Today, loss prevention is the business of profit enhancement, but for years, loss prevention wasn’t loss prevention at all. For along time, loss prevention was waiting for a bad shrink number or a theft, and to go investigate to determine what caused that particular loss. That’s not loss prevention that’s loss reaction. Loss prevention only occurs when loss is prevented before it happens by implementing practices and correcting behaviors that through these activities caused shrink. By changing behavior, “shrink can be prevented before it occurs.”
Today, loss prevention is the business of profit enhancement, but for years, loss prevention wasn’t loss prevention at all. For along time, loss prevention was waiting for a bad shrink number or a theft, and to go investigate to determine what caused that particular loss. That’s not loss prevention that’s loss reaction. Loss prevention only occurs when loss is prevented before it happens by implementing practices and correcting behaviors that through these activities caused shrink. By changing behavior, “shrink can be prevented before it occurs.”
“You Can’t Catch Your Way to Lower Shrink”
Think about this: 68 percent of shrink is “preventable,” while only 32 percent might be identifiable after the fact-hence “You can’t catch your way to lower shrink.” Where else can you immediately gain, and consistently maintain, as much as 10, 20, or even 30 percent profit. You can’t cut labor 30%. You can’t cut cost of goods 30%. And you can’t catch your way to lower shrink.
Loss prevention leadership requires changing the behaviors of those AutoZoners who cause the shrink in our stores, not by trying to catch them, but by teaching them better operating habits, reinforcing and rewarding shrink-stopping behavior, and by teaching practices that promote profitable operations.
How Attitude Effects Shrink Prevention
According to the Supermarket Research Group in 2003, management’s attitude is a key element in creating an immediate, deep impact on a stores loss prevention culture. Managements attitude toward and prioritization of shrink prevention is the catalyst for achievement of a companies goals. The best AutoZoners understand their roles in the loss prevention process and take it personally to prevent the shrink and help to increase profitability.
THE FIVE COMMOM TRAITS OF SUCCESSFUL LOSS PREVENTION LEADERS
1. Recognize and acknowledge that shrink does exist in your store and do an exceptional job of identifying where the losses come from.
2. Become an excellent student and learn different loss prevention programs and methods that have been successful in other stores and share these with all AutoZoners.
3. Refuse to accept shrink above “Best in Class” Levels.
4. Understand the potentially dramatic R.O.I .from shrink reduction.
5. Commit the resources to implement and maintain these methods to achieve your short term and long term goals.
Shrink control is an in-store manifestation of the leadership and discipline of store management.
The Five Characteristics of Cultural Best Practices for LP Leadership
Continuous Learning – Stores that achieve the most consistent control of shrink loss, create a store environment of shrink awareness that is continuously reinforced by ongoing training for all AutoZoners.
Changing Old Habits- Leaders of top-performing stores recognize that they must modify behavior to achieve higher levels of success.
Set Goals- Of all of the areas affecting the profitable operation of a AutoZone store, the one area most neglected on the P&L is shrink loss. In order to obtain optimal shrink loss control we must monitor our measure our losses and devise a way to stop those critical areas of incurring any additional loss.
Educate- By teaching control and prevention practices and highlighting desired behavior and much as problematic behavior, AutoZoners can create an environment were everyone is held equally accountable for the control of shrink loss.
Inspect What You Expect- By nature all human beings perform best when they think their work will be inspected. Lay down the expectations and hold people accountable to perform up and beyond your expectations. You must inspect your expectations routinely and make it a way of life to be truly successful.
