Inventory shrinkage is one of the major hindrances in the growth of small retail businesses. Inventory shrink is the difference between the expected revenue to the actual revenue the retail business makes.
Now that been said, how can this shrinkage be reduced so that your retail business can achieve its full potential?
Loss prevention is the next step to reduce shrinkage in the business. However, it requires a lot of precision and expertise in identifying the factors associated with shrinkage and accordingly act upon it.
Let’s Understand First What Is Shrinkage?
Shrinkage is the loss of inventory for certain important factors such as administrative error, damage of goods while in transit to the store or in-store damages, shoplifting, employee theft, and even vendor fraud.
Identifying the Causes of Shrinkage
There are various reasons associated with loss. These can be damaged goods during the transit to your store or in-store damages of goods. There can be shoplifting or theft by dishonest employees. It can also be because of fraudulent activities by vendors or suppliers. Then there can be human errors while dealing with cash transactions. There can be pricing errors and also ineffective inventory management.
Install Loss Prevention Modules
Loss prevention modules are a comprehensive approach to deal with various factors associated with retail shrinkage. Moreover, it helps in reducing the overall expenses of the business.
There are several high-tech loss prevention modules available in the market. And the best ones are loaded with features such as:
High-Resolution Camera – It helps to record the entire process of operations. And, also takes images during low light conditions. This includes body-mounted cameras by the store staff. It is a great tool to keep yourself informed about the happenings at the store.
GPS Product Tracking – It is about tracking the location and movement of a particular product.
Use of Biometrics – It requires fingerprints or retinal scan of a specific person to gain access to a particular section at the store.
Smart Shelves – This feature detects the movement or removal of a product from shelves based on the defines criterions.
Integrated Inventory Management (IMS) System
An IMS system helps in effective operations at the store while helping with a more efficient supply chain process and lowers the inventory management cost. This streamlining of operations ensures a good Return on investment (ROI).
You must train your employees or workers directly working with the inventory to help them aware about the right methods and techniques of handling inventory.
Physical Verification of Goods
Physical audit/verification of goods is an integral part of supply chain management. Let’s check out why it is still relevant in the technologically advanced business environment.
Physical counting of inventory at regular intervals helps in detection of theft, loss or error in counting. It also allows you to identify any deterioration or misuse of goods.
Strategic planning of Reorders and minimum stock level is possible through regular verification of goods.
Physical audit of goods allows you to comply with the regulatory obligations and other government requirements safeguarding your business from any tax or operational penalty or legal action.
Verified Inventory Data
The scope of error and mistakes are possible even if you are using technology or systems. Physical verification helps you to closes this loop by verifying the data in the books with the actual goods present in your store.
Regular physical audit helps in minimizing your inventory shrinkage by putting together all your systems. It is also a good way to test the effectiveness of other systems and technology you are using to streamline your inventory. At VGNC, we offer comprehensive physical verification services in Delhi NCR. We advance solution allows you to gain better control over your inventory regardless of its location. To know more, call us now!