Inventory Shrink Reduction

One of the most significant and actionable operating expenses is inventory shrink. SD Retail consultants work with retailers to identify the root causes of shrink, develop action plans to reduce shrink, and measure and monitor progress on shrink management.

We take a holistic view and address potential impacting issues in all areas from home office planning through store execution.

Home Office

• Merchandising and marketing - purchasing, pricing and markdowns.
• Accounting - entries impacting COGS, gross margins and stock ledger.
• Accounts payable - duplicate or over payments, vendor credits and cost/retail relationships. Inventory control - proper setting-up and booking of inventories.
• Human resources - applicant screening, training and performance management.
• Visual - store layout and display.

Distribution

• DC Receiving - receiving accuracy, vendor claims.
• DC Shipping - picking and packing accuracy, store claims.
• Returns - salvage/damage, RTVs.

Store Operations

• Policies and procedures - validity and compliance.
• Production Planning - sales forecasting, portion control/yield.
• Known loss tracking - waste, known theft.
• Back room management - receiving accuracy, backroom organization, DC claims, transfers.
• DSD/Drop Ships - receiving accuracy, vendor claims.
• Paperwork processing/System entry - accuracy, timeliness.
• Price integrity - price signage, markups/markdowns.
• Returns - merchandise handling, system recording.
• Physical inventory - preparation, accuracy, cutoffs.
• Staff scheduling - coverage levels.
• Front end - ringing accuracy, voids, refunds, price overrides.
• Cash controls - till and safe balancing, check acceptance, credit card processing.

Loss Prevention

• Shrink awareness - communication and signage, reward programs, audits, reporting.
• Physical security (stores and DCs) - key control, door locks, alarm systems, cameras.
• Security devices - EAS, security tags.
• Exception reporting - KPIs, Top Ten lists.

Technology

• Pricing downloads - accuracy, timeliness.
• POS polling - completeness and accuracy.
• Management reporting - automated capture and reporting of key information.