Shrink Management

1. Physical Asset Loss
2. Store Level Procedural Loss
3. Administrative Loss
4. Price Integrity

Case Study
A multi-banner, $10B+ international supermarket retailer
Project Name
Shrink Management and Process Improvement
Client business challenge being addressed
This client continued to experience increases in shrinkage despite several extensive internal reduction efforts. As a result, BCI was asked to assess the current state shrink-management approach and identify any opportunities to improve results.
BCI solution and approach
BCI began by conducting a high-level assessment to identify and quantify the root causes of shrink by reviewing all functional areas of the business where loss occurs, including merchandising, marketing, supply chain, technology, finance, inventory control, and store operations. Utilizing a comprehensive review methodology, our team collected and analyzed relevant data and reports, assessed current state processes, and considered appropriate benchmark results for comparison purposes.Through the assessment review process, BCI was able to identify and quantify the primary causes of shrink and recommend specific initiatives to address the gaps identified with both people and processes. BCI subsequently conducted a high-level, cost-benefit analysis to define a roadmap that detailed specific actions the client could take to reduce shrink in both the short and mid terms.
Engagement benefits & value to client
• Developed new processes and identified individual accountabilities for merchandising to improve product lifecycle management, pricing program and data/price integrity• Developed and implemented a store profiling capability to predict high shrink store locations prior to a full physical inventory based on key metrics. This enabled the client’s loss prevention, internal audit and store operations departments to focus their time and effort more effectively

• Implemented a production planning program in the perishable departments that reduced shrink by 15% to 27%• The Retail Consulting Services process improvement recommendations were implemented and over the next year resulted in shrink improvements from 1.97% to 1.13%, equating to a $10-million reduction in one division.

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