Scoring inventory existence across Hong Kong retail sites

Retail groups with stores from Causeway Bay to industrial estates cannot observe everywhere. Risk scoring for inventory existence should separate inherent risk (shrink history, high-value SKUs) from control risk (count discipline, system cut-off).

Build a site table first

List each location with last year’s shrink, count results, and whether stock is held on consignment. Without that table, residual risk scores become opinions.

Score existence separately from valuation

Existence and valuation often get collapsed into one “inventory is high risk” label. Valuation may be elevated because of ageing or fashion risk while existence is moderate at well-controlled flagships. Keep the assertions apart.

Let residual risk drive observation

After scoring, observation coverage should follow residual risk, with any board preference for flagship sites recorded as a governance choice — not disguised as a risk score.

Watch cut-off at the DC

Distribution centres feeding multiple brands create cut-off questions that store visits alone will not catch. Include DC walkthroughs when residual risk on existence is elevated.

We use this structure inside Risk Scoring Workshops when retail clients prepare for year-end.