Identifying Operational Failures

Given our overarching premise that operational failures are the root cause of most forms of shrinkage, the next step is to describe an approach, which has been developed over a number of years by the ECR Europe Shrinkage Group for identifying these failures. This work, which began back in 1999 sprung from the Group’s desire to develop a new way to begin to address the challenges of shrinkage within the retail sector. In the subsequent years, the Group has road tested this approach in over 40 companies and across more than 100 supply chains. It is thought to have produced savings in excess of 600 million for those companies that have used it. The approach is called the Shrinkage Road Map, and it is made up of a series of steps that enable loss prevention practitioners to more accurately identify the root causes of the problems they face and then develop ‘fit for purpose’ solutions to deal with these problems (Beck, Chapman & Peacock, 2002, 2003). What is unique about this method is that it was designed by a wide range of different groups including retail loss prevention practitioners, representatives from both manufacturers and logistics, and academics specialising in supply chain management and criminology. By bringing together such a multi-disciplinary group, a much more holistic, systemic and collaborative framework was achieved, which we believe can only add to the value of the Shrinkage Road Map (Beck et al., 2003). As detailed below, underlying this approach are five key principles.