Shortage control efforts for cargo loss prevention should begin with a sufficiency review. The first step of this review is to take a closer look at the parts of the business in which exposure to shrink can occur. Shortage control measures cannot be deployed to reduce or eliminate loss until shrink exposure areas are identified.
In an article in the July-August 2016 issue of LP Magazine, Erik Nelsen, supply-chain loss prevention manager at JCPenney, establishes three primary business areas of the supply chain in which shrink exposure is likely to occur or where shortage control may be insufficient. These areas include: operational processes, administrative policies, and/or physical controls and hardware.
When these broad areas of exposure are analyzed properly at the start, appropriate measures and tools can be implemented to remedy shrinkage issues. From the article:
“Beginning a shortage control sufficiency review includes first establishing an understanding upon which all shortage control efforts will be built. That understanding is this: the goal for the loss prevention professional is first to identify exposure to shrink within the business type. Exposure simply means an area, process, practice, or condition in which or because of which loss is either occurring or likely to occur. Once exposure to loss is identified, shortage control measures can be directed at the exposure to either reduce or eliminate it.
There are three categories or areas of exposure analyzed in this approach—operational exposure, administrative exposure, and physical exposure. The nature of these relatively broad categories is a symbiotic one; affecting one category may produce either a favorable or unfavorable effect on one or more of the others.”
Check out “Supply-Chain Shortage Control” to read the full article and learn how an alignment between these business units can ensure shortage control sufficiency in the supply chain. You can also visit the Table of Contents for the July-August 2016 issue or register for a free subscription to the magazine.
This article was originally published in 2016 and was updated September 12, 2016.