Too often, there is a failure to acknowledge achievements during the audit process, which as a result tends to emphasize a negative undertone. This tendency can and will influence the entire process. Read More
In the retail environment, the term “shrink” or “shrinkage” refers to the difference between the amount of merchandise (or inventory) that the company owns on its books, and the results of a physical count of the merchandise. Shrink can come in many forms, and impact a business in many different ways. The primary causes of retail shrink include operational errors, internal issues, and external losses.
• Operational errors can involve POS software glitches, paperwork issues and other operational missteps. These incidents typically occur when processing a transaction, receiving merchandise, shipping merchandise, or taking inventory.
• External losses can involve theft by customers (primarily shoplifting), issues involving vendors, or other incidents that pertain to those not working for the company.
• Internal losses are the result of incidents that involve store associates and other company employees who take advantage of opportunities to steal from the company.
In addition to theft issues, damage, waste and spoilage can directly contribute to a company’s losses.
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When merchandise is stolen or otherwise unaccounted for, it not only impacts the company as a result of the missing product, but also skews our inventories in other ways. This not only impacts current sales, but also affects product replenishment and future sales as well. This can have a significant impact on the bottom line, and a direct influence on the health of the company. Every year, shrink issues cost retail businesses tens of billions of dollars. This is a real and growing problem that affects all of us in a variety of different ways.
This is a much more complicated problem than simply accounting for the theft of merchandise and the direct loss of profits. Managing shrink is a critical aspect of inventory control, which involves the management of the supply, accessibility, storage, and delivery of the company’s goods. As a result, retail shrink reduction strategies require a multifaceted and broad-based approach in order to successfully manage the process.
“We all know what we have to do together to reduce food waste, but it’s not happening.” Read More
Between the physical and online space, ever-diminishing timelines, and the possibilities of pinpointing stock on its return journey (the so-called reverse logistics model), you have all the ingredients for a parallel universe where nothing is quite what it seems. Read More
As the industry transitions from bricks and mortar to “bricks and clicks,” the capabilities of existing systems are being stretched thin, and many retailers have not fully integrated the new technology required to manage loss and reduce shrinkage effectively in an omni-channel world. Read More
You are driving to work as a supermarket supply-chain manager. The hot weekend weather has continued, it’s a lovely Monday morning, yet you’re surprised when your boss calls so early. Agitated, he shares how he just discovered from the CEO that all stores were reporting a massive sales loss because Read More
Can ignoring the causes of shrinkage and refocusing strictly on sales solve our inventory issues? Read More
The three major causes that contribute to inventory shrink in any retail operation are internal theft, external theft, and operational compliance. An effective loss prevention program must focus on all three of these areas. Read More
At a time when store margins are under intense competitive pressure, retail shrink can make or break a retailer’s bottom line. But retail shrink numbers are vulnerable to blind spots and imprecise metrics. Read More
If you work in inventory control, your job description likely includes some combination of the responsibilities described in this post. Read More
There is no agreed-upon definition of what constitutes “shrinkage.” Most estimates are based only upon measures of merchandise losses where the cause is unknown. The total retail loss concept offers a new definition of loss. Read More
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