To: JD Finish Line (JDFL) – Store/Area Managers
From: D&amp;T JDFL Engagement Team
Subject: JDFL Inventory Count Instructions
Purpose of the count
The purpose of our procedures is to reperform the count and agree our count to what has been scanned
into Zebra to evaluate the accuracy and completeness of the inventory physical being conducted.
Prior to Arrival
JDFL headquarters is aware of the store locations we have selected and will communicate the
information. However, we will have our representative contact your store to confirm the time of the count
and any applicable logistic information (i.e., how to get into the store etc..). We will plan to arrive an hour
after your count starts (around 7:30pm for evening count and 7am for morning counts) to give your team
the time to get set up and have some scanning done before we start our procedures.
Upon Arrival
Upon arrival, our representative will start by making selections from the area/stickers already scanned
and closed by your team. We will count the total number of items under that sticker and then make one
UPC/SKU selection and count all instances of this item under that sticker location (Floor-to-Sheet - FTS).
After the FTS count has been completed, our representative will plan to obtain Sticker Detail reports for
our FTS sticker selections and agree the quantities counted.
We will also do this process backward by obtaining the Sticker Summary Report, make sticker selections,
and obtain the Sticker Detail report for each of those stickers. We will then make a SKU/UPC selection
and count all instances of that item on the report. We will go to each sticker selected and confirm the
quantities on the reports. (Sheet-to-Floor).
We will make 15 sheet-to-floor and 15 floor-to-sheet selections.
In case of Variances
During this process, we are effectively counting after your team has performed their count. Because of
this, we are not expecting a lot of variances. In case we come across a variance (either on the total
quantity or on the SKU/UPC selection), we will recount with the store manager in order to confirm our
count. It might be that we are looking at the wrong SKU or have not properly identified the area the sticker
location covers.
In the instance our count and the variance has been confirmed, we will expect the sticker to be re-opened
and rescanned to have an accurate count. We will also obtain a new sticker detail report to confirm that
the updated quantity is correct per our count.
Our representative will then make 3 additional selections per variances each way (FTS or STF).
Documents to be provided)
1. Sticker Summary Report – This report shows all sticker numbers and quantities at the sticker
location.
2. Sticker Detail Reports – This report shows all of the individual UPC codes scanned at a specific
sticker location. The quantity shown on this report should tie to the sticker summary report.
a. We should have 30 of these reports at minimum (15 STF and FTS) plus any additional for
variance update and extra selections.

3. Final Sticker Summary Report – This report should be obtained at the end of the count.

Contact information.
Contact me with any further questions on my cell/email: <PRESIDIO_ANONYMIZED_EMAIL_ADDRESS>)/ (317) 457-1408. Thank
you for your time and help!


Above is the process from the external auditor… I want to use this and the below to come up with the why I can email to all store managers.  Make this in shoe retail speak. Keep the why short like below. 

The why:  Deloitte is our external auditor ensuring our financial statements are accurate within a material variance (variance that would not effect the financial statement numbers; larger the financial statement larger your materiality would be)  They look at this from a group level.  IE they do store for all of JD Group around the world and Deloitte coordinates this within each country.  This is to evaluate groups inventory processes around the world.  This is not a test to see if correct, this is a test to see how accurate our process is.  It is important to be fair truthful and honest.  One missing sku at a location is nothing.  What is important is that the scan process is run accurate and all inventory adjustments are being made accurately and timely.  They are not testing if shrink exist but do we have process where we are accurately reflecting our inventory numbers.