shrinkage...shrinkage –sonae mc | processes/work techniquescheck -list (loss prevention) –script...
TRANSCRIPT
SHRINKAGE
ECR Community Shrink & OSA Working Group Meeting
OCTOBER’18
SHRINKAGE – SONAE MC | LOGIC OF CALCULATION
CONCEPT(CALCULATION)
operational losses=
wastage (known reasons + depreciation margin*)
+
shrinkage (unknown reasons)
ACCOUNTING Know and unknown reasons valued at cost price
RATIO as a percentage of reported net sales
freshincluded
*Depreciation Margin= “Loss of value” (margin) resulting from sale by depreciated label (articles with end-of-validity).
SHRINKAGE – SONAE MC | LOGIC OF CALCULATION
(…)
MARGIN(…)
PURCHASE DISCOUNTSCOMMERCIAL REVENUES(…)
• Shrinkage managementis a Sonae responsibility
• Shrinkage occurs at the store & wh and this cost contributes to store & wh results
• shrinkage compensation revenues are part of gross margin and are isolated from shrinkage
EBITDA
COMMERCIAL MARGIN
GROSS MARGIN
SHRINKAGE
(…)
(…)
OPERATIONAL SHRINKAGE
commercialmanagement
WASTAGESHRINKAGE
operationalmanagement
SHRINKAGE – SONAE MC | PARTICIPATIONS
year 2017 - fmcg includes dairy products
By Business:By kind of losses:
FMCG 20%
Fresh 71%Non Food9%
SHRINKAGE – SONAE MC | PARTICIPATIONS
year 2017
By Business Units:
7
SHRINKAGE – SONAE MC | PROCESSES/WORK TECHNIQUESShrinkage reduction is a continuous and systematic process:
• Structure dedicated / Loss Prevention Department
• Loss Prevention’s Pivot (in each store)
• Database with information by item / store / day / type of losses
8
Shrinkage reduction is a continuous and systematic process:
• Commercial and operational support / workshops (evolution results, critical suppliers /stores/items actions plan)
• Suggestion for Assortment Changes (by item/store) and “Store Pack” (by item)
• Training
SHRINKAGE – SONAE MC | PROCESSES/WORK TECHNIQUES
SHRINKAGE – SONAE MC | PROCESSES/WORK TECHNIQUESShrinkage reduction is a continuous and systematic process:
Shrinkage
Merchandise conference of warehouse to stores
Front-Office Exceptions/ Fraud monitoring (RAID FO)
Minimum weights in FO for all variable weight items
Overstocks Daily Monitoring
Flow Of Critical Stocks (End of Validity Approach)
Local/ Source Protection
Inventory PlanCheck -List (Loss Prevention) – script of good practices
ShrinkageWastage
SHRINKAGE – SONAE MC | PROCESSES/WORK TECHNIQUESINVENTORY PLAN (SHRINKAGE REDUCTION - EXAMPLE OF A PROCESS)
MAIN OBJECTIVES
Ensure constant updating of Stocks.
Measuring Operational Shrinkage levels more frequently in order to:
• Promote the implementation of preventive / corrective actions.
• Support the evaluation of the effectiveness of the actions taken.
(…)
SHRINKAGE – SONAE MC | PROCESSES/WORK TECHNIQUESCHECK -LIST (LOSS PREVENTION) – SCRIPT OF GOOD PRACTICES
(SHRINKAGE REDUCTION - EXAMPLE OF A PROCESS)
MAIN OBJECTIVES• Draw 3 times a year the "portrait" of the most volatile areas in the store operational shrinkage, in order to take
preventive / corrective measures.• Conduct benchmarks of good practice• Exploration of results and comparison with levels of Breakage.
Check-List is available to all stores through an online tool that allows you to fill in the query and evaluate the results.
Average
Sales
Rotation
Days
Rotation Kpifor item / Category
Alerts Raid Stocks:
# Alerts daily average
10% of stock store
Stock by
Item / Store
SHRINKAGE – SONAE MC | PROCESSES/WORK TECHNIQUESRAID STOCK - OVERSTOCKS DAILY MONITORING (SHRINKAGE REDUCTION - EXAMPLE OF A PROCESS)
SHRINKAGE – SONAE MC | PROCESSES/WORK TECHNIQUESRAID STOCK - OVERSTOCKS DAILY MONITORING (SHRINKAGE REDUCTION - EXAMPLE OF A PROCESS)
Raid Stocks provides relevant information about item, stocks, sales and merchandising structure.
NEW LABELS
SHRINKAGE – SONAE MC | PROCESSES/WORK TECHNIQUESFLOW OF CRITICAL STOCKS (END OF VALIDITY APPROACH)
(SHRINKAGE REDUCTION - EXAMPLE OF A PROCESS)
DEPRECIATED LABELS with differentiated communication will streamline sales, increase sales, and minimize customer waste.(depreciation pvp reduction)
Use ByFood to be consumed by the deadline mentioned above. After that date, its
consumption entails food risk.
Best BeforeFood that can be consumed after the deadline, but may not have the best quality (texture, hardness, taste, ...).
Motto: "judge for yourself"
SHRINKAGE – SONAE MC | PROCESSES/WORK TECHNIQUESLOCAL/ SOURCE PROTECTION (SHRINKAGE REDUCTION - EXAMPLE OF A PROCESS)
>> ITEMS WITH SOURCE PROTECTION (EXAMPLES): CONDOMS, MAKEUP, CAR LAMPS, BATTERIES,…
LOCAL PROTECTION
SOURCE PROTECTION
SHRINKAGE – SONAE MC | PROCESSES/WORK TECHNIQUESRAID FO – FO EXCEPTIONS/ FRAUD MONITORING (SHRINKAGE REDUCTION - EXAMPLE OF A PROCESS)
SHRINKAGE – SONAE MC | PROCESSES/WORK TECHNIQUESRAID FO – FO EXCEPTIONS/ FRAUD MONITORING (SHRINKAGE REDUCTION - EXAMPLE OF A PROCESS)
SHRINKAGE – SONAE MC | ANNUAL EVOLUTION
Since Sonae MC focused on shrinkage reduction
achieved a cumulative recovery > € 300 million
cumulative recovery> € 300 million
shrinkage %rns
THANK YOU!
LOSS PREVENTION DEPARTMENT