Inventory shrinkage and security measures

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Inventory shrinkage and security measures

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Inventory shrinkage and security measures

  1. 1. INVENTORY SHRINKAGE <br />AND<br />SECURITY MEASURES<br />
  2. 2. OBJECTIVES<br /><ul><li>What is Inventory Shrinkage?
  3. 3. Reasons for Inventory Shrinkage
  4. 4. Loss Prevention Action Plan
  5. 5. Internal Theft Prevention</li></li></ul><li>WHAT IS INVENTORY SHRINKAGE?<br /><ul><li>Inventory shrinkage is the term used to describe the loss of inventory.
  6. 6. For Example</li></ul> If the inventory records of a retailer report that 3,261 units of Product X are on hand, but a physical count indicates that there are only 3,248 units on hand, there is an inventory shrinkage of 13 units. <br />
  7. 7. REASONS FOR INVENTORY SHRINKAGE<br /><ul><li>Theft by Employees (Shoplifting)
  8. 8. Inventory Counting Errors
  9. 9. Administrative Errors
  10. 10. Vendor Fraud
  11. 11. Loss and Damage
  12. 12. Perish ability
  13. 13. Obsolescence</li></li></ul><li>LOSS PREVENTION ACTION PLAN<br />8: Follow Up<br />(Re-visit)<br />1: Recognize<br />Stock Loss Shrink<br />Sales and Profit<br />(reports & detail)<br />2: Develop<br />a Strategic Plan<br />(where is it<br />occurring?)<br />7: Evaluate<br />Implementation<br />3: Map Key Processes<br />& Measure Problem<br />(flowcharts & POS<br />data mgmt)<br />6: Implement<br />Solutions<br />5: Develop Solutions<br />& Prioritize Actions<br />(work with mgmt)<br />4: Analyze Risk,<br />Identify Causes<br />(drill down into areas)<br />
  14. 14. INTERNAL THEFT PREVENTION<br /><ul><li>Why would my staff steal from me!
  15. 15. The retail Industry attracts unskilled workers, often at minimum wage
  16. 16. Think of it as the Carrot and Stick Approach
  17. 17. The carrot includes things like fair compensation, a good working environment, employer sponsored activities that improve morale, good communication and concern for success of a company
  18. 18. The only way is to reach some employees is through a stick of an effective security program and straight forward policy of prosecuting any employee caught stealing </li></li></ul><li>CARROT<br /><ul><li>Reward good people by paying commissions
  19. 19. People like discount, set an Employee Pricing level for some or all of your Inventory
  20. 20. You can even expand on this by allowing staff to sell a certain amount of inventory at Employee discount to friends and family
  21. 21. Move old stock and improve staff morale
  22. 22. Profit sharing is the quickest way to make all staff to feel they have a vested interest in making the company profitable
  23. 23. Good communication goes a long way to make staff feel they're part of the company</li></li></ul><li>STICK<br /><ul><li>Run frequent Administrator Reports – Daily or once a Week
  24. 24. Prevent unauthorized mark downs by setting security levels to reflect what the individuals need to do
  25. 25. Refunds are often an area of vulnerability that is open to employee abuse
  26. 26. Receiving and shipping are also areas prone to potential mishandling </li></li></ul><li>THANK YOU<br />Contact Author<br />Website : http://mcin.webs.com/<br />Email : smb.mazin@gmail.com<br />

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