tackling shrinkage to improve your bottom line

Tackling Shrinkage to Improve Tackling Shrinkage to Improve Your Bottom Line Your Bottom Line

Breakout SessionShrinkage Working Group

ECR Europe Annual Congress, BrusselsMay 2004

WelcomeWelcome

Colin Peacock

The Gillette Company

Co-chair, Shrinkage Working Group

Seminar Overview

• Purpose– Enthuse the ECR community about the ECR

shrinkage reduction methodology

• Objectives– Illustrate retailer & supplier collaboration– Promote the ECR Approach– Provide new knowledge

Agenda

• Introduction• B&Q & Plasplugs Case Study• ECR Shrinkage Survey• Sainsbury’s & Menzies Case Study• Key Performance Indicator Research• Makro & Gillette Case Study• Wrap up• Q&A

Designing in SolutionsDesigning in Solutions

Eddie Joyce, PlasplugsGill Yardley, B&Q

B&QB&Q

• Biggest home improvement retailer in the UK

• Employs over 36,000 people

• Turnover last year €5.7 billion

• Profit €546 million

• 1998 B&Q merged with Castorama to become largest DIY Retailer in Europe

• 1999 B&Q opened it’s first store in Shanghai

PlasplugsPlasplugs

Tiling Tools

Knives & Blades

SharpeningSystems

Fixings History: Founded 1970 in the UK

Family owned

Brand Values:Leadership, Quality &

Innovation

Employees:Over 350 world-wide

Turnover:Circa €59 million pa for

the group

Old PackagingOld Packaging

B&Q – Reasons for ChangeB&Q – Reasons for Change

• Sales good – yet room for category growth

• Industry standard packaging - opportunity to improve

• High shrinkage (10%+) due to damages and theft

• Environmental compliance

• Space efficiency – packaging space hungry

• Requirement for suppliers to source tag

• Opportunity to reduce Environmental tax levy

• Customer wants to touch and feel the product

Plasplugs - Reason for ChangePlasplugs - Reason for Change

• Improve visual display• Reduce returns• Introduce hidden source tagging• Reduce dependency on third parties• Improve tactile nature of packaging• Desire to strengthen market leadership

– Innovation and differentiation– Add value to product

Old PackagingOld Packaging

The ProcessThe Process

• Both companies around the table to agree requirements

• Plasplugs CEO involved from conception to delivery

• Support from B&Q Sustainability Team and Commercial team

• Solution evolved over period of time

Evolution of PackagingEvolution of PackagingBlister, Card & Adhesive

Evolution of PackagingEvolution of PackagingBlister Entrapment

Evolution of PackagingEvolution of PackagingBlister-less - Only Card

Evolution of PackagingEvolution of PackagingPackaging Free

Plaspak Demonstration

Old V’s NewOld V’s NewTile Edge Nibblers

Old V’s NewOld V’s NewQuik Tiler

Old V’s NewOld V’s NewTile Files

Old V’s NewOld V’s NewTile Scribe

Old V’s NewOld V’s NewTile Rack

The Benefits of CollaborationThe Benefits of Collaboration

• 50% reduction in shrinkage

• 33% increase in sales (€1.6M retail)

• Space created raised sales further €1.5M

• Customer can touch and feel product

• Secondary use of packaging:– Customers perceive this as ‘added value’– Reduction in environmental levy

Additional Benefits to PlasplugsAdditional Benefits to Plasplugs

• Design innovation has led to patented design solution

• Return on investment within 18 months

• Packaging deliveries now minimal

• Plasplugs are at the cutting edge of innovative packaging solutions

B&Q Tiling Accessories DisplayB&Q Tiling Accessories Display

In SummaryIn Summary

By innovation and collaboration benefits havebeen seen by both Plasplugs and B&Q.

Key Benefits

• Reduced shrinkage and stock loss• Enhanced presentation of the product• Better control of costs• Maximised space and profit per square metre

22ndnd ECR Shrinkage Survey ECR Shrinkage Survey

Adrian Beck

University of Leicester

Background and Methodology

• Last survey in 2000• Need for a new benchmark• Definition of shrinkage

– External Theft– Internal Theft– Process Failures– Inter-Company Fraud

• Stock loss calculated at retail prices

Background and Methodology

• 26 countries surveyed (21 last survey)

• 250 retail companies and 44 manufacturers/suppliers contacted

• Total FMCG sector valued at €1,004 billion

• Sample represents 13.7% of retail companies with a combined turnover of €137.2 billion

Topics Covered in the Survey

• Counting the cost

• Location of the problem

• Extent of co-operation

• Measures used to tackle shrinkage

Counting the Cost

Sector % of sales

Value (€ billions)

Retail 1.84 18.5

Manufacturer 0.57 5.7

Total 2.41 24.2

Counting the Cost

• Total loss equates to:– €66 million per day– €46,000 per minute (€4.1 million for this seminar!)

The Retailing Shrinkage Iceberg

51%

49%

Unknown Loss

€9.5 billion

Significant increase in known loss

Location of the Problem

€5.7 Billion €1.2 Billion €17.3 BillionTOTAL

€24.2 Billion

24%

Manufacturer Distribution

5%

Retail Distribution

71%

Retail Stores

+ + =

Causes of Retail Stock LossInter-

Company Fraud

7%

External Theft38%

Internal Theft28%

Process Failures

27%

Retail Company Co-operation

Spending on Stock Loss

Measures Value Per cent

Contract security staff € 950 million 33

In-house security staff/loss prevention/audit team € 419 million 14

Electronic tagging systems € 370 million 13

Closed circuit television € 298 million 10

Intruder alarm systems € 182 million 6

Cash protection equipment: safes, caches € 170 million 6

External security measures: shutters, bollards, fences € 164 million 6

Staff training on stock loss € 151 million 5

External audit companies € 44 million 2

Specialist display equipment € 29 million 1

Other € 133 million 5

Total € 2.9 billion 0.29

Causes and Spending on Shrinkage

60

38

27 28

9

26

4 7

0

10

20

30

40

50

60

External Internal Process Inter Company

Spending

Cause

Other Survey Highlights

• Companies that:– have a corporate policy– prioritise stock loss– provide bonuses for good stock loss results– have good intra-company co-operation– carry out shrink reduction projects…

… have lower levels of shrinkage

For a copy of the final report For a copy of the final report contact:contact:

Adrian Beck: [email protected]

The UK Magazine MarketThe UK Magazine Market

An Insight Into ShrinkAn Insight Into Shrink

2525thth May 2004 May 2004 David Morton Chris Price

WELCOME

http://www.sainsburys.co.uk/

A story about addressing SHRINK In the UK Magazines sector

Sector complexity .. Process Issues How working together with wholesalers achieved results How Sainsbury’s managed to reduce shrinkage by 25% Explain how shrink on News & Magazines

is a broader Industry issue Industry-wide approach .. Results .. €3m+ Approaches, Learning's & Blue Book

EXECUTIVE SUMMARYAims & Structure


The UK Magazine Sector

•Small number of big players•Big number of small players

Medium

Publishers Wholesalers Retailers Consumers

Small

LARGE

55,0003 major5 Independent100+ Depots

10 Main Publishers3,000 Titles

160 Categories

WHS

DN

MD

Ind

The Magazine sector is worth €2.5 Billion Euros per year


International services group .. time critical logistics: T/O €1.8bn

Newspaper & Magazine distribution (UK) .. 4,000 employees

Menzies Distribution - The Facts

1500 van routes .. Every morning To 22,000 retail outlets .. From 30 depots 520,000 lines / 24 hours Unsolds scanned every day.

JIT .. Cross Dock .. Consolidation .. & .. Reverse Logistics


Sainsbury’s – The Facts

Sainsbury’s stores sell over

1200 magazine titles A UK Market share of 5.5% Top 100 titles count for

74% of turnover Losses running at over

6% of sales

WE HAD A PROBLEM!


Sainsbury’s - First Steps - Alone

Initial internal review :

Complex area .. Not main focus of Supermarkets

Inconsistent Store Procedures

High level of ‘Rejected Returns Credits’ (Sale or Return)

Wholesale supplier input .. End to End process

You will see . . How ECR provided the “introduction” agency

You will hear. .How Sainsbury’s were not alone


The SectorThe Publisher & The Product

The Product Each issue uniquely ‘created’ ..new barcode

Magazines are not like tins of beans.

The Publisher Determines look, feel, & quantity ‘created’ Places (Pushes) into the market .. advertisers, not just sales Sale Or Return … reverse logistics

The ‘Creative’ mix means risk of: Poor attention to practical detail …


Product Challenges

£2 €2.90

£1.75 €2.55


Product Challenges

Disney and Me PC Gamer Presents


Sector Tensions & Shrink

Market Tensions !!!

Shrink hit the Industry agenda late 2002 … and went TOP!

Retailers clear… “It’s Publishers’ and Wholesalers’ fault”. Publishers clear…. “No it isn’t” Wholesalers …. The meat in the sandwich!

Industry-wide collaborative project group formed Establish .. Define .. Recommend .. But an uneasy background!


End-To-EndIndustry-Wide Shrink Initiative

A Meeting of Minds? ……. More a Clashing of Heads!

Deal in Facts …. Not Noise! Definition … Principles … and Method ECR Blue Book … Recipe !

Our Principles All committed .. Solve .. Don’t just shift the problem! Overall structure .. prioritise


Industry Shrink GroupModus Operandi

Adopt a process

Research Map key processes, together Establish interdependences Highlight pressure points Measure .. Identify costs Identify solutions .. Prioritise

Good News (of sorts) We were not alone .. Shrink affects all supply chains

0.Wake Up0.Wake Up

2. Map &Measure2.Map &Measure

4. Develop Solutions4.Develop Solutions

5. Implement5.Implement

6. Evaluate6.Evaluate

1. Plan1. Plan

3. Analyse3. Analyse


End-To-End RoadmapFishing for Detail

SUPPLYISSUES

LIVEPRODUCT

Wholesalersupply

process

Systems/Information

Damage

In storeprocess

Productcharacteristics

Theft

Incorrect pricefile H/O

informationupdates

Unrecognisedproduct on file

title v cover

h/o informationupdate lateTitle

description/cover

mismatch

Cover price/filemismatch

printing error

W/Smisdelivery

pooraccountability

poorly labelled

confusion overrelated box(forecourt,shop save)

inadequate vanlighting

collusionbetween driver

anothercustomer/outlet

W/S mispicksover/under

W/S miscount

picks wrongtitle

pooraccountability

publisherbundle

mispackover/under

W/S mis labelfull/oddsbundle

Claim for shortsupply not

made/madelate

staffawareness

process

Booked-inagainst wrong

suppier

dual W/Ssupply

staffawareness

Booked-inagainst wrong

shop a/c

shop save/forecourt

staffawareness/

processNot booked-in/

checkedstaff training,discipline,holiday /sickness

poor stockcontrol system

Rejecteddelivery(unacceptable

condition)

Individualphysical theftin depot

In transitW/S to retail

printer/publisher/

carrier to W/S

Collusion

with consumer'sweethearting'

at back door

Fraudulentclaim of short/non delivery

SHRINK - CAUSE & EFFECTSUPPLY ISSUES (LIVE PRODUCT)

W/Sdocumentation

difficulty incheckingsupplies

procedures

Too muchproductsupplied

single delivery(not SBR)

unauthorisedtitles /excesscopy supplied

local v H/Orange disjoint

In storestockroom

display

staff

consumers

staff poor productcovermount/packaging

poor transitpackaging

misleadingtitle

other liveproduct

supplement

poor coverpositioning

price variantswith same bar

code

wrong info onfile

Display/handlingproblems

non-standardshape/size

W/S misplacepick

incorrect info.from publisher

late info. frompublisher

first time titlehas appeared

Scanninginaccuracy

use of dumpkeymissed product

inherent errorrate

in full or part

Staff coverage

lack ofinformedcontinuity

Specialaccounts

home delivery/shop saves

lack of auditproduct not

returnedLack of audit

lack ofprocedure or

facts

Robbery

poor security

cover mountremoval

abuse honestybox

parcel theft byanother

insecure backdoor area

planned oropportunist

W/S orpublisher

new title/oneshot

bar code price

Build a structure to identify,

log & relate ‘points of failure’

RETURNSISSUES

OFF-SALEPRODUCT

Wholesalerreturnsprocess

Systems/Information

Theft

Damage


In storeprocess

Bar code

not readidentifies

wrong issue

Not collected

Bundles lost intransit

Mis-scanover/under

Bundleunidentified at

scanno label

W/S not recalltitle

Validationrejects credit

too manyreturned

too late

time windowtoo tight

wholesale tooslow to scan

W/S not supply

firm sale

product statuschange

Fraudulentclaim

Theft frommade up

returns parcel

in transitat W/S pre-

process

fromstockroomat back door

No covermount

Cover damage- no bar code

Returns note not actioned bystockroom

not received bystockroom

Returns notsent backproperly

not dispachedlost in

store, backdoor

booked outwrong a/c

Returns notesincorrectlycompleted

poor title/issueI.D

poor staffawareness

miscounted

returns notecompleted bymore than oneperson or at

different times

Staff notreturn

product /return late

promotionalpointstaff canteen

staff dump

Full bundleshort(assumed

quantity atretail-individualcopy scan at

W/Sloose product

poorlypackaged partworks

muliti supplier

Opt not toreturn

booked outwrong W/S

SHRINK - CAUSE & EFFECTRETURNS ISSUES (OFF

)

identifieswrong title(co-

wrappedsupplement)

Collusionat back door

between driver/another outlet

poorly attached

poor handling/packaging

staffawareness

proceduresand awareness

Multi-locations

customermisplaced on

display

stockroom

system error

regional/formatvariants

Non standardshape/size

makesreturningdifficult

fromstockroom Lack of audit

completionerrors

Staff coverage

weekendholiday

sickness

Lack of audit

Vouchers notsent backproperly

too latepoorly securedto wrong W/S

from wrongaccount

internaltransfer fromanother store

forecourtaccount

sub retail account

home delivery/shop save

discounting/give away to

clear

stores notreturn known

late/f/s product

1st f/s issuepartwork

off site/remotestockroom

crowdeddisplay

poor initialshelf fill/

replenishment

product fallbehind display

local weekliesset-up asdailies for

recall

unidentifiedparcel keyedafter cut off

varying timewindows

queryresolution

Stickers

manuall count

W/S

publisher

retail poorlylabel

left wrongplace

not left out

operator error

Frequency ofcollection

affects W/Sprocess time

affects 'at risk'time in shop

covermountmissing from

partwork

Stickers

singles/small RETURNSISSUES

OFF-SALEPRODUCT


Systems/Information

Theft

Damage


In storeprocess

Bar code

not readidentifies

wrong issue

Not collected


Mis-scanover/under


scanno label

W/S not recalltitle


too manyreturned

too late



W/S not supply

firm sale


Fraudulentclaim

Theft frommade up

returns parcel


process


No covermount






store, backdoor

booked outwrong a/c


poor title/issueI.D

poor staffawareness

miscounted


different times

Staff notreturn



RETURNSISSUES

OFF-SALEPRODUCT


Systems/Information

Theft

Damage


In storeprocess

Bar code

not readidentifies

wrong issue

Not collected


Mis-scanover/under


scanno label

W/S not recalltitle


too manyreturned

too late



W/S not supply

firm sale


Fraudulentclaim

Theft frommade up

returns parcel


process


No covermount






store, backdoor

booked outwrong a/c


poor title/issueI.D

poor staffawareness

miscounted


different times

Staff notreturn



staff dump



W/Sloose product


muliti supplier

Opt not toreturn

booked outwrong W/S


)


wrappedsupplement)



poorly attached


staffawareness


Multi-locations


display

stockroom

system error





completionerrors

Staff coverage

weekendholiday

sickness

Lack of audit



from wrongaccount


forecourtaccount

sub retail account



clear


late/f/s product



crowdeddisplay


replenishment



recall


varying timewindows

staff dump



W/Sloose product


muliti supplier

Opt not toreturn

booked outwrong W/S


)


wrappedsupplement)



poorly attached


staffawareness


Multi-locations


display

stockroom

system error





completionerrors

Staff coverage

weekendholiday

sickness

Lack of audit



from wrongaccount


forecourtaccount

sub retail account



clear


late/f/s product



crowdeddisplay


replenishment



recall


varying timewindows

queryresolution

Stickers

manuall count

W/S

publisher

retail poorlylabel

left wrongplace

not left out

operator error

Frequency ofcollection

affects W/Sprocess time

affects 'at risk'time in shop

covermountmissing from

partwork

Stickers

singles/small

LIVE SUPPLY ISSUES RETURNS ISSUES


Prioritising Hot Spots & Quick Wins

Score Time / Effort to Address (A)5 Can do easiliy & cheaply / Weeks4 Needs some effort but little cost / Quarter3 Minor systems & protocol effort2 Requires development over months1 Major systems & Commercial issues

Score Severity of Failure (S) Probability of Occurance (P)5 Major Loss Impact Daily / Inevitable4 Some Loss Impact Weekly / Repetitive3 Individual Item Loss Every few weeks / Occasional2 Possible / Uncertain Loss Every few months / Rare1 Little Impact Rare & Irregular

Severity x Probability = Focus Factor Focus x Addressability = Quick Win Factor

Objective Priorities Hot Spots Quick Wins


Objective build up as a team .. Scoring .. Reviewing .. Etc

Mutual, logical view .. As part of Big Picture

Small steering group Manage specific work parcels Firm, objective co-ordination Rigorous & robust

Product Identification

Supply Management

In-store processes

Key Areas

Credit Claims Period

Product Identification

Supply Management

In-store processes

Key Areas

Credit Claims Period

Industry From Analysis to Actions

Leads To 4 Key Action Areas


Credit Claims: New ‘synchronised’ period Benefit ~ €3m p.a. to Retail from July 2003 .. -23% Audited … Hard wired … Sustainable Step Change

Key Achievements to Date

Publisher Notification FormDate 04-Mar-04Publisher SeymourTitle on Calendar Disney & Me specialTitle apparent on magazine

Finding Nemo

Issue Finding NemoOn Sale - 27-Feb-04Recall 09-Apr-04Price £1.99Barcode 977146959500002

Product Identification: Error Reporting Measure .. report .. inform .. educate Web based ‘National Title File’ www.nationaltitlefile.co.uk


Supply Management: Sales Based Replenishment Modelling & pilots .. lead to Best Practice Guide Menzies Test .. 6 depots, 218 customers, 100 titles Benefit .. Sales +2.6 %, Returns -51%

Key Achievements To Date

In Store Process: Best Practice Simple guide produced to benefit all retailers “3 Areas where Shrink eats away your profits” “If you do nothing else .. Do This” “Golden Copies!”


ECR .. Leads toJoint Sainsbury’s-Menzies ActionSainsbury's & Menzies Shared common Roadmap approach

Address holistically .. Big Picture .. Not Knee Jerks Resource jointly .. Sainsburys team + Shrink Doctor Leverage from Industry work

A clear joint Brief Aim for understanding and sustainable actions Target ‘Hot’ stores Map .. Benchmark .. Quick Wins


Dual Supply

Stock Holding

Stocktake

Theft \ Security

Poor Data Management

Returns Process

Colleague Issues

Sainsbury’s Issue Identification

Key Issues

Procedure & Training

Processes

Management Information

Mapping, Analysis & Risk Assessment points to


Actions & AchievementsProcedure & Training Introduced a supplier funded Colleague handbook Built Wholesale relationship & Raised our Internal profile

Process ‘Invoice Matching’ .. More robust store charging system Simple & more robust stocktaking process

Information Produce timely Management information throughout estate Wholesale data feed of “rejected” returns

Shrinkage down 25% .. Sales up 10% .. At Pilot stores


Key LearningsSainsbury’s-Menzies

Collaboration Got stuck in .. Dug out the facts .. Learned from the front line

Whole new meaning to the word “observe” .. Objective appraisal

Did it for real bottom up, In detail .. Identified the basics

Knee Jerks – Only deliver short term results

Sustainability .. Comes from End to End process understanding

Retailers / Wholesalers encouraged to do more

There are NO short cuts!


Key LearningsIndustry Collaboration

Industry-wide Collaboration can be done .. But it’s a Journey!

Requires clear systematic focus .. And the right people Blue Book .. supported move from Subjectivity to Objectivity You CAN move from ‘Them & Us’ to … ‘US!’ Technical analysis .. & .. ‘People’ issues Its about Solving! .. Not shifting! Within the Big Picture .. for Sustainability

The journey continues .. We are still walking & talking together


In Conclusion


Measuring Stock Loss:Measuring Stock Loss:Developing a KPIDeveloping a KPI

Dr Paul Chapman

Cranfield School of Management

Issues to Consider

• A clear definition of “Stock Loss”

• The scope of the issue

• Method of calculation

• Methods of valuation

• Focused management action

A Clear Definition of “Stock Loss”?

• Internal theft + external theft + process failure (including waste) + inter-company fraud

• All inputs that cannot be accounted for

The Scope of the Issue

• Holistic, supply chain view:– raw material to shopper, e.g. the cow to the fridge, including

returns

• Being practical:– Limit the start of the supply chain to either:

• Declared production in the factory• Product in manufacturer’s DC

– Limit end point in the supply chain to either:• The shelf• The checkout

Method of Calculation

• Total Stock loss = Known loss + unknown loss– Discrepancy between book stock and physical stock– Net inventory + net movements– (opening stock – closing stock) + ((purchases + incoming

transfers) – (sales + outgoing transfers))

• Where known loss:= Known theft processed + Known errors processed(including: write offs; damage; donations; mark downs; cost of sales

adjustments; out-of-date; tasting)

Categories Included

0

25

50

75

100

Pe

rce

nt

Store issuesSupply chain

• Value of loss calculated at either:– Sales value

• Gross including VAT • Net excluding VAT

– Purchase price– Transfer price

Methods of Valuation

Total stock lossSales

X 100%

• Loss as a percentage of sales

0

5

10

15

20

25

30

35

40

45

Pe

r c

en

t

Retail SalesValue

Cost Price Cost Price + Other

Method Used

To Conclude: Deliver Focussed Action

• Use your data– Top level KPI reveals total opportunity– Cascade measure to expose under performance

• Know how to take action– The ECR Roadmap

• Dedicate the capacity to implement

• Drive progress against targets

Makro & Gillette: on track with Makro & Gillette: on track with the ECR Shrinkage Roadmapthe ECR Shrinkage Roadmap

Werner Cooreman, Makro

Dieter Mertens, Gillette

Programme

• Profiles

• Collaborative objectives

• Phase 1: defensive

• Phase 2: innovative

• Phase 3: the ECR shrinkage roadmap

• Take away

Profiles: the retailer - the supplier

> 1,2 billion €

> 70.000 SKU

> 3.600 employees

> 1 million customers

Collaborative objectives

Evolution of Objectives through phases of improving collaboration

Less Shrink

Less Shrink + more sales

better performance

mid 2002

mid 2003 2004

Phase 1: defensive

• PHASE 1:– Makro Call– Shoplifting– Safercases

ResultsShrink: - 80% (approx.)

Phase 2: Innovative

• PHASE 2:– Gillette Call– Shoplifting + Back office – Clamshell C&C pack

ResultsShrink: stable at 0.2%

Sales: + 131% (pilot test)

Phase 3:Using the Roadmap

• PHASE 3:– Full Collaboration– Holistic approach– Store supply chain solution

ResultsShrink: - 20% (Q1); ongoing...Sales : + 18% (Q1); ongoing...


0. Wake Up

2. Map &Measure

4. Develop Solutions

5. Implement

6. Evaluate

1. Plan

3. Analyse

Illustration Road Map by video

Plan

SHRINKAGE SALES

- 10 % + 20%

October 2003 October 2004

Mach3 family

Map & Measure

-2000,00

-1500,00

-1000,00

-500,00

0,00

1

GILLETTE CONTOUR PLUS 10 MESJ ES GILLETTE GII 10 MESJ ES GILLETTE GIIPLUS 10 MESJ ES GILLETTE MACH 3 12MESJ ES

GILLETTE MACH 3 4MESJ ES GILLETTE MACH 3 APPARAAT GILLETTE MACH 3 APPARAAT COOLBLUE GILLETTE SENSOR 10 MESJ ES

GILLETTE SENSOR EXCEL APPARAAT GILLETTE SUP.SILVER 10 MESJ ES

Focus on Mach3 Family (12 pack & 4 pack)

1. Camion komttoe aan de V

2. Chauffeurbiedt pakbon in2 ex aan loket

aan

3.Ordercontrolein BORIS door

bediende

4. Leveringkrijgt GOnummer

5. Chauffeurkrijgt pakbonmet stickervoor 'Makro'

terug

Exemplaar metsticker voor

leverancier gaatin bakje

6. Chauffeurontlaadt pallet(geen zegel)

7. Chauffeurbiedt pallet aanbij ontvanger

8. Ontvangervoert 1e

Controle uit

Indien leveringklopt, worden

de docgewisseld door

ontvanger

8A. Controleerthet document

8B.Telt hetaantal

eenheden/collivermeld op bon

8C.Vergelijkt ditaantal met

paklijst9. Chauffeurvoert door naar

transitruimte

NAAR 2eCONTROLE

MAKRO - GILLETTEPILOT FMEA FOOD

DEURNE

PROCES FLOW CHART

1. ONTVANGST

AnalysisProcess Map

Process Map

Root causes analysis Failure Mode & Effect Analysis

Possible Solutions

Gillette 10 step process

Implementation

4.check delivery

1.secure storage

5.visible location

3.fast tracking to secure area

Implementation

6.Anti-theft fixtures

9.staff awareness

7.frequent replenishment

8.regular counting

Evaluation

• Overall preliminary results:

Shrink (3 phases): - 85%

Sales (3 phases): + 18%

• Positive acceptance on the workfloor • Roll out solutions (10 Steps) in other stores• Final evaluation due October 2004

Take away

• Use of the roadmap requires commitment

• Loss prevention is about simple issues: stock control, identifying opportunities,…but with great impact

• Collaboration works

Thank you for your attention !

Wrap upWrap up

John Fonteijn

Royal Ahold

Co-chair, Shrinkage Working Group

An Invitation ...

• Join our working group

• Use the Road Map

• Share your results

ECR Shrinkage Award

• To the person / organisation that has made the most significant contribution to shrinkage reduction in 2004 – 5.

• Judging criteria:– Approach– Results– Dissemination– Sustainability

Thank you

Q&A

tackling shrinkage to improve your bottom line

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