© 2010 larry m - fmi · © 2010 larry m iller, ... manager, fe manager, store manager, district...

3/4/2011

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© 2010 Larry Miller, LAM Consulting, Inc.

RERE--FOCUS & REFOCUS & RE--LOAD FORLOAD FORRERE--FOCUS & REFOCUS & RE--LOAD FORLOAD FOR

Presented by:

Larry MillerThe Retail Control Group

www.RetailControl.com

FMI presents…

© 2010 Larry Miller, LAM Consulting, Inc.© 2010 Larry Miller, LAM Consulting, Inc.

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The Unfortunate Truth

We have spent the last 20 years trying to:

Catch Vendor Theft at our Back DoorsCatch Cashier Theft at our Front DoorsCatch Shoplifters with our DVR’s, EAS and …Track, Analyze and Fractionalize to the smallest detail every pattern and blip…

It’s Time To:Re-FOCUS on the Real “Profit Drivers”


Corporate Retail ExperienceStarted as a bagger, then night crew, Produce Manager, FE manager, Store Manager, District

Manager of 16 stores, Area Director of 52 stores, VP of Operations 160 stores.

Independent Supermarket Owner/Operator

Software Entrepreneur & AuthorCreator of ShrinkTrax and SmartStore

Ernst and Young 2000 EOY Award Winner

3 Books, 116 Articles and 14 White papers

Today:I Teach Retailers to GROW PROFIT

LARRY MILLER

CONTACT: 602-448-8500

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Installed Best Practices


Shrink Vs. Profit?

Half Empty?

Half Full?

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What is Shrink??

The difference between the retail value of product received and the amount received for that product at the time of it’s sale.


Where’s the Shrink?

Shoplifting 28%

Cashier-Caused 24%

General Employee

25%

Receiving 7%

Pricing 4%

Acct’g 4%

Damage8%

2.27% Average

Just 38% of available shrink for recovery.

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Creating PROFIT!

7.4565% of LP Pros rate their effectiveness in Combating Shoplifting, Employee and Vendor Theft at 7.45.


BEST LP Thinking

1. 62% of your shrink is from Operations. 2. 38% of shrink comes from Shoplifting,

Receiving, Employee and Cashier Caused.3. Focus on Inv Controls, Turns & “Conversion”4. Measure Known Loss.5. Learn, Teach, Collaborate and FOCUS!

SHRINK IS LOST PROFIT.So… Let’s talk “PROFIT”!

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Where's The Shrink?

Theft 36%Operational

59%

© 2011 National Supermarket Research Group - Preliminary


Operational

Employee Caused 9%

Damage 4%

Production Planning 10%

Rotation 7%

Product Handling

9%

Known Loss 14%


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Non-Operational

Shoplifting 13%

Vendor3% General

Employee 9%

Cashier Caused 11%



Facts & Stats

Best-In-Class GOALS:

• Total store shrink = 1.20% of sales. • Perishable shrink = 18% less than industry av.• Vendor Theft = 16% less than industry av.• Cashier Theft = 32% less than industry av.• Top 20% of Store Managers have 26% less store

shrink than peers.• Top Companies have written Operating STANDARDS

and active LP and Store Manager collaboration.• Use Total Store Manager Best Practices.

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What’s Your Inside BRAND?

Narrow or Broad?Isolated or Collaborative?Total Store or Just Parts?Theft – Catch – Secure or PROFIT EMPOWERING?


The BIG Opportunity

• Only 14% of LPM’s are actively involved in Perishable Shrink Prevention.

• Only 18% are actively involved in Grocery Shrink Prevention Best Practices.

• Just 26% are actively involved in store-wide Known Loss Control Best Practices.

COMBINED: We are missing optimal control of 58% of Store‐wide Shrink Loss.

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Shrink by Department

“Best-in-Class” practices can improve

profit by 18%

6.27%

5.53% 4.76%

1.29%

5.01%


Creating PROFIT!

Reducing SHRINK 18% produces the same bottom

line PROFIT as would an 22% Increase in Sales.

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Now Imagine:

1818%%LOWERLOWERSHRINKSHRINK


Now Is The Time!!!

• Engage the Boss in a BOLD, NEW Way. • Expand your Reach and Impact.• Raise the Profile of Loss Prevention.• Getting more VISIBLE.• Create Your Loss Prevention Profit Center.

It’s a Matter of: VALUEChange your Value Proposition and You Will Get BETTER FOLLOW‐THRU, EXECUTION and RESULTS.

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The

Relentless Pursuit of

Better!© 2010 Larry Miller, LAM Consulting, Inc.

Your Challenge…Your Challenge…


“You Can’t Catch Your Wayto Lower Shrink”

- Larry Miller

Lesson #1

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Now:

It’s Time To Think

BIGGER


“The ideas presented in this session may cause a CHANGE in your thinking and lead to radical

profit improvement.”

A Warning To Our Younger Viewers

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3 BIG IDEAS:

1. Focus on PROFIT. How to be EXPERT PROFIT MAKERS and PROFIT COACHES!

2. 5 Key Programs. This is an evolutionthat unfolds over a 9 month period.

3. A Total FOCUS ON PROFIT.Driven by YOU the Leader..


THE BIG IDEA!!!

YOU WANT PROFIT:1. Start with a serious look at your current

practices to see what is / isn’t working.2. Begin a “Process Of Change” – an

EVOLUTION – to permanently impact your PROFIT FOCUS!

3. EDUCATE! TRAIN! COACH TO SUCCESS! 4. Build-in Sustainability!

Think Like a Total Store Manager

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FOCUS ON PROFIT IMPROVEMENTFOCUS ON PROFIT IMPROVEMENT

PRODUCE

MEATSTORE

Increase Profits

Reduce Shrink

20%

0%

-20%

Increased PROFITS

Reduced SHRINK in Less Than 120 Days

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What Prevents LP?

Because Manager’s Don’t Know How To Fix It.


Let’s Talk “Profit Realization”

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““Acres of Acres of DiamondsDiamonds””


“Raise Your Expectations”

Excellent PROFIT MAKING and Shrink Control Only Comes With

BIGGER Expectations. - Larry Miller

Lesson #2

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YOUR JOB #1 is:

PROFITRealization


PROFIT and…

It’s an AttitudeAttitude and an ExpectationExpectation…

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Your #1 Offense

“The Total Store Manager”1. New Knowledge & Focus (Sales, Sanitation, Shrink)

2. Consistent Visibility & Presence (StoreWalk)

3. New Attitude of Support (not catch)

4. The “Coach”: Vision, Teamwork, Direction.5. New, Clear Standards & Expectations6. New Quantifiable Goals

He is “A Man With A Plan”!

New for 2011


New Expectations

1. Executives MUST Open Their Minds to More Effective Standards, Systems & Practices.

2. Store Manager’s MUST Learn and Use The TOP 5 Best Practices That Cause Profit.

3. Everything Is Measureable.

4. Profit Realization Comes from Store Operations-centric Loss Prevention

5. You Can’t Catch Your Way to Lower Shrink!

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Re-FOCUS & Re-LOAD

For 18% New “Profit Realization”

Follow These 5 BOLD, FRESH PROGRAMS


Total Store Manager 5 Best Practices

1. StoreWalk – Twice each day, “on-purpose”!

2. Smart Inventory Control – The Rule of 3 and programmed inventory turns for Cash Flow/ Freshness, Damage Control and Shrink Control.

3. Backroom Organization & Sanitation –Wall-to-wall and “deep into corners”.

4. Known Loss Control – Reason “why” management awareness and adjustment.

5. Cashier Performance Management –for CSE and Shrink Control.

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“12 Standard Disciplines” How to “Coach” Their Teams

to Consistently Success.


The Profit System

““12 12 Profit RealizationProfit Realization” Best Practices & Standards

1. A disciplined StoreWalk© Standard and Practice.2. Backroom security, inventory control and organization.3. Inventory Turnover Goals by Department. (Perpetual Inventory)4. Cashier KPI’s and Targeted Goals.5. Empty Perishable Coolers on Receipt of Delivery.6. Cutting Lists and Production Planning.7. 9am Perishable Readiness / 6pm MIC Perishable Walk8. Loss Prevention Night Visitations9. Store Manager Loss Prevention Checklists10. Sanitation Standards & Practices11. HR/LP Training, Orientations, “The Coaching Culture” 12. Customer Service


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Train or Re-Train…

1. Managers need to understand their Business “Profit Drivers”.

2. Managers to “see” and “feel” their “Profit Drivers”.

3. Managers must know their vital Shrink Control and Profit Making #’s.

4. Managers must learn to “Coach For Profit”.5. Train Managers & Supervisors must learn to

Lead their Teams to PROFIT.

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7 Loss Prevention BP’s

1. Teach employees to prevent Shoplifting with excellent customer service.

2. Continue current physical security, analytics, Policies and Controls. Just differently.

3. Get engaged in Operational Shrink Control.4. Focus on Inv Control, Turns & Conversion.5. Measure Known Loss and Investigate WHY?6. Promote “Think Shrink” Collaboration and

PROFIT HUDDLES.7. Conduct Single Topic Briefings at Manager Mttgs.


Walk Your Store “

Twice a Day!

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The Store Manager's DAILY StoreWalkConducted By The Store MIC Each Day at 8:00a and 4:00p

EveryDay Thursday Notes & Comments

ALL AREAS:All Adv Items Available for Sale x x

Actual-to-Planned Labor / Adjust? x x

Sales Readiness x

Discuss Today's & Tomorrow's Plan x

PERISHABLES (30 minutes)

Sales Floor Rack Check

Freshness "Touch" Check - All Racks x

Approve Space Allocation x x

Advertised Item Check x

Proper Signs In Place x

Displays Level & Presented x

"Smell Check" All Areas x

Displays Set for 12-hour Sell Thru x x

GROCERY BACKROOMSExcess Backstock Controlled (7%) x

All Exit Dooor Seals Controlled x

Wall-To-Wall Swept and Picked-up x

Backstop of Current Adv Items? x

Test All Exit Alarms x

Sight Check All Service Rooms x

Sell or Xfer 20 Pieces of Old Stock

StoreWalk™

Managers must be taught to “see” beyond the tactical and be “purposeful”


Merchandising:Complete audit of (order guide) purchases to sales. This determines if what we are ordering is being

produced in proper amounts so as to display all required products for proper GM% mix andwhat is actually selling. Additionally: Quantities being ordered and stored are in‐line with anticipated sales. Verify the following:

Questions: Comments: Value: Score:

• Proper items are being ordered for smart merchandising and productivity and turnover.

• Required varieties of pre‐packaged items are being ordered and displayed for sales.

• Required varieties of produce are being ordered and displayed for sales.

Inventory:Review of last 2 monthly physical inventory reports. This is to look for evidence of inventory manipulation or mal‐practice. Verify the following:

Questions: Comments: Value: Score:

• Look for variances in quantities between months and correlation between what was ordered, scaled/produced, and sold.

• Order guide review: Is it apparent that full variety ordering is occurring so as to assure maximum productivity, product variety and mix, etc.

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So; What to do…

For the next 8 Weeks?

1. Commit to a formal, consistent SW every day, twice a day. – SEE-THINK-TAKE ACTION…

2. Talk Shrink Reduction for PROFIT Realization at every WEEKLY Store Manager meeting.

3. Talk Shrink Control Awareness and Prevention to EVERY new hire.

4. FOCUS ON PROFIT!



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Having great produce isn’t enough

Having a great meat department isn’t enough

Having great perishables isn’t enough

Having great customer service isn’t enough

You must have cost and loss controlsthat produce strong margins - with broad and deep customer satisfaction.

Lesson #3


Perishable Shrink

Meat Seafood Deli Produce Dairy Floral Bakery

Overall Shrink 4.86% 4.92% 5.98% 5.02% .82% 6.24% 6.05%

Employee Theft (non‐cashier) 12% 9% 15% 11% 11% 19% 24%

Cashier Theft and Errors 20% 12% 15% 21% 16% 13% 15%

Receiving / Damaged 3% 9% 6% 6% 10% 9% 5%

Pricing / Scan File Errors 7% 11% 11% 8% 7% 7% 6%

Shoplifting 23% 20% 22% 12% 18% 14% 11%

Over‐ordering 12% 15% 9% 15% 12% 16% 7%

Improper Handling / SpaceAllocation / OverproductionThrowaways

23% 24% 22% 27% 26% 22% 32%

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8 Best Practices To DRIVE Perishable PROFIT



PROFIT DRIVER #1

1. Everything Starts With A Smart Order.

17% of Perishable Shrink can be traced to faulty Ordering. Smart orders are written to meet anticipated sales and display requirements.

Efficient Turnover = LOWERS SHRINK!

Reduce shrink up to 17%

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Order to Produce This


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2. Practice “The Rule of 3”.

Order perishables for 3 days anticipated sales and sell at full value what you receive within 3 days.

Improve Freshness & Quality and Reduce shrink by 8%

PROFIT DRIVER #2

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TSM Controlled Cooler


TSM Controlled Coolers

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Following These Best Practices Produces

1. Lower Shrink.2. MORE PROFIT!3. Fresher Product for Sale4. Higher Customer Satisfaction5. Improved Productivity & Morale6. Cleaner Store and Work Areas7. Customer Service Excellence


“Shrink Control and Customer Satisfaction Begins HERE”

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TSM Controlled Backroom



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PROFIT DRIVER #3

3. Turn-over Storage Inventory.

A tell-tail sign of a department under control is an organized, code dated storage cooler.

Every Manager MUST understand the importance of Inventory Turn-over.

Reduce shrink by 7%

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Excellent Backroom & Cooler Control Will Reduce Shrink By 12%


TOP PROFIT THINK

1. Receive it fresh.

2. Keep it Fresh. Refrigerate.3. Produce only to meet demand.4. Minimize compression under weight

5. Sell it! Sell it soon after receipt.

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The Total Store Manager Total Store Manager Effect

PRODUCE

MEATSTORE

Increase Profits

Reduce Shrink

20%

0%

-20%

Increased PROFITS

Reduced SHRINK in Less Than 120 Days


Larry Miller’s

8 Indisputable Laws

8 Indisputable Laws of Loss Prevention

1. The Law of Consistency… managers must focus on the 4 S’s of Supermarket Success to bring higher profits.

2. The Law of Expectation… you must balance between past and future expectations and have a clear LP vision.

3. The Law of Standards… set clear store performance standards to set the stage for your success.

4. The Law of Execution... an ounce of (preemptive) prevention is worth more than a pound of (reactive) cure

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8 Indisputable Laws of Loss Prevention5. The Law of Inspection…effective auditing is the circular,

repeatable process that triggers shrink reduction.

6. The Law of Change…C-level change management and choosing the right strategic partner will help you sustain changes that build profits

7. The Law of Collaboration…and how corporate-wide cooperation will turn failure into success – Evolve or Die !

8. The Law of Accountability…and how everyone MUST be accountable for their role in creating your winning loss control culture -- and it all starts with YOU !

Larry Miller’s

8 Indisputable Laws


TOTAL STORE MANAGER

PROFITABLE SELLING

YOURBRAND

Customer ServiceExcellence

ProfessionalStore Supervisor

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“Profit RealizationProfit Realizationis a team sport…”

- Larry Miller

Lesson #8 – The New Loss Prevention


The RESULTS?

Company 1: (22 Stores)

CASH FLOW $1,050MGROCERY SHRINK 12%PERISHABLE SHRINK 34%

Company 2: (37 Stores)

CASH FLOW $840KGROCERY SHRINK 16%PERISHABLE SHRINK 23%

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See Actual Case Study RESULTS in Your Pass-out Package.

Then; Chose The Training Program That’s Right for YOU!


“If it is to be, it’s up to me”

- Larry Miller

Final Lesson:

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The

Relentless Pursuit of

Better!© 2010 Larry Miller, LAM Consulting, Inc.

COMMIT to…COMMIT to…


REMEMBER…REMEMBER…

If you continue to do what you have always done…You will continue to get what

you always got.

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Learn How To Grow Your PROFIT As A

Total Store Manager®

Company

For GUARANTEED PROFIT…

Contact Larry Miller at 602‐448‐8500


NSRG presents

THE NATIONALSUPERMARKET SHRINKSURVEY FOR 2011.

SIGN-UP NOW!!!

3/4/2011

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“Beyond Shrink Control”“Beyond Shrink Control”

81

FREE Web-based TrainingFREE Web-based Training

GO TO WWW.BEYONDSHRINK.COMSIGN-UP TODAY!!

© 2010 larry m - fmi · © 2010 larry m iller, ... manager, fe manager, store manager, district...

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