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Building Your LP Program

Building Your LP Program. Stephen Scott Director, Loss Prevention Tractor Supply Company. Tractor Supply Company. Specialty niche retailer catering to hobby farmers, ranchers, land and pet owners and anyone who lives the rural lifestyle 885 stores in 44 states 5 distribution centers

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Building Your LP Program

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  1. Building Your LP Program Stephen Scott Director, Loss Prevention Tractor Supply Company

  2. Tractor Supply Company • Specialty niche retailer catering to hobby farmers, ranchers, land and pet owners and anyone who lives the rural lifestyle • 885 stores in 44 states • 5 distribution centers • $3B in sales • 18-20K sqft. selling space • Brentwood, TN (Nashville)

  3. State of Business in 2003 • Day one on the job • 400 stores in 30 states • 1.2B in sales revenue • No loss prevention department • No proactive thoughts or actions • No budget for security resources • Shrink levels unacceptable • A preconception about a “security” department

  4. Your Role and Your Culture • How will the department be defined? • Security department • Bad guy for Ops and HR • A necessary evil or • A strategic business partner • A professional resource

  5. Partnerships • Identify the people or groups critical to success and build relationships • Human Resources • Educate them on LP and how you can affect them • Store Operations • Make them see you as a resource and not an oversight department • Finance (Budgeting) • Effectively communicate objectives and ROI information

  6. Assess Your Current Situation • What can be fixed with little or no money? • Policies (benchmark from peers or mentor) • Cash handling procedures • Key control program • Open and close procedures • Trash removal, package checks, etc.

  7. Low Hanging Fruit / Early Wins • Contracts • Evaluate all LP related contracts • Alarms, employment screening, security hardware • Vendor line reviews/bids • Savings with or without changing vendors • Major internal cases • No one has been looking • Communicate success stories!

  8. Get to the Data • Use existing software to get simple reports • Get data on negative POS transactions • 3rd party exception reporting • Wait until you can support it • Financial Data • What merchandise categories are causing the shrink • Attack accordingly • Where else can you make the biggest splash • Cash, checks, credit

  9. Investigations • Do the proper diligence on each case, but don’t spend all your time on investigations • Use telephone interviews • Don’t handle every discount and soda case • Use the early low hanging fruit and large cases to your advantage • Shows ROI for resources and the department

  10. Prioritize your Budget • Limited funds…spend effectively • Field loss prevention • CCTV • EAS • Benefit denial products • Corporate LP support • Logistics loss prevention • Case/Incident management • 3rd party exception reporting • Awareness program

  11. Vendor Partnerships • CCTV and EAS • Test products at no cost • Choose your test stores carefully • These resources will not fix operational weakness • Effectively communicate the ROI • Emphasize crossover benefit with CCTV (Risk/HR) • Don’t advocate a huge spend without a certain timely ROI

  12. Field Resources • Regional LP Managers • Sold the first RLPM position as a test* • Huge success – took work away from operators and HR • Hired hard – Find people that fit your culture • The Key • Operators saw success and wanted more LP • LP was not forcing the issue *I forgot to mention this was a test to the first RLPM we hired

  13. RLPM Focus – High Impact • Target Stores • Focus on the worst first (10-15 stores each) • High Shrink Reviews • Analyze PI data, general shortage interviews, audits, physical security assessments • Training and Awareness • Store, district and regional meetings • Store audits • New stores • Investigations

  14. Current Staffing • 8 Regional LP Managers • 100+ stores each / $400M sales volume • LP Operations Manager • Alarms, CCTV, EAS, key control, POS • Logistics LP Manager • National Investigator • POS Exception Team (3)

  15. Summary (Do’s and Don’ts) • Do… • build key relationships • Find the people important to your success • win early without spending money • Contracts, policies, low hanging cases • prioritize and test • Hardware, software, people • communicate your success and sell it for the future • Learn how to effectively present your ROI

  16. Summary (Do’s and Don’ts) • Don’t… • put all of your brilliant ideas on the table at one time • Prioritize and chip away at the critical few • be concerned with internal case stats • Be seen as a business unit not a security team • compromise when hiring • Hire hard and surround yourself with talent

  17. Building Your LP Program Q & A

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