Loss Prevention, Auditing & Safety Conference 2009 Title Sponsor:

Building Your LP Program

Stephen ScottDirector, Loss PreventionTractor 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 $3B in sales 18-20K sqft. selling space Brentwood, TN (Nashville)

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

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

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

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.

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!

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

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

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

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

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

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

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)

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

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

Building Your LP Program

Q & A