loss prevention & control presented by surajit datta
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Loss Prevention & Control
& its Impact on Management of Inventory Shrinkage
Presented by: Surajit Datta
Manager-Internal Audit - aswaaq LLC
Brand for all UAE Brand
Who We Are What We Do
Fresh Return to
community Convenient Real Estate
Standardized Products & Services
aswaaq Brand Home delivery Monprix
No Tobacco Family Day Thukher Fils for Charity Go Green CSR
HAACP
In the Community for the Community
Benefits
Wafa loyalty 10% cash back Noor wafa credit
card
Arabization
Smart aswaaq
Mobile App
Awards & Recognitions
Food Safety Best Employer Brand Identity Brand Identity DQA award Superbrands Bill payment
Supermarket
Wafa Tablet
Brand Promise
SME Support
ISO 9001-14001-18001
ICD subsidiaries Benefits of Participation in DQA
Opportunity to learn and share good practices;
Contributes to organizational learning and teamwork;
Independent and objective assessment by external assessors serves as
a holistic evaluation of the organization and lead to process
improvement;
Feedback serves as a basis for designing and managing a Performance
Measurement system, Risk Management strategy and initiating
improvements in various areas;
Continuous improvement through RADAR approach.
3
ICD subsidiaries Loss Prevention & Control
4
Inventory shrinkage is a common problem in
retail and aswaaq is no exception.
Inventory shrinkage costs retailers anything
between 1.50 - 4%* or even more of their
total annual sales. And in terms of a
percentage of net profit, they are close to
20%.
By adapting and implementing LPC, risks are
identified, managed and assessed within a
robust Risk Management framework.
PR
EV
EN
TIO
N O
F L
OS
S t
o..
*Source: Retail Theft Barometer
Loss Prevention Framework
5
Monitoring &
Reporting
2
LPC Structure
4
Accountabilities
3
Awareness & Training
1
Strategy & Road map
Loss Prevention & Control Framework
Step-1a: LPC Strategy
Zero budgeting on shrinkage
Defining Accountability
Setting KPIs for informed decisions
Standard Reports, Dashboards, etc. for constant Monitoring
Re-engineering processes & procedures
Linking shrinkage & wastage results with employee
Performance Management System
Increasing frequency of physical inventory for categories
with high incidences of shrinkage.
Step-2: LPC Structure & Resources
Appointment of LPC team
Re-engineering of core business processes
Design of training manual and training modules
Sr. Manager - Finance
LPC Officer
Head of Leasing & Mall Management
Security Monitors
(4)
Process Review
Gap Analysis
Process Re-engineering
Designing
Training
Manual
9
Weekly Newsletters for knowledge
and awareness
LPC awareness and training
programmes
Poster Campaign
Step-3: Awareness & Training
Shrink? Shrink?
Shrink?
Shrink? Shrink?
Step-5: Monitoring & Reporting
Monitoring Reporting
Internal:
Periodical data analysis by LPC
officer;
Internal audits of stores;
Semi-annual stock takes;
External:
Annual Statutory financial
audits;
Annual Government audits
Municipality inspections.
Reports by LPC officer;
Internal auditor’s reports to
Management and Audit
Committee;
Stock take reports;
Particulars 2011 2012 2013
Shrinkage as % of Sales 6.03% 0.81% 0.45%
Wastage as % of Sales 1.12% 0.88% 0.58%
Improvement - Shrinkage 87% 44%
Improvement - Wastage 21% 34%
0.0
5
0.0
7
0.0
6
0.0
3
0.1
5
0.1
5
0.0
9
0.6
0
0.1
0
0.1
5
0.1
1
0.1
1
0.1
5
0.2
8
0.2
0
1.0
9
-52
%
-50
%
-44
%
-67
%
1%
-49
%
-56
%
-45
% Store-1 Store-2 Store-3 Store-4 Store-5 Store-6 Store-7 Total
Shrinage & Wastage-YTDJun'14 Shrinage & Wastage-YTDJun'13 % Change
45
33 31 30
0
10
20
30
40
50
2010 2011 2012 2013
Stock Turnover (Days) - 2010 to 2013
12
Results Achieved
AED in million
13
Cost-Benefit Analysis
LPC Team – LPC Officer,
Security Monitors, etc.
Shrinkage & Wastage
reduction
Improved Margin
Improved Ordering
Reduced Stock Turnover
Reduced Out-of-stock
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