Stock Shrinkage Investigation

Major Outdoor Recreation Retailer

Background & Brief

The client is the largest Outdoor Recreation Retailer in the UK and part of a larger European private equity owned retail group. Within the UK & I the client has more than 100 retail stores and a rapidly growing on-line business. The UK business had a significant stock shrinkage issue and SCALA were engaged to undertake an end to end review of all processes and stock flows to highlight risk areas and provide recommendations to address the issue.

Project Approach

SCALA were engaged to carry out an end to end review from purchase order placement, stock receipt & put away, order picking/assembly, despatch, in transit carriage, store receipt, store stock management through to sale, stock returns. The review included retail stores and e-com channels but most time and focus was spent on the client’s warehouse and operational centre where all stock was managed and distributed to and from retail stores and e-com items were picked packed and shipped direct to the customer. The project was a 12 week project but ran for 8 months due to a 5 month project break due to the Covid 19 pandemic resulting in temporary closures of all retail stores during a national lockdown.

Benefits & Results

The SCALA team worked closely with the O&CC team and produced a detailed Stock Shrinkage and Risk report table identifying 60+ issues and recommendations. The risk table was supported by a report containing evidence of the issue, recommendations to address and an implementation plan. The client’s stock shrinkage issue reduced significantly during 2020 i.e. c £2m year on year improvement, with stock shrinkage as a percentage of sales halving vs 2019

Final Outcome

The client is currently implementing changes and SCALA remain engaged to support delivery.
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