loss prevention paradoxes loss prevention
TRANSCRIPT
Loss Prevention Paradoxes John Fonteijn Head of Ahold Group Asset Protection and Co-chair of the ECR Europe shrinkage project group.
Loss Prevention paradoxes
ECR Russia shrinkage conference November 24, 2011
Introduction
John Fonteijn (1960)
â˘âŻWith Ahold since 1985
â˘âŻHead of Ahold Group Asset Protection
â˘âŻCo-chair of ECR Europe shrink project
AHOLD â˘âŻWe are an international retailing
group, with powerful consumer brands in Europe and the United States.
2,970 stores
213,000 employees
Net sales âŹ29.5billion 2
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Introduction
ECR Europe shrink initiative
Purpose â˘âŻRaise awareness of the problem
of shrinkage â˘âŻCo-ordinate and sponsor cutting
edge research â˘âŻ Encourage companies to address
the problem â˘âŻ Promote a more systematic and
systemic approach to dealing with the problem
History â˘âŻResearch Papers
â˘âŻ 2 Blue books
â˘âŻ 8 White papers
â˘âŻ 2 Pan European surveys
â˘âŻ 11 ECR annual conference presentations
â˘âŻOver 20 seminars across the globe
â˘âŻOver 50 group meetings â˘âŻContinuing and growing industry
representation
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The ECR Europe Shrinkage Project Team
intended sales income that was not and cannot be realised
Creating new thinking!
Root cause analysis Failure, Mode and Effect Analysis
Process mapping 5 Whys
Detailed data analysis
Traditional Approach
The ECR shrinkage roadmap â˘âŻ Estimated to have saved in excess of âŹ600 million for companies that have
used the ECR Shrinkage Groupâs Road Map â˘âŻ âIn the hands of consultants this would be worth millionsâ . Sir Terry Leahy,
former CEO, Tesco
Focus Commitment Energy Resources New Leadership
Other Priorities Complacency
Economic Pressures Resources Cut Lack of Focus
Personnel Change
Tipping Point
How do we succeed and fail
Shrink management strategy â˘âŻ Management commitment â˘âŻ Interdisciplinary approach â˘âŻ Clear targets and rewards â˘âŻ Technology improvements â˘âŻ Single Definition of Shrink â˘âŻ Quick Wins â˘âŻ Training â˘âŻ Best Practices â˘âŻ Awareness and
Communication â˘âŻ Global Collaboration
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Life can be simple according to âBeckâ
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Strategic
Life can be difficult according to store associates!
Internal pressure â˘âŻSales â˘âŻMargins â˘âŻLogistics â˘âŻWorkforce planning â˘âŻCustomer demands â˘âŻThe ivory tower â˘âŻCash management â˘âŻ Inventory losses
External disturbances â˘âŻHomeless people â˘âŻDrugs and alcohol addicts â˘âŻShoplifters â˘âŻAgressive and violent â˘âŻ Internal theft and fraud â˘âŻ24 opening hours â˘âŻHard and organized criminals
â˘âŻEnvironmental issues
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âNever arrived from the DC/Supplierâ
âNo support from the LP Deptâ
âCompany cares more about salesâ
âItâs a bad area, items are not taggedâ
âMy predecessor left me with a messâ
âI donât believe the shrink data
Create store associate accountability
Our associates
â˘âŻ2 pair of eyes, 2 pair of hands and a briljant mind!
â˘âŻFit for the job! â˘âŻCustomer focus â˘âŻ Integrity â˘âŻAdaptive to change â˘âŻCompany ambassadors
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Create store associate accountability
â˘âŻ Make them accept ownership â˘âŻ Listen to them â˘âŻ Provide the tools and the data â˘âŻ Give them training and stability â˘âŻ Incentivise
Make them accept ownership
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â˘âŻMake them understand to the urge to manage shrink
â˘âŻMake them understand their âcircle of influence
â˘âŻSet SMART personal, department and store objectives
â˘âŻProvide tailor made on the job training
â˘âŻ Involve them in measuring and reporting performance
Listen to them â˘âŻ Listen â˘âŻOur people know our problems
and often the solutions â˘âŻ Take ideas and concerns
serious â˘âŻ Translate good ideas in practice â˘âŻResponse and act in a timely
fashion
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Provide the tools and the data
â˘âŻ Provide store level data correlating to their circle of influence
â˘âŻ Show them how they can see the result of their âbehaviorâ
â˘âŻ Ensure item level shrink data â˘âŻMake data real time available â˘âŻMake them understand the data and
the measuring system â˘âŻWork with store and department
dash boards
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Give them training and stability
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Continuous training
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Continuous training
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Incentivise
â˘âŻMake shrink numbers a KPI â˘âŻ Include performance in monthly
department and individual meetings
â˘âŻ Include shrink performance in annual appraisel
â˘âŻReward good practice! â˘âŻ Arrange store level, regional or
group wide competition. â˘âŻCommunicate good practice
and shrink champions!
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The paradox â˘âŻ Losses are seen as costs
â˘âŻ To decrease costs retailers tend to
decrease the cost of workforce or use it
more efficient
â˘âŻ Mostly this result in minimizing controls and
strict workforce planning
â˘âŻ Contrary to this, Loss Prevention is asking
for strict management control to ensure
proper execution of plans and procedures.
Loss prevention behavior by employees and
management is required especially at those
momentsâ sales and workload is slow.
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The answer to the paradox
â˘âŻ Make the people key in your strategy and
support them with the technology they are
susceptible to.
â˘âŻ Integrate Loss prevention tasks within
workforce planning.
â˘âŻ Apply job based Loss Prevention and
Security training for all staff.
â˘âŻ Ensure sufficient and adequate
management controls.
â˘âŻ Have performance measurement and
reporting in place.
â˘âŻ Take a business driven approach.
â˘âŻ Cherish your most critical success factor for
Loss Prevention and Security; your
associates.
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Top 3 doâs and donâts
â˘âŻDONâT accept excuses for bad shrink figures
â˘âŻDO create ownership â˘âŻDONâT fail to listen and to act â˘âŻDO emphasize good practice â˘âŻDONâT see shrink management as a project
â˘âŻDO embed shrink management in business processes
! be aware of the paradox.
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Results of associate accountability
store1 store2 store3 store4 2009 3,99 5,01 4,23 2,64 2010 3,21 3,13 3,43 2,02 2011 2,74 2,02 2,21 1,43
0
1
2
3
4
5
6 Sh
rink%
of s
ales
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Results of NO associate accountability
store5 store6 store7 store8 2009 3,99 5,01 4,23 2,64 2010 4,01 4,99 4,22 2,6 2011 4,55 4,89 4,1 2,89
0
1
2
3
4
5
6 Sh
rink%
of s
ales
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Thank you for your attention.
Questions?