We just finished our inventory, and kinda odd the numbers don't add up. We are missing a lot of stuff, that the system shows we have, and I am talking big items. Maybe this is how Lowe's cheats on taxes!!!
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Pretty normal to false the inventory. As stated below it's easily done. I can't tell you how many times on IRP's I said no only to show up again next week and the following week. They keep ignoring the missing stuff. A week after inventory and we were missing stuff. How does that happen?? Well I I'll tell you how. When you ignore stuff being wrote off it drags on. No one is checking ANYTHING. They have been cooking the books for a long time. Hoping Amazon buys them and realize after what a Mess of a company it is..
Yeah, it's a fun little tactic called "false overages".
Essentially, the inventory manager has a running number that shows how much money in inventory you are short or over, so the store manager and LPOSM are constantly updated on how much inventory they are shrinking or swelling. The reports come in 3 tiers, the first one is the $60 dollar report which is items that cost more than $60. This is the longest and most arduous report with the most items that everyone is running around counting. Once this is done then the "dollar report" drops, which is essentially small items with low costs from $1 to $59. This report is not worked anymore so if the outside inventory team botches the count it's your problem. Finally, the thousand dollar report will drop which is worked by the LP teams. This generally when the magic begins. These items are all over a thousands of dollars and consist of huge money overall, and where it becomes easy to skew the numbers.
Missing 4 riding lawn mowers? Oh wow we found them! (Not really we will just write on this paper that we did!)
Miscounted 5 refrigerators that should be corrected and took of the inventory count? We will just gloss over that and pretend they are there.
The best part is there is no validation on the end of the inventory manager. They either don't care or are helping cook the books and look the other way. It's ridiculous because massive errors take place all because they are too lazy to get off their a-- and walk to verify anything.
You are probably wondering what happens after inventory, with all of these false inventory pieces being placed into inventory, well the answer is essentially nothing. The items are inevitably cycle counted and ended of the the $200 report. Usually the LP already knows they are false overages so the items are billed out and documented as "false overage: miscount at Inventory" in their inventory tracking system. The LPOSM does not even pay attention and no one asks any questions and the cycle continues.
The open status trends way over inventory budget, everyone panics and then they cook the inventory in literally the last hour of inventory.
I have seen this practice used over and over again and again, year after year until suddenly you can't do it any more and multiple stores are losing money hand over fist. Regional managers are having speeches talking about having "a tough year" and how plans are in place to turn it around.
There is no incentive to have inventory correct, there is only incentive to make budget at any means necessary. So if you are a good store with good management and good LP who does things honestly and report accurate inventory numbers, you are likely to be reprimanded or have your job at risk. But if you lie and cheat and create false inventory you get a bonus and a pat on the back.
I could go on more about this but you get the picture. From what I have seen the company is making huge inventory losses and covering it up intentionally.