5 Tips for Reducing Shrink/Inventory Losses
Loss prevention is a critical function within many business. Shrink due to theft, loss, or error can significantly impact an organization’s bottom line if not kept in check. While shrink due to theft from outsiders is an issue, shrink that occurs from the supply chain and from normal operations can be a significantly larger cost. With that in mind, here are five tips to help reduce shrink within your business:
1) Have all orders reviewed upon receipt. Compare invoice quantities with the actual number received and report any discrepancies as soon as possible. Be sure to follow up on any issues to ensure that the correct amount is sent or a refund is issued for any missing order quantities.
2) Keep all shipping boxes or have your suppliers break down any shipping materials prior to leaving your site. If your vendors take their shipping boxes or crates when they leave, there is the possibility that some inventory may have been missed or left unpacked. Ask your vendor to break down the boxes (if you do not keep them) and check all crates before sending them back.
3) Don’t sign anything until you are sure of proper receipt. Many vendors will require you to sign a receipt prior to removing anything from their trucks. If you have a strong relationship with your vendor, this may not be an issue, however if your vendor’s reliability is dubious, or if your relationship is fairly new, you may find yourself surprised in the event that something has not been delivered as initially requested. If you do not know your vendor’s policy on returns post-receipt, do not sign anything until you have reviewed the inventory that has been received and come to an agreement on any outstanding issues.
4) Track assets using real-time GPS tracking devices. Many organizations suffer losses of inventory traveling en route between locations via theft, loss, or incorrect trip routing. Using a GPS tracking device allows a Loss Prevention Manager to respond to these issues in real-time and to receive instant notification of an inventory exception.
For instance, if a truck is stopped and inventory is removed from the back, the Loss Prevention Manager would receive a text message indicating that a crate has been removed from the truck, or that the truck has diverged from its planned route. The manager would then have a real-time view of the asset in motion and would be empowered to provide the authorities with the real-time location of the missing asset.
5) Learn from best practices. Successful businesses review their product inventories frequently to find any discrepancies between actual inventory and the amount of stock that “should” be remaining. Any variance in actual and expected inventory may indicate a theft or leakage problem. By monitoring stock on a more frequent basis, Loss Prevention Managers can react to problems that arise before the costs mount too significantly.