuracy. Grabbing a handful of ciagrs and lining them up in your hand to see every single one is done for accuracy. But while I run my left hand across the cartons of cigarettes atop the cigarette display, my right hand is doing nothing, simply waiting to find out if the cartons are real before inputting data into my machine. It also has to wait when I push back a case of energy drinks, or stick my hand in a box of powerbars. Most of the time I spend feeling the merchandise will fall under the category of the 'non-keying time' which according to the "Helpful Reminders" sheet decreases my average per hour. Even though accuracy may pay off later down the road, a counting style predicated on accuracy will never be considered the most productive. Touching the product is time consuming and non-productive. That's the message behind the phrase "Count with your eyes, not with your hands" or "Count what's not there". To be productive one has to learn to trust their sense of sight more and more, to be able to look at a box of candy and say it has 27 bars in it. If the sense of touch is important for accuracy, then sight is important for productivity. As an inventory counter really both senses are important and need to be used often, by as you can see only one gets stressed on inventory services' tip sheets. If you want to have an idea of how accurate a counter is, just watch them count and take notice of how often their sense of touch comes into play.

The 1% Rule

Years ago when I was just starting out as an inventory counter with RGIS, I somehow ended up sitting shotgun to my district manager on a way back from a inventory with a van full of counters sitting behind us. The trip home was a long hour and 45 minutes trip mainly caused by the distance. During this trip my DM got to talking about all the different clients he's had to put up with in all these various stores. All of his accounts were extremely one sided tales, containing some level of contempt for the people he described "You've done 20 inventories, well that's a good week for me" was one memorable line. In response to one client who questioned the accuracy of his crew's work, he said as an aside to me and to anyone else who was listening "You know as long as it's within 1%, it's okay".

Eight and half years later, I was in a meeting with my boss and several other co-workers
from Quantum. The topic of counting candy came up, my boss mentioned several techinques for counting it, none of which included actually taking the candy out of the box and physically counting it, and at some point someone brought up the point that as long as it's within 1% it okay. This of course was followed up with a rather obvious condition, "but you don't ever say that to the client". To the question of what divides unauthorized from authorized estimation, here exists an unwritten standard to seperate the two concepts, or perhaps to better define what one of these concepts is. The 1% rule, as the above stories may hint at, seems used more to identify what is accepted than what is isn't. There are some questions to consider with the 1% rule.

1% of what would be the first obvious question. Whenever someone says "within 1%", it's not always clear what the 1% is being taken of. 1% of the total inventory? I've been to grocery stores that carry over $1,000,000 in inventory, 1% of that would be $10,000. For a c-store that has $150,000 in total inventory, 1% of their total inventory is $1,500, which could represent the same total as a small gondola. Being off by less than 1% for the total inventory can offer a lot of wiggle room of counting errors. A total inventory count for a grocery that's off by by $9,000 can still be within 1% for the entire store, a c-store count that's off by $1,400 can still be within 1% of the store's total inventory. There probably exists a lot of store managers who would find these variances too large in spite of what the overall percentage is. Perhaps the 1% rule gets applies to individual sections of the store, instead of the entire store. When applied to smaller portions of the store the notion of 1% can become far smaller. For a box that contains 36 candy bars, 1% is roughly a third of a candy bar. If a shelf had 10 boxes containing 36 candy bars and all were the same price, then counting that shelf within 1% would allow us to be off by 3 candy bars total. And of course that variance might be smaller if some of those boxes were not completely full. If a whole side of the gondola had let's say eight shelves like this, than for the entire side being off by less than 1%, will, conservatively speaking, mean being off by no more than 24 bars, still less than a full box. Of course how the the variance for sections gets used in relation to the whole inventory is still interesting to consider. I could be off by more then 1% for one section, but if I nail enough sections elsewhere I could still be within 1% for the entire store. Being within 1% for the entire store doesn't guarantee that every section carries that same level of accuracy. I've also thought that 1% is in reference to the store's level of shrink, but a counter in most instances would have no idea about the resultant shrink percenatge a certain count produces, so this wouldn't make much sense at all. I've also considered the notion of 1% of the stated book value. But once again a counter usually won't (or better yet shouldn't) know what the book values are, so this wouldn't make much sense either. Generally the 1% rule seems to be in reference to the actual value of the inventory that truly exists in the store. How this gets used, or how deeply it gets enforced is still not quite clear.

Another question would be why 1%? Why not 2%? or 3%? or even 5%? There probably isn't a satisfiable answer to these questions. But if the notion of a perfect 100% accurate count is too lofty of an ideal to actually achieve, than a line definitely has to be drawn somewhere, and it has to be drawn in order to deliver a high level of accuracy, while still allowing room for "ethical estimation". In an essay called "What causes Inventory Auditing Fraud?" written by Carl Jackson and Jack Henry that can be found on the NAAIS website under the "History of Inventory Services" link (an interesting read if I don't say so myself) they briefly refer to the concept of ethical estimating, saying "these types of estimates are controlled and do not affect accuracy". They proceed to give 2 concrete examples of when it's okay to estimate but offer no such examples of when it shouldn't be done. Addding that such measures wouldn't affect the "tolerance of accuracy required for a good count". Okay fine, counters don't have to be perfect, but how imperfect are they allowed to be? Jackson/ Henry don't mention anything about being within a certain percentage, but from my experience levels of tolerance can change from client to client, and from manager to manager. Some store managers will have a pretty high tolerance of accuracy (or should it be inaccuracy), and then there are some that have a fairly low tolerance. These types of managers usually get complained about alot within inventory counter circles. One of the examples that Jackson/ Henry cited was estimating a partially full box of bubble gum, when you know that it contains 480 pieces when full. From this perhaps comes the notion that the degree of difficulty comes into play when determining when estimation should be used. The problem with that is the notion of "difficult to count" can be somewhat subjective, different counters will have different conceptions on what is too difficult to count, and thus maybe different views on what can be ethically estimated. As I counter myself I'm probably more hardcore when it comes to actually counting merchandise than the average counter, I try to count as much as I can. I'll take the candy off the shelf, I'll dump the merchandise out of a dump bin, count it and throw it back in. I probably have a lower tolerance of accuracy than most people (probably to the chagrin of the companies I work for), and If I have a lower tolerance of accuracy than a store manager I know I won't have any problems with them. Some counters may look at a dump bin, say to themselves that it's too difficult to 'actually count', eyeball it and come up with a roundabout figure, justifying the whole process by saying that's probably close enough. The problem with the concept of "ethical estimating" is that it sends a message to counters that it's okay to cut some corners here and there during an inventory, and this can be a very slippery slope to get on. Adding the notion that their counts only need to be within 1% only further encourages such behavior. I don't neccesarily agree with the phrase that such practices "don't affect accuracy". Estimating does affect accuracy, maybe at times it doesn't affect it to the point where it creates any serious problems, but let's face it, estimating is not the same thing as actually counting it. Anybody can eyeball a box of bubble gum and say it has 240 pieces in it, however there is no certainly to this method. We have no way of knowing wheather this is right or not, all one can do with estimation is to claim that it's probably close and move on. If such practices don't affect accuracy then a counter could adopt a reasonable line of thinking that these practices could used more often without affecting accuracy, and that may not necessarily be true. The 1% rule is in some ways a license to cut corners when counting, to adopt a counting style that has a relaxed tolerance of inaccuracy. It would probably be inappropriate for inventory company supervisors to instruct their counters that it's okay to guess, but they apparently don't need to, all they have to do is remind us that as long as we're within 1% we're fine.

Of course how does anyone even know when a particular count is within 1%. Let's say for the sake of argument that we're trying to get within 1% of every section in the store. For a given section let's say I count, I dunno $527. Is this within 1% of the true actual amount of money in that section? How would we know? Wouldn't we need to know the true total to make such a claim? Should recounts be done to see if these types of claims are true? Maybe the 1% rule, strangely isn't about any actual numbers at all, but rather sustaining a belief that the way someone counts is acceptable and good enough. The 1% rule exists to offer validation for all the estimation techniques that get used during a count. The danger exists in wheather the 1% rule helps mold certain attitudes and counting styles with inventory counting. Eight years ago, I saw a brief glimpse into how this can affect a counter's approach to the job. Working in a book store for RGIS, we were capturing barcodes for all the books and recording a piece count for each area. For each area we were required to count back afterwards to verify that our count was correct. At one point a counter near me uttered a question I'll never forget "Do we have to verify at 100%?". Unfortunately for the counter who posed that question, the unwritten rules of estimating don't always apply.

Horseshoes, Hand Grenades, and...

"Numbers are pure and true, counting never is"
-Michael Blastland and Andrew Dilnot from their book The Numbers Game



There was a great line from an episode of the Simpsons many years ago. In this episode Marge had taken a job as a real estate agent. Initially she struggled to close any deals due to her honesty and integrity, leading to a confrontation with her boss played by the weasely Lionel Hutz. Lionel Hutz instructed Marge to bend the truth a little when making a sale, at one point he added that there’s The Truth(all serious and focused) and then there’s "the truth" (whimsical and head-bobbing). Lionel proceeded to tell Marge that she’d be fired
if she didn’t make a sale. This moment seems to describe a verycommon aspect of the working experience. From the outside we see want a company wants us to see. But behind that surface of shiny gloss and sheen lays the mechanics of how things operate, of the ugly brutality of business, and in some cases the layers of fraud that stay hidden from view. No matter how a company operates on the inside, it's important for a business to maintain a spotless public persona, especially to those on the outside looking in, who don’t have the access to see what really goes on. The phony, glamorous façade seems to be essential to business today, and one can see countless examples of this in the ever omnipresent advertising that exists today. Yet there seems to be one rather easy way to get past this layer of sheen, and that’s by working, by becoming employed with a company. In a lot of walks of life, there seems to be a Lionel Hutz moment at a certain stage in a job, when one realizes that things aren’t what they appear to be from the outside, when one sees how a business truly operates, and when one realizes ultimately what their goal is, to make the company they work for successful and profitable, and if they don’t they’ll be gone. The concept of the phony public facade is no stranger to the world of inventory counting. It might be more prevalent here than in most industries. I once applied for work with an inventory company called Quantum Services, the HR person who I interviewed with brought along some pamphlets and company information that she actually referred to as "propaganda"; a description that was not entirely inaccurate. Similar forms of propaganda exists on inventory services’ websites, and on the slogans of their inventory tags, from phrases like "Accuracy is our Primary Concern" to "A Company Committed To Service", to "The way it should be!". I have spent a decade working in the inventory service industry, and the biggest example of that phony façade that I see is in the notion of counting. No doubt that if Lionel Hutz were an inventory counter, he’d be talking to an unspoiled new hire saying that there’s counting and then there’s "counting".

The official public policy of auditing companies everywhere is that estimation is wrong and unethical and not to be tolerated. In a monthly letter sent out by Quantum Services they talk about several things that shouldn’t be done in an audit; taking short cuts, plugging numbers, estimation, and collusion. In other materials they offer tips like ‘never compromise your accuracy and integrity.’ Over the years I’ve collected numerous handbooks from RGIS and every single one has contained the same phrase:
"Unauthorized estimating or batching has never been, and never will be, permitted or tolerated in any event/inventory performed by RGIS"
Older versions of the handbook, used to have another phrase on the inside cover that read "NEVER ESTIMATE". Jack Henry, a Loss Prevention expert who once spent 15 years working in the inventory counting business, has a more realistic take on estimation. From a series of articles linked from the NAAIS website, Henry writes, "An inventory service that tells you they "never" estimate should not be hired. Not only do they estimate, they are lying to you as well". Okay, let's establish one thing right now just to get it out of the way; estimating is a part of the counting process. I myself have done it, and so has virtually everyone who’s ever held a counting machine in their hand. Anybody who's spent any decent amount of time counting inventories and who says that they never estimate is lying. Some level of estimation exists, and more importantly it’s tolerated in spite of what the propaganda says. The most disconcerting word from RGIS’ credo is "Unauthorized", this seems to allow some wiggle room for ‘authorized’ estimation to occur. There's a great blog called "Tales of a RGIS Auditor" written by a former counter for RGIS out in California identified only as the Misfit. Even on his blog you’ll see people talk about the right way and wrong way to batch. Quantum will talk about not using shortcuts, but in their propaganda will advocate a method of counting where one counts what isn’t there, which has the feel of a shortcut. Henry goes on to say that "Reputable inventory services do permit some estimating, yet stay within their code of ethics". I find this statement by Henry to be a little scarier than the first. Granted one has to be somewhat realistic in reagrds to inventory counting. Counting is not easy, and there's going to be a lot of challenging things to count in any store. The "never estimate" policy is extremely difficult to uphold. All one has to do is look at a chest full of ice bags, or a pile full of mulch to understand that even the most hardcore of counters will be forced to take a more pragmatic approach to counting every once in awhile. Estimating sometimes occurs out of necessacity, and shouldn’t always be interpreted as a nefarious act. An inventory service shouldn’t boast about never estimating, rather they should claim to estimate ‘less’ than any other service. The biggest issue with estimation is the frequency in which it should be used, where do we separate the "unauthorized" from the "authorized"? How 'pragmatic' should an inventory counter be? Where this line gets drawn depends for the most part on the service and the counters themselves, and too often it gets drawn primarily to serve the inventory service more than anybody else.

If an audit is a process that measures the amount of shrink in a store, then estimation is the purposeful inclusion of measurement error. The main reason estimation is done is to expediate the audit process in areas where exactness and great precision are not necessary. The most common and accepted form of estimation comes in the way sales adjustments are figured. When doing financial audits (especially in C-stores), counts will take place while the store is open for business, creating a need for some way to account for the sales that take place during a count. The most accurate way to adjust for sales is to run a sales report for a certain category or department, then go out and count that department entirely, further adjusting for sales since the sales report was run. At the end of this activity you will have a perfect sales adjustment to go along with the on-hand count. The problem with this method is that it’s time consuming and for certain departments it’s going to be impossible to adjust for sales perfectly do to the distribution of merchandise throughout the store, or due to high sales volumes. For instance, doing this for a category like "grocery" would be almost impossible. Plus if doing this for one department is time consuming, repeating this process for the rest of the departments in the store results in an absolutely insane way to go about doing an inventory count. The most common way to adjust for sales is to utilize the half-sales method. In this method a sales tape for all departments is run at the beginning of the count and at the end of the count. The adjustment takes all of the sales from the beginning tape and half of the sales during the count to account for the fact that some of the merchandise sold was counted. Mathematically this total can be achieved by adding the beginning and ending sales figures and dividing the sum in half. The level of error caused by this method is probably minimal for most departments. Although for departments like cigarettes and lottery, the perfect sales adjustment may still be preferred due to the high volume of sales for these departments, not to mention that these departments are usually kept behind the checkout counter, making it easy for the counter to monitor the sales activities during the count. But ultimately the half-sales estimation technique is accepted because it has been proven to be accurate, it is easy to implement into a counting process, and it allows the counter more freedom in determining how to count a store more efficiently.

From this we could judge an estimation technique by determining the resultant drop-off in accuracy caused by its utilization. The half-sales method in most cases won't affect the accuracy of the audit a great deal, but what about techniques employed in the counting process itself. Consider what information gets captured during an inventory count. In a financial inventory a counter needs to capture the department (or category), price, and quantity on all the items in a store. In a scanning inventory, barcodes can provide information like departments and prices, leaving the counter to only worry about the on-hand quantity. Estimation of quantities is as old as inventory counting itself. The idea that counters are going to do whatever it takes to capture an accurate count on frozen food, plumbing parts, boxes of Jell-O, candy bars or other hard to count items is just nonsense. Techniques for estimating quantities can include judging the size of the item relative to the depth of the shelf or bin that they’re contained in, or using the quantity of the box when full or using case counts, this gets done a lot when someone counts candy. But quantities aren’t the only thing that gets guessed at. There are numerous of instances were items are not priced, and counters generally don't do price checks on every single unmarked item. In financial inventories price estimation may be even more prevalent then quantity estimation. Unmarked items present another situation where estimation is used in the name of efficiency. In some instances, it would require too much effort and time to verify the price of all unmarked items in a store, plus given the notion that one can reasonable guess the price of an item based on past counting experience or similar items in the store that are priced, would suggest that this estimation method wouldn't affect accuracy that much. When working for Quantum, they actually instructed us not to use the store’s price scanners for one of our clients, arguing that they would slow us down too much. This was said in spite of the fact that we had never counted for this client before, were not well versed on the client's typical pricing standards, and also the fact that their price scanners were handheld devices that could go anywhere we could go, making it easier to implement price checks into the counting process. For a financial inventory, if the store doesn’t mark the price, they are essentially letting the counter decide how much it’s worth, and the overall accuracy of the audit depends on how well the counter can guess the prices of merchandise. Granted at times these can be educated guesses, but they're still guesses nonetheless. Also with unmarked items, it’s usually not one or two items that are unmarked, it’s a condition found throughout the store, especially in storage areas. The question then becomes how much of the store will end up getting estimated in this manner? Can a counter get to a point where they've estimated too much?

Another criteria by which we can judge estimation techniques, is by looking at the amount of merchandise that gets estimated in a store. It would be reasonable to say that the less stuff that gets estimated in a store, the more accurate the overall audit will be. If someone walked into a store and looked around the sales floor, backrooms, counter area, back cooler, and other areas of the store and then surmised a total of $120,000 (or any other total for that matter) with the proper breakdown for each department, this would probably represent the apex of unauthorized estimating. If a counter flat out estimates a given section of a store by either plugging a number or by pulling a number out of thin air based on the way a section looks, this also would be considered unacceptable. If a counter however guesses the quantity on a partially full box of $.25 pieces of candy this typically is considered okay. It’s easy for an inventory to defend this practice, because again it doesn’t affect the accuracy of the audit that much. The question though is how often does this technique get utilized by an inventory counter during an audit. Even further how many different types of estimation techniques are used and how much estimation is there in an inventory count. Most inventory services wind up doing what might be called scattershot estimation, where an inventory is estimated in small portions, but done multiple times throughout a store, so some stuff in one area gets estimated, some stuff over here gets estimated, some stuff over there gets estimated and the question becomes what is the net result of all this on the overall effect of the audit. At what point does the dose of estimation become toxic? How does one go about criticizing the overall accuracy of an audit without getting into specifics instances that the inventory service may be able to properly defend? Sure "glance" counting a box of candy will not make or break any audit, but when is that ever the issue? If that was the only time in an inventory count whan an item was estimated, then truly it wouldn't matter that much. But how often is this the case? How often does an inventory counter resort to estimation just once in an entire store? Counters are creatures of habit they usually wind up counting the same type of merchandise over and over again, and estimation becomes a habit that gets developed by the need for "pragmatism". Estimating inventory is akin to smoking a cigarette in that the real danger is in the habit, not in the singular act itself. A smart inventory service would seem to want to spread their estimation techniques out thin enough so that they will never be guilty of committing any major act of malfecious, and yet can leave counts that still look good enough to be accepted by the client. This seems to the objective of the inventory service, to produce numbers that are close enough to be considered correct and accurate, it’s not necessary to nail a count on any section, in order to get the client to accept your work. Why kill yourself to produce numbers that are dead on accurate, when you can get by with numbers that are ‘reasonable’?

Of course does accuracy really matter, when determining weather estimation techniques should be used or not? Accuracy is not the only issue in play here. Suppose an inventory crew gets to the end of the count and discovers that one section in the store has been missed. A counter could look at past inventory figures and plug in a number based on that. The figure that gets plugged in theory could be fairly accurate, hell it may even be spot on, the fact of the matter is this type of behavior will still be considered unethical and immoral and the reason for this has nothing to do with the accuracy of the end result. Instead it has to do with the concept of integrity. With integrity, the main concern is the manner in which merchandise is counted. How does the integrity of the counting process get judged?
One possibilty could be in the repeated and consistent accuracy and quality that a certain process brings. A low integrity technique can be highly accurate in a given instance, the question here is how often will a technique produce the same high level of accuracy. The notion that a technique can be successful repeatedly again and again is what’s key here. A counter can take a glimpse of a box of candy and estimate that it has 25 pieces in it, and this count may be accurate, but if this method was used again on other boxes, would those counts be accurate? If this method is used again on the next inventory for various boxes, how many of those counts would be accurate? If this method was used the next day, and each subsequent day in every inventory how often will this method be accurate? Each method or technique will come with a certain degree of error. If I employ a method where I pull the box off the shelf and take the candy out to count it, this method will be accurate but more importantly it'll be accurate far more times when it is used. Now there may exist some people who claim they could look at a box of candy and tell you how many there and do this accurately over and over again. Honestly I wouldn’t deny the existence of such people, being able to do that is a real talent, and there are probably are people who possess this ability. But with the idea of integrity, we can also consider the human factor. Just because counter A can look at a box of candy and accurately guess how much is in there, and can subsequently repeat this ability many times over, doesn’t mean that counter B can. The notion of repeated accuracy should also be applied across different counters, as well as across different inventories. A counting method that has integrity is one that produces accurate and quality results time and time again even with different counters doing the count. Even though we may use accuracy to gauge the integrity of a process, ultimately integrity isn’t about what number you come up with, but how you go about obtaining it. Integrity is about an attitude. It's is about having the desire to do things right, you have to want to get down and dirty to pull the candy out of the box, to open boxes to see if they’re full, to check to make sure you have the right price on an item. Integrity is more about doing what’s right or staying within a code of ethics, it’s a belief that this is the way things ought to be done. In any store there will be area that challenge and expose the integrity of the counter, weather it be the candy aisle, pluming parts in a hardware store, drawers full of undergarments, whatever. Maintaining one’s integrity in areas like these is difficult and hard, and more importantly time-consuming. And for the inventory service time-consuming is synanmous with money-consuming. The standard methods of counting usually encouraged by inventory services aren’t the ones that might be considered the most fundamentally sound or with the lowest degree of error, but rather the methods that encourage counters to be productive and most important profitable. Inventory services want to employ people like counter A, who possess the talent to estimate with great accuracy and precision. Honestly inventory services ought to have a boxed candy test for potential new hires. They can just sit new hires down in front of a few boxes of partially full candy, and have them "determine" how much is in each one. This is the way these companies want their people to count, and obviously the best guessers are the ones they want to put out in the stores. But ultimately no matter how much integrity one talks about or attempts to have in the counting process, estimation will always exist, it’s unavoidable. There is no perfect counter, always counting everything with absolute accuracy and precision, never taking shortcuts. Henry is right when he says that reputable inventory services do permit some estimating, the problem is unreputable services will permit even more.