LP Magazine

JAN-FEB 2018

LP magazine publishes articles for loss prevention, asset protection, and retail professionals covering shrinkage, investigations, shoplifting, internal theft, fraud, technology, best practices, and career development.

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■ Invest in state-of-the-art data systems that allow for seamless interaction between each organisation with strong user acceptance. ■ Invest in state-of-the-art professional mid-to-long term forecasting systems for volume planning and utilisation across the supply chain. Finding 2: Category and partner selection needs to be very intentional. Once the need and fit of collaboration has been established and the capability to achieve this has been put in place, organisations should then consider who are the right partners and what are the most appropriate categories for collaboration. Key considerations will be: ■ The overall size of the joint businesses. ■ The legacy and levels of trust from previous collaborations. ■ The relevancte of the category sales volume to each organisation. ■ The significance of the waste reduction opportunity for the category to each organisation. Finding 3: Organisations need to be set up correctly in order to collaborate effectively. Organisations embracing strategic collaboration will most likely succeed when: ■ There is buy-in and prioritisation of the collaboration effort by senior management. ■ There are clear, tangible, and measurable objectives in place. ■ There is clarity on benefit allocation to all parties, both within organisations as well as between third-party organisations. ■ There is capacity for collaboration and the right level of seniority, experience, and tenure in the teams, with a good balance across functions and organisations. ■ There is clarity on roles and responsibilities, with a clear responsible, accountable, consulted, and involved (RACI) model for each major change intervention. ■ There is good chemistry between the teams, ensuring high-quality cross-team exchanges and mutual trust. ■ There are frequent and disciplined joint meetings. ■ There are commonly defined key performance indicators (KPIs) being reported. ■ There is a shared incentive system supporting aligned behaviours and common goals. ■ There is regular and seamless exchange of predefined data sets. The next step for the ECR research working group is to pilot the maturity model. They then plan to publish the findings of the research and launch the self-assessment tool on 30 November 2017 in Prague. Implications and Possible Next Steps for Retail Loss Prevention Professionals Those familiar with the ECR team will be aware that it has been a consistent champion of the benefits of collaboration between retailers and manufacturers on retail loss. The ECR team believes that improved collaboration can deliver some transformational changes that could reduce retail loss: ■ New Supply-Chain Design and Controls. If products arrived in store via a more controlled and secure method, could losses and risks be reduced and sales improved? ■ New Packaging. What if product manufacturers could be inspired to design packaging that shoppers and store managers love and thieves hate? ■ Security Features. Could product manufacturers add and include security features before the product arrives in store to reduce loss and improve sales? In the nearly twenty years since its establishment, the ECR Shrinkage Group has documented some good examples of successful collaboration on shrink. However, the group would also accept that collaboration between retailers and manufacturers has not yet met the lofty aspirations they had in mind when the group was first established. Reflecting on this most recent project on collaboration on food waste and the insights shared in this article, it is clear why progress has been slow—collaboration is most certainly not a walk in the park. On a positive note, the research is now pointing to new ways of thinking about improving it. A suggested action for you and your team to consider would be to use the ideas in this article to initiate a new collaborative project with one of your vendors that produces high shrink products. Step 1: Analyse the collaboration opportunity by category. Analyse and then segment the product categories across stores based on the extent to which you believe that collaboration with a vendor may improve shrink and profitability. Detailed on page 31 is a simple way to consider the relationship between the extent to which a particular category experiences shrinkage and the degree to which opportunities for collaboration are considered to be present. By way of an example, many grocery retailers incur significant losses on joints of lamb. Thus, this product would be in one of the top two quadrants. Considering whether the benefit of collaboration would be high or low requires an understanding of the root causes of the losses on this product and the extent to which the team believe any improvements upstream in the supply chain, such as case sizes, packaging, security tagging, and so High Shrink/Low Potential From Collaboration High Shrink/High Potential From Collaboration Low Shrink/Low Potential From Collaboration Low Shrink/High Potential From Collaboration Category / Vendor Segmentation COLLABORATION ON FOOD WASTER REDUCTION 48 JANUARY–FEBRUARY 2018 | LOSSPREVENTIONMEDIA.COM

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