Stocktaking is one of those chores which you have to do, but which everybody hates. One man's chore, though, is another man's fortune. If a job must be done, there's a market: and if people dislike the job, there's a demand for somebody else to take over the task.
When Nick Holland-Brown joined The Orridge Group, which earns its living by taking stock, he didn't exactly follow this line of reasoning. Accident led to opportunity. Now 46, he came in 26 years ago through family connections. The company had been founded by Benjamin Orridge, Queen Victoria's pharmacist, who reckoned it was a good idea to act as agent for the sale of pharmacies.
The first stocktaking work was for pharmacists, still considerable Orridge customers. For all its boredom, counting stock accurately is a foundation of good business - and the more modern the business, the greater the need. Holland-Brown says that with electronic point of sale (now used by all up-to-date retailers) 'it starts going wrong from the day you get it right.'
In theory, the EPOS system accurately records every sale and subtracts the item from the inventory. In practice, there's 'shrinkage', 'leakage' - and just plain error, when the wrong entry is made. That produces 'all sorts of ripples down the whole chain of management functions.' You haven't got enough of the right stock, you have too much of the wrong stuff, and your reordering goes haywire.
A lot of Orridge's customers aren't like Tesco, Next, B&Q, etc., but are small multiples or single stores. They need an annual count, whose accuracy is just as vital for protecting their businesses. Errors can reach frightening size. About 1% of total UK retail turnover 'disappears' from inventory by various means: that's a gigantic sum, but you can do much worse than 1%.
Holland-Brown recalls one client with a large warehouse whose stock proved wrongly valued by half-a-million pounds. The error was in the company's favour - but don't count on being so fortunate. Since accurate stock counts done by a specialist outsider can cost 10 to 15% less, they're doubly attractive. But as with all businesses today, there's more to success in stocktaking than meets the eye.
It's not enough to spot the latent or existing demand for a job that people are prepared to 'out-source' to others. The service has to be developed to fulfill its potential. Some ten years ago, Holland-Brown formed the necessary 'vision' of what Orridge could become. 'We could see what could be achieved' by using the latest electronic technology. Unfortunately, the key hardware - hand-held computers - couldn't then be had at 'a sensible price.'
Once prices fell, Holland-Brown was able to transform the operation. Today he can put as many as 200 people, full-timers and part-timers, armed with their hand-held marvels, on a big stock-count. He's also on the third generation of software, developed by Orridge itself, and highly sophisticated - it must be to cope with the great variety of computer systems used by clients.
The sophisticated approach wasn't adopted for fun, but from sheer necessity. Holland-Brown faced a familiar form of competition these days - single-handed operators, working from home with zero overheads, and selling on cut prices. To make this especially galling, many one-man bands were former employees; 'we've probably trained most of the stock-takers in the country.'
Try to compete with this kind of competition, and you end up dead: the low prices won't support the overhead of a properly established company (Orridge has five offices). The answer was to compete, not on price, but quality. 'That led us into a different, and more satisfactory market, and gave us a viable, good, modern business that will last into the next century.'
Thanks to steady acquisition of shares, starting in 1971 ('I gradually bought people out'), that business is wholly in Holland-Brown's control. The key end-1987 share purchase, using borrowed money, was 'somewhat of a gamble'. But it 'concentrated the mind' on matters like having 'good people and training them. It's nice being able to control all that'. Otherwise, you can't pursue a 'mission for quality' - and (which is Orridge's key lesson) 'you can't survive in any service without it.
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