～Understand how physical stocktaking helps retailers in Malaysia maintain the right inventory level, identify shrinkage and inventory overage, and strengthen day-to-day store management.～
Purpose of Stocktaking ②: Improving Inventory Management
Accuracy
Another important purpose of stocktaking is to improve product management and inventory management accuracy. In particular, understanding the actual quantity of stock is directly connected to effective day-to-day store operations and inventory control.
If inventory levels are too low, out-of-stock situations may occur, resulting in lost sales opportunities and reduced customer satisfaction. On the other hand, if inventory levels are too high, products may become obsolete, require markdowns, or be discarded, putting pressure on profitability.
For retailers in Malaysia, maintaining the right inventory level can be especially challenging. Many businesses operate multiple stores and manage a wide range of SKUs across modern retail formats such as convenience stores, supermarkets, hypermarkets, specialty stores, pharmacies, and shopping malls. Inventory movement can also fluctuate during public holidays, festive seasons such as Hari Raya, Chinese New Year and Deepavali, school holidays, year-end promotions, sales campaigns, major shopping events, and tourism-related demand.
Maintaining the right inventory level is not always easy. Retailers must consider various factors such as sales trends, ordering frequency, delivery lead times, shelf space, promotional activities, store location, and seasonal demand. In shopping mall stores, for example, sales peaks may occur during weekends, holidays, or promotional events, making inventory control more complex.
In recent years, more retailers have introduced automated ordering systems. These systems calculate order quantities based on current inventory levels and sales forecasts. However, if the recorded inventory does not match the actual stock on hand, the system cannot generate accurate replenishment orders.
To make effective use of automation, retailers must first ensure that their inventory data is correct. This is why physical stocktaking remains essential, even in stores using digital inventory management systems. Accurate physical inventory count results help correct book inventory, improve inventory accuracy, and create a more reliable foundation for inventory replenishment planning and store-level decision-making.
Stocktaking Helps Identify and Manage Inventory Loss
Stocktaking is also important for identifying inventory shrinkage, or inventory loss caused by factors other than recorded sales or disposal. By comparing book inventory with actual inventory, retailers can detect products that have been lost for reasons other than sales or recorded disposal.Inventory loss may be caused by administrative errors, such as mistakes in receiving goods, sales processing errors, incorrect transfers between stores, employee misconduct, or external theft such as shoplifting. These losses are not always discovered when they occur. In many cases, they only become visible through stocktaking.
There are also cases of inventory overage, where actual physical stock is higher than the inventory recorded in the system. At first glance, this may appear to be a positive difference. However, it may indicate errors in inventory records, store operations, receiving processes, transfer handling, sales registration, or the stocktaking process itself.
Accurate stocktaking helps retailers identify not only inventory loss and shrinkage but also inventory overage. This enables businesses to review operational issues and improve the quality of store management. For Malaysia’s retailers, where multi-store operations, busy sales periods, and large SKU ranges can make inventory control more complicated, regularly identifying these discrepancies is an important step toward improving inventory accuracy and reducing operational risk.
Stocktaking Is a “Report Card” for Store Operations
Stocktaking is much more than simply counting products. It supports multiple areas of retail management, including profit confirmation for financial closing, maintaining optimal stock levels, identifying inventory loss, detecting inventory overage, improving store operations, and preventing fraud.Through accurate physical stocktaking, companies can obtain reliable inventory data that supports effective inventory management. This data becomes an important foundation for daily product management, more accurate ordering, improved store operations, better profit control, and stronger inventory control. It also supports the accuracy of automated ordering systems and other digital inventory management tools, which depend on reliable inventory data to function effectively.
In other words, stocktaking can be seen as a “report card” that reflects the level of inventory management within a store. When discrepancies are repeatedly found in certain categories, brands, or store locations, they may indicate issues in receiving, shelf replenishment, storage control, POS processing, internal control, or staff training.
For retailers in Malaysia, improving stocktake accuracy can contribute to stronger retail performance by helping stores better understand their actual inventory position and inventory movement. This is particularly important during festive seasons, major shopping events, and promotional periods, when inventory moves quickly and errors can accumulate more easily.
For Companies Facing Challenges with Stocktaking
Many companies conduct stocktaking in-house but face challenges such as heavy workload, inconsistent counting accuracy, limited manpower, and operational disruption. These challenges may become more significant for retailers operating multiple outlets, managing large product ranges, or conducting stocktaking within restricted store or mall operating hours.Using inventory count sheets, stocktake templates, or standardised inventory counting procedures can help standardise the process. However, for companies seeking a more accurate, efficient, and scalable approach, outsourcing to a professional stocktaking company can be an effective solution.
AJIS supports retailers as a professional stocktaking and inventory counting service provider, covering the process from product counting to data delivery. With extensive experience and specialised know-how, AJIS helps improve store efficiency and inventory management accuracy.
For more information about our stocktaking services, please refer to the page below.
👉 Stocktaking Service – AJIS Malaysia
Read previous article: Column 1 Why is stocking necessary for retailer – Part 1
Editor: AJIS Group
AJIS Group is a global corporate group led by AJIS Co., Ltd., which has been a leading provider of stocktaking services and retail support services in Japan. The Group operates in the United States, China, Hong Kong, Taiwan, South Korea, Singapore, Malaysia, Thailand, Vietnam, and the Philippines.
With a proven track record of working with more than 3,000 companies and supporting a cumulative total of over one million stores annually, AJIS Group helps address a wide range of challenges faced by the retail and distribution industries. Its services include stocktaking, store operations support, sales floor improvement, and promotional support.
By providing practical services tailored to the market characteristics of each country and region, AJIS Group contributes to improving store operational efficiency and enhancing the value of sales floors.