Shrinkage Road Map

The Shrinkage Road Map was developed by ECR Europe’s Shrinkage Group in an attempt to begin to impose a greater degree of rigour upon the stock loss reduction process through the use of a more systemic and systematic methodology. It is not intended to be a prescriptive solution to the problem of shrinkage but a tool to be used to better organise stock loss reduction efforts and help practitioners to think through and develop a more strategic approach. It was also designed to provide a better way of identifying the root causes of shrinkage, focusing particularly upon (but not exclusively) those caused by operational failures.

How does it work?

The Shrinkage Road Map is intended to act as a manual or guide, describing the overall activities that need to be undertaken in order to reduce shrinkage through the identification of the root causes of specific problems.

The general approach that forms the heart of the guide is shown in the figure below. As can be seen, this structure is both simple and systematic and provides the means for planning and undertaking stock loss reduction projects while guiding users towards continuous improvement through the cycle.

The Shrinkage Road MapThe Shrinkage Road Map is designed to enable both problem diagnosis and solution implementation. The structure consists of a sequence of steps where, through well-planned investigations, the operational failures that can present opportunities for malicious and non-malicious loss are exposed. These vulnerabilities are then prioritised and subsequently analysed to reveal the underlying root causes. The multi-disciplinary project team can then work together to develop appropriate solutions. These solutions are, where appropriate, tested in trials where their effectiveness is assessed. Where a solution is found to be successful it is then implemented widely and business practices standardised around it.

This approach to shrinkage reduction recognises that given the uniqueness of each business environment and product category where losses occur, the prescription of a single, ‘right’ strategy for reducing shrinkage is inappropriate. Instead, whilst a basic structure is provided, the approach is intended to be tailored to match prevailing circumstances in order for it to be effective. Knowledge regarding the scope for variation around this approach, what does and does not work and the reasons why comes with learning through experience. Indeed, shrinkage like other complex problems within organisations are best addressed by analysing them in their context in order to arrive at appropriate solutions.

It is therefore important to recognise that reducing shrinkage is a long-term and on-going learning process. Success comes from using a systematic approach to building the capability to identify and understand the root causes of shrinkage and reinforce practices that reduce loss.
This approach provides a means for involving not only a range of retail employees from different functions, but also those who may be external to the company such as logistics providers, manufacturers and loss prevention technology providers. By adopting this inclusive approach, it means not only that a broader range of experiences can be called upon, but also commitment to implement any agreed solutions may be more forthcoming. To help undertake the steps in the Shrinkage Road Map, a number of techniques and tools are utilised. These were chosen to aid not only communication and understanding but also ascertain the root causes of operational failures.

Thus, the Shrinkage Road map is designed to be an easy to use tool enabling loss prevention practitioners to quickly identify the root causes of loss and develop appropriate cost effective solutions to reduce losses while at the same time maximising sales.

Should you wish to learn more about the Shrinkage Road map or organise a workshop please contact Professor Adrian Beck: bna@le.ac.uk