3/4/2011. FMI presents. Presented by: Larry Miller. The Retail Control Group Larry Miller, LAM Consulting, Inc.

Transcription

1 FMI presents RE-FOCUS & RE-LOAD FOR Presented by: Larry Miller The Retail Control Group Larry Larry Miller, Miller, LAM LAM Consulting, Inc. Inc. 1

2 The Unfortunate Truth We have spent the last 20 years trying to: Catch Vendor Theft at our Back Doors Catch Cashier Theft at our Front Doors Catch Shoplifters with our DVR s, EAS and Track, Analyze and Fractionalize to the smallest detail every pattern and blip It s Time To: Re-FOCUS on the Real Profit Drivers LARRY MILLER Corporate Retail Experience Started as a bagger, then night crew, Produce Manager, FE manager, Store Manager, District Manager of 16 stores, Area Director of 52 stores, VP of Operations 160 stores. Independent Supermarket Owner/Operator Software Entrepreneur & Author Creator of ShrinkTrax and SmartStore Ernst and Young 2000 EOY Award Winner 3 Books, 116 Articles and 14 White papers Today: I Teach Retailers to GROW PROFIT CONTACT:

3 Installed Best Practices Shrink Vs. Profit? Half Empty? Half Full? 3

4 What is Shrink?? The difference between the retail value of product received and the amount received for that product at the time of it s sale. Where s the Shrink? Just 38% of available shrink for recovery. General Employee 25% Shoplifting 28% Cashier-Caused 24% Receiving 7% Pricing 4% Acct g 4% Damage 8% 2.27% Average 4

5 Creating PROFIT! % of LP Pros rate their effectiveness in Combating Shoplifting, Employee and Vendor Theft at BEST LP Thinking SHRINK IS LOST PROFIT. So Let s talk PROFIT! 1. 62% of your shrink is from Operations % of shrink comes from Shoplifting, Receiving, Employee and Cashier Caused. 3. Focus on Inv Controls, Turns & Conversion 4. Measure Known Loss. 5. Learn, Teach, Collaborate and FOCUS! 5

6 Where's The Shrink? Operational 59% Theft 36% 2011 National Supermarket Research Group - Preliminary Operational Production Planning 10% Employee Caused 9% Known Loss 14% Rotation 7% Product Handling 9% Damage 4% 2011 National Supermarket Research Group - Preliminary 6

7 Non-Operational Vendor 3% General Employee 9% Shoplifting 13% Cashier Caused 11% 2011 National Supermarket Research Group - Preliminary Facts & Stats Best-In-Class GOALS: Total store shrink = 1.20% of sales. Perishable shrink = 18% less than industry av. Vendor Theft = 16% less than industry av. Cashier Theft = 32% less than industry av. Top 20% of Store Managers have 26% less store shrink than peers. Top Companies have written Operating STANDARDS and active LP and Store Manager collaboration. Use Total Store Manager Best Practices. 7

8 What s Your Inside BRAND? Narrow or Broad? Isolated or Collaborative? Total Store or Just Parts? Theft Catch Secure or PROFIT EMPOWERING? The BIG Opportunity Only 14% of LPM s are actively involved in Perishable Shrink Prevention. Only 18% are actively involved in Grocery Shrink Prevention Best Practices. Just 26% are actively involved in store-wide Known Loss Control Best Practices. COMBINED: We are missing optimal control of 58% of Store wide Shrink Loss. 8

9 Shrink by Department 6.27% 5.53% 4.76% Best-in-Class practices can improve profit by 18% 5.01% 1.29% Creating PROFIT! Reducing SHRINK 18% produces the same bottom line PROFIT as would an 22% Increase in Sales. 9

10 Now Imagine: 18% LOWER SHRINK Larry Larry Miller, Miller, LAM LAM Consulting, Inc. Inc. Now Is The Time!!! Engage the Boss in a BOLD, NEW Way. Expand your Reach and Impact. Raise the Profile of Loss Prevention. Getting more VISIBLE. Create Your Loss Prevention Profit Center. It s a Matter of: VALUE Change your Value Proposition and You Will Get BETTER FOLLOW THRU, EXECUTION and RESULTS. 10

11 Your Challenge The Relentless Pursuit of Better! Lesson #1 You Can t Catch Your Way to Lower Shrink - Larry Miller 11

12 Now: It s Time To Think BIGGER Larry Larry Miller, Miller, LAM LAM Consulting, Inc. Inc. A Warning To Our Younger Viewers The ideas presented in this session may cause a CHANGE in your thinking and lead to radical profit improvement. 12

13 3 BIG IDEAS: 1. Focus on PROFIT. How to be EXPERT PROFIT MAKERS and PROFIT COACHES! 2. 5 Key Programs. This is an evolution that unfolds over a 9 month period. 3. A Total FOCUS ON PROFIT. Driven by YOU the Leader.. THE BIG IDEA!!! YOU WANT PROFIT: 1. Start with a serious look at your current practices to see what is / isn t working. 2. Begin a Process Of Change an EVOLUTION to permanently impact your PROFIT FOCUS! 3. EDUCATE! TRAIN! COACH TO SUCCESS! 4. Build-in Sustainability! Think Like a Total Store Manager 13

14 Larry Larry Miller, Miller, LAM LAM Consulting, Inc. Inc. FOCUS ON PROFIT IMPROVEMENT 20% PRODUCE Increase Increased PROFITS Profits MEAT STORE 0% -20% Reduce Reduced SHRINK Shrink Less Than 120 Days 14

15 What Prevents LP? Because Manager s Don t Know How To Fix It. Let s Talk Profit Realization 15

16 Acres of Diamonds Lesson #2 Raise Your Expectations Excellent PROFIT MAKING and Shrink Control Only Comes With BIGGER Expectations. - Larry Miller 16

17 YOUR JOB #1 is: PROFIT Realization PROFIT and It s an Attitude and an Expectation 17

18 Your #1 Offense New for 2011 The Total Store Manager 1. New Knowledge & Focus (Sales, Sanitation, Shrink) 2. Consistent Visibility & Presence (StoreWalk) 3. New Attitude of Support (not catch) 4. The Coach : Vision, Teamwork, Direction. 5. New, Clear Standards & Expectations 6. New Quantifiable Goals He is A Man With A Plan! New Expectations 1. Executives MUST Open Their Minds to More Effective Standards, Systems & Practices. 2. Store Manager s MUST Learn and Use The TOP 5 Best Practices That Cause Profit. 3. Everything Is Measureable. 4. Profit Realization Comes from Store Operations-centric Loss Prevention 5. You Can t Catch Your Way to Lower Shrink! 18

19 Re-FOCUS & Re-LOAD For 18% New Profit Realization Follow These 5 BOLD, FRESH PROGRAMS Total Store Manager 5 Best Practices 1. StoreWalk Twice each day, on-purpose! 2. Smart Inventory Control The Rule of 3 and programmed inventory turns for Cash Flow/ Freshness, Damage Control and Shrink Control. 3. Backroom Organization & Sanitation Wall-to-wall and deep into corners. 4. Known Loss Control Reason why management awareness and adjustment. 5. Cashier Performance Management for CSE and Shrink Control. 19

20 12 Standard Disciplines How to Coach Their Teams to Consistently Success. The Profit System 12 Profit Realization Best Practices & Standards 1. A disciplined StoreWalk Standard and Practice. 2. Backroom security, inventory control and organization. 3. Inventory Turnover Goals by Department. (Perpetual Inventory) 4. Cashier KPI s and Targeted Goals. 5. Empty Perishable Coolers on Receipt of Delivery. 6. Cutting Lists and Production Planning. 7. 9am Perishable Readiness / 6pm MIC Perishable Walk 8. Loss Prevention Night Visitations 9. Store Manager Loss Prevention Checklists 10. Sanitation Standards & Practices 11. HR/LP Training, Orientations, The Coaching Culture 12. Customer Service Larry Larry Miller, LAM Consulting, Inc. 20

21 Train or Re-Train 1. Managers need to understand their Business Profit Drivers. 2. Managers to see and feel their Profit Drivers. 3. Managers must know their vital Shrink Control and Profit Making # s. 4. Managers must learn to Coach For Profit. 5. Train Managers & Supervisors must learn to Lead their Teams to PROFIT. 21

22 7 Loss Prevention BP s 1. Teach employees to prevent Shoplifting with excellent customer service. 2. Continue current physical security, analytics, Policies and Controls. Just differently. 3. Get engaged in Operational Shrink Control. 4. Focus on Inv Control, Turns & Conversion. 5. Measure Known Loss and Investigate WHY? 6. Promote Think Shrink Collaboration and PROFIT HUDDLES. 7. Conduct Single Topic Briefings at Manager Mttgs. Walk Your Store Twice a Day! 22

23 StoreWalk The Store Manager's DAILY StoreWalk Conducted By The Store MIC Each Day at 8:00a and 4:00p EveryDay Thursday Notes & Comments ALL AREAS: All Adv Items Available for Sale x x Actual-to-Planned Labor / Adjust? x x Sales Readiness x Discuss Today's & Tomorrow's Plan x PERISHABLES (30 minutes) Sales Floor Rack Check Freshness "Touch" Check - All Racks x Approve Space Allocation Managers x must x be taught to see Advertised Item Check x Proper Signs In Place beyond the x tactical and be purposeful Displays Level & Presented x "Smell Check" All Areas x Displays Set for 12-hour Sell Thru x x GROCERY BACKROOMS Excess Backstock Controlled (7%) x All Exit Dooor Seals Controlled x Wall-To-Wall Swept and Picked-up x Backstop of Current Adv Items? x Test All Exit Alarms Sight Check All Service Rooms Sell or Xfer 20 Pieces of Old Stock x x Merchandising: Complete audit of (order guide) purchases to sales. This determines if what we are ordering is being produced in proper amounts so as to display all required products for proper GM% mix and what is actually selling. Additionally: Quantities being ordered and stored are in line with anticipated sales. Verify the following: Questions: Comments: Value: Score: Proper items are being ordered for smart merchandising and productivity and turnover. Required varieties of pre packaged items are being ordered and displayed for sales. Required varieties of produce are being ordered and displayed for sales. Inventory: Review of last 2 monthly physical inventory reports. This is to look for evidence of inventory manipulation or mal practice. Verify the following: Questions: Comments: Value: Score: Look for variances in quantities between months and correlation between what was ordered, scaled/produced, and sold. Order guide review: Is it apparent that full variety ordering is occurring so as to assure maximum productivity, product variety and mix, etc. 23

24 So; What to do For the next 8 Weeks? 1. Commit to a formal, consistent SW every day, twice a day. SEE-THINK-TAKE ACTION 2. Talk Shrink Reduction for PROFIT Realization at every WEEKLY Store Manager meeting. 3. Talk Shrink Control Awareness and Prevention to EVERY new hire. 4. FOCUS ON PROFIT! Larry Larry Miller, LAM Consulting, Inc. Inc. 24

25 Lesson #3 Having great produce isn t enough Having a great meat department isn t enough Having great perishables isn t enough Having great customer service isn t enough You must have cost and loss controls that produce strong margins - with broad and deep customer satisfaction. Perishable Shrink Meat Seafood Deli Produce Dairy Floral Bakery Overall Shrink 4.86% 4.92% 5.98% 5.02%.82% 6.24% 6.05% Employee Theft (non cashier) 12% 9% 15% 11% 11% 19% 24% Cashier Theft and Errors 20% 12% 15% 21% 16% 13% 15% Receiving / Damaged 3% 9% 6% 6% 10% 9% 5% Pricing / Scan File Errors 7% 11% 11% 8% 7% 7% 6% Shoplifting 23% 20% 22% 12% 18% 14% 11% Over ordering 12% 15% 9% 15% 12% 16% 7% Improper Handling / Space Allocation / Overproduction Throwaways 23% 24% 22% 27% 26% 22% 32% 25

26 8 Best Practices To DRIVE Perishable PROFIT Larry Larry Miller, LAM Consulting, Inc. PROFIT DRIVER #1 1. Everything Starts With A Smart Order. 17% of Perishable Shrink can be traced to faulty Ordering. Smart orders are written to meet anticipated sales and display requirements. Efficient Turnover = LOWERS SHRINK! Reduce shrink up to 17% 26

27 Order to Produce This 27

28 PROFIT DRIVER #2 2. Practice The Rule of 3. Order perishables for 3 days anticipated sales and sell at full value what you receive within 3 days. Improve Freshness & Quality and Reduce shrink by 8% 28

29 TSM Controlled Cooler TSM Controlled Coolers 29

30 Following These Best Practices Produces 1. Lower Shrink. 2. MORE PROFIT! 3. Fresher Product for Sale 4. Higher Customer Satisfaction 5. Improved Productivity & Morale 6. Cleaner Store and Work Areas 7. Customer Service Excellence Shrink Control and Customer Satisfaction Begins HERE 30

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32 TSM Controlled Backroom TSM Controlled Backroom 32

33 TSM Controlled Backroom PROFIT DRIVER #3 3. Turn-over Storage Inventory. A tell-tail sign of a department under control is an organized, code dated storage cooler. Every Manager MUST understand the importance of Inventory Turn-over. Reduce shrink by 7% 33

34 Excellent Backroom & Cooler Control Will Reduce Shrink By 12% TOP PROFIT THINK 1. Receive it fresh. 2. Keep it Fresh. Refrigerate. 3. Produce only to meet demand. 4. Minimize compression under weight 5. Sell it! Sell it soon after receipt. 34

35 The Total Store Manager Effect 20% PRODUCE Increase Increased PROFITS Profits MEAT STORE 0% -20% Reduce Reduced SHRINK Shrink Less Than 120 Days Larry Miller s 8 Indisputable Laws 8 Indisputable Laws of Loss Prevention 1. The Law of Consistency managers must focus on the 4 S s of Supermarket Success to bring higher profits. 2. The Law of Expectation you must balance between past and future expectations and have a clear LP vision. 3. The Law of Standards set clear store performance standards to set the stage for your success. 4. The Law of Execution... an ounce of (preemptive) prevention is worth more than a pound of (reactive) cure 35

36 Larry Miller s 8 Indisputable Laws 8 Indisputable Laws of Loss Prevention 5. The Law of Inspection effective auditing is the circular, repeatable process that triggers shrink reduction. 6. The Law of Change C-level change management and choosing the right strategic partner will help you sustain changes that build profits 7. The Law of Collaboration and how corporate-wide cooperation will turn failure into success Evolve or Die! 8. The Law of Accountability and how everyone MUST be accountable for their role in creating your winning loss control culture -- and it all starts with YOU! YOUR BRAND Professional Store Supervisor Customer Service Excellence PROFITABLE SELLING TOTAL STORE MANAGER 36

37 Lesson #8 The New Loss Prevention Profit Realization is a team sport - Larry Miller The RESULTS? Company 1: (22 Stores) CASH FLOW $1,050M GROCERY SHRINK 12% PERISHABLE SHRINK 34% Company 2: (37 Stores) CASH FLOW $840K GROCERY SHRINK 16% PERISHABLE SHRINK 23% 37

38 See Actual Case Study RESULTS in Your Pass-out Package. Then; Chose The Training Program That s Right for YOU! Final Lesson: If it is to be, it s up to me - Larry Miller 38

39 COMMIT to The Relentless Pursuit of Better! REMEMBER If you continue to do what you have always done You will continue to get what you always got. 39

40 For GUARANTEED PROFIT Learn How To Grow Your PROFIT As A Total Store Manager Company Contact Larry Miller at NSRG presents THE NATIONAL SUPERMARKET SHRINK SURVEY FOR SIGN-UP NOW!!! 40

41 FREE Web-based Training Beyond Shrink Control GO TO SIGN-UP TODAY!! 81 41