Lowe’s Intranet-Based LP Audit


Not too long ago, I met with our director of store loss prevention, Jeff Fulmer, to review results of a store compliance audit, which we prefer tocall walkthroughs. He handed me the detailed results…handwritten on a napkin from a fast-food restaurant!

You may think I’m kidding, but I’m not. I’m sure many LP directors have had similar experiences, because budgets and access to IT has always been a struggle inside retailers, especially for loss prevention programs.

This experience with manual, handwritten walkthrough results clearly was unacceptable if Lowe’s was going to successfully manage loss prevention and safety compliance in over 700 stores spread over 40 states. We realized that we had our own home improvement to tackle.

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A Strategic Solution

Like every other retailer, Lowe’s is under relentless budget pressure. Oftentimes, loss prevention departments are in the position of not just making the most of our resources, but of doing more with less. In this environment, we had to be both creative and diplomatic in developing a solution for systemizing our walkthrough results.

What I mean by “creative” is that we had to carefully consider the resources at our disposal both inside and outside the company and how we could best use them to achieve our goal. In addition, we had to be “diplomatic” and persuasive with our corporate partners in order to acquire the resources to implement the solution.

002As we began the process of strategizing a solution, Lowe’s, like many other companies, was implementing a company-wide Intranet. We determined that a solution that took advantage of this powerful, new communication system would be our best, most cost effective approach for numerous reasons.

Because the Intranet securely connects the computers in our stores with those at headquarters and field offices, we didn’t have to develop…and pay for…a unique communications infrastructure. Because the Intranet uses web technology, which makes use of browsers found on every computer, we could minimize the need for developing a costly software application. Instead, we could focus our resources on just developing the tools necessary for capturing and managing the data we needed.

The Benefits of Intranets

Intranets today are being used at more and more companies for everything from on-line policy and procedure manuals to benefits management to interactive employee communications. Web-based technology, whether implemented over an internal Intranet or via the world-wide Internet, is particularly useful for gathering information from many distant sources, tabulating it, and providing real time summary reports for users in many locations.

We believe the applications for this technology in loss prevention are many, varied, and quite appealing. Consequently, we have been very aggressive in creating web tools that capitalize on the Intranet infrastructure we have available.

In May 2000, we deployed the LP Walkthru System, a web application that has greatly improved our efficiency and our field productivity. It has placed an enormous amount of information at our fingertips, and enabled us to remotely manage chain-wide compliance to our shrink-reduction standards.

Our LP Walkthru System is a web application that resides securely behind the firewall on Lowe’s Intranet. All our field LP personnel, in particular our 60-plus area loss prevention managers (ALPMs), enter the results of store walkthroughs from any laptop or desktop on the Lowe’s Intranet.


First Steps First

The first and, perhaps, the hardest step to developing this system was to transfer the existing hard copy walkthrough checklist to a user-friendly on-line format.  This step required us to thoroughly evaluate, enhance, and revise our current standardized checklist of items that were reviewed during every store visit. In order to ensure company-wide standardization, we once again established the key operational focuses along with our top five critical objectives as a loss prevention and safety department.

Prior to the implementation of our web-based LP Walkthru System, we used this checklist in paper form for over a year. During this period, this 30-page checklist was faxed to headquarters and the results entered into a spreadsheet. As you might imagine, this process required laborious data entry. Yet, it was a vast improvement over the napkin method and finally gave us a single database we could work from and a glimpse of the results we were working toward.

At this same time, we were having great success with our Intranet-delivered employee awareness and communication system we call “War on Shrink!” We asked our vendor-partner in that endeavor, CyberQuest Systems of Atlanta, Georgia, to assist in a similar enhancement of our paper walkthrough checklist. The LP Walkthru System is the result of this collaboration.

This system is perfectly compatible with our infrastructure and intuitive for the users. It gives us the ability to target deficiencies that we know exist. It gives store personnel clear, consistent direction, and identifies training and retraining issues. Most importantly, it converts the vast amount of data that is collected during these store visits into concise, usable performance-improvement information.

Following are a few of the summary reports that are generated by the system, and that can be accessed at anytime by management:

  • Top performing stores in the company,in each region, in each district
  • Top 10 most frequently failed items inthe company, region, district
  • All stores that failed any specific itemon their last walkthrough
  • Look-up all reports for a specific store
  • Look-up all reports for a specific ALPM

Improving Our Business

The LP Walkthru System has become a fundamental part of our LP program and is improving loss prevention’s ability to support Lowe’s corporate objectives. Following are some of the benefits we are realizing from this system.

  • By making the walk through process more efficient for the users, we have been able to require more walkthroughs be performed by our people. This means we have far more documented information about the readiness of our stores than ever before.
  • Being able to look at the big picture of store compliance has enabled us to structure training efforts more efficiently. Training can be targeted to issues that we find are widely misunderstood.
  • We have been able to standardize the store evaluations by our field LP managers so that the information we receive is more objective. Consequently, as a department we are able to speak with one consistent voice throughout the organization.
  • The information we gather via this system is made available to other store support groups such as internal audit and operations. Our information gives them a “heads up” on their next visit. So, even though ALPMs, district managers, and auditors don’t cross paths on a regular basis, this sharing of information has created a teamwork that ensures things get fixed.

The benefits are also seen at the director level as I attempt to manage “up” with the corporate management team. The more precise and immediate my information, the better I can advocate for loss prevention.

A great example occurred recently when we were surprised by poor inventory results at a store in Nevada. It goes without saying that senior management does not like to be surprised any more than I do. Such surprises usually spawn expletive-laced reactions like “Where the blank is LP, and what the blank were they doing while this was happening?” The question I have is “Was my ALPM scoring this store as satisfactory during his/her visits?” If so, I have real concerns regarding their inability to identify a store’s basic operational compliance levels.

In this case, I was able to show exactly how often my ALPM visited this particular store and that the store had, in fact, consistently scored poorly in the key areas of receiving, deliveries, and front-end controls. I was also able to show that we had targeted this store for intensified training and observation, and that we were communicating with the other departments involved. In short, we were not surprised…we were all over it.

Of course, the flipside to this example are the instances where an ALPM was, infact, surprised by a store’s unacceptable inventory results based on satisfactorily or in compliance evaluation on numerous store visits during the inventory period. Another failure would be where a high profile store (one with ahigh shrink history) did not receive an adequate number of walkthroughs bythe ALPM. Now, this is measurable using one of the many tools of this system that provides the dates, notes, and signatures of management present during store review.

Being able to have information like this at our fingertips to answer senior management questions and concerns enhances our credibility with our corporate partners. It also allows us to be proactive in solving whatever problem exists.

Features of the System

Following are some of the note worthy features of the Lowe’s LP Walkthru System:

  • In order to ensure that all issues are corrected by the stores, walkthrough results are immediately available to store management and staff through the LP awareness “War on Shrink!” kiosk.
  • No software needs to be installed. Users need only a standard web browser.
  • ALPMs can select a short version of the checklists if time doesn’t permit completion of the full section.
  • Notes on each item are entered via a pop-up device that saves space on the page.
  • Any item failed on the store’s previous walkthrough is highlighted on the new report.
  • The system requires sign-off of each section by the store managers involved.
  • The walkthrough report can be saved for completion at a later time.
  • Upon submission, the entire report can be emailed to any appropriate field management, such as district managers, regional vice presidents, or corporate executives.
  • An administration module makes possible the management of users, user access levels, and walkthrough checklist content.
  • Tech support and administration are handled by our vendor via a secure Internet connection (VPN) to the system server. This means we don’t have to bother our already over-burdened internal IT staff for changes, fixes, upgrades, and ad hoc reports.


Moving Forward

We anticipate a great performance improvement opportunity by integrating the LP Walkthru System into other LP programs so this valuable information can be shared and addressed at all levels. For example, by integrating this system with our “War on Shrink!” employee communication system, we will be able to inform employees of problems or issues so they can help correct them. Store-level managers can now be provided the list of their store’s failed items for response with an on-line action plan. Safety teams can focus on correcting specific safety issues discovered during a recent visit to their store.

We are also exploring the capability of adapting the system to operate on a handheld device that can connect to the system server wirelessly via each store’s wireless local area network. This will mean that walkthroughs can be documented in real-time while the ALPM is on the floor. Once fully tested and deployed, this enhancement will further increase the efficiency of the walkthrough process, enabling more walkthroughs to be completed and allowing shrink and safety issues to be addressed more quickly.

Once we decided to aggressively explore the possibilities of web technology and the potential impact on our LP operations, we discovered that we had far more IT capabilities than we had initially thought. The LP Walkthru System is just one example of many web based initiatives that promise increased productivity and improved compliance to key loss prevention and safety issues in our stores.

How to Talk Tech When Seeking IT Support

One can easily become overwhelmed and intimidated by the language and terms used by the technically gifted gate keepers of information services organizations. For anyone interested in approaching your IT resources to explore implementing a similar system, the most valuable advice I would share with you is be prepared. Take the time to prepare a word-for-word script that explains what you want, what resources will be required, and what support and involvement will be required of IT.

In addition, following is some technical information that relates to this type of application, as well as the infrastructure required to deploy it. Knowing some of the jargon will help you as you interact with your IT department. You don’t necessarily have to understand all the technical wizardry, I certainly don’t. The technical details I leave for my vendor partner or my internal IT folks, which is where the information below comes from.

  • This is a web application that resides on your corporate Intranet behind your firewall. This ensures that only those authorized within your company can access the application.
  • Since there are no graphics or multimedia components, this is a relatively low-bandwidth application so there is minimal, if any, risk of business interference.
  • The application is developed with MS ASP (Active Server Pages) with some Java Script for client-side validation. HTML with cascading style sheets is used for interface presentation.
  • The total size of the web page files is approximately 3-4 megabytes.
  • We use…and the developers prefer…a Windows Server platform. Our web server software is Microsoft IIS 4. The operating system we use currently is Windows NT4. Our database software is MS SQL 7.
  • Today’s database software can handle thousands of concurrent users, which should be plenty with a management-level application such as this.
  • Access is controlled by ASP (Active ServerPages) SQL Server authentication, and the application can be integrated with Windows NT directory services.
  • The server where the application resides should have 256 MB of RAM. The webserver and the database should be allocated 10 GB each. It isn’t necessary to install a new server. Existing servers may be sufficient. Back up of data can be handled within your normal IT procedures.
  • The minimum requirements for the user computers are 166 MHZ processor, 32 MB of RAM, and should run Internet Explorer 4 as your browser.

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