http://books.google.co.in/books?

id=IPoSsk65dhcC&pg=PR5&dq=Free+p
review+on+Buying+and+Merchandising
&source=gbs_selected_pages&cad=5#v=o
nepage&q=&f=false

A summer training project of

Big bazaar

Title: Pilferage and loss prevention

mechanism in store
Submitted to: Submitted by:
Mr. Sunit Roy Madhurendra kumar
PGDM (RETAIL)

Acknowl
edgement
This project report has been made during the spring season of year 2009 and is the
result of 8 weeks of hard work. These 8 weeks have been a very interesting period
that has provided us with a deeper knowledge about the area where shrinkage
happens in store. With this project, we hope to identify all the loopholes of
shrinkage.

A study like this cannot be completed without help from other persons and
therefore we would like to express our gratitude to all persons having contributed
to completit ion of this project.

First of all, we would like to think our mentor Mr. Sunit Roy {ASM}, Big Bazaar,
Wazirpur New Delhi. Who has been provided us with guidance, inspiration,
perspective and stimulating discussion, throughout the writing of this report.
Additionally we would like to express our gratitude to Mr.Kapil Tayagi (Head
SCM). Thank you for allocating this project. This study would not have been
possible conduct without your help.

Furthermore, we would thank to Mr. Lavkush Singh to provide us relevant

information for this Project.

Finally, we would like to thank our friends and family member for giving us
constant support and encouragement.

PREFACE:

I Madhurendra Kumar, doing Post Graduate Diploma in Retail Management

{PGDM(RM)} student of ACCMAN Institute of Management, Greater
Noida (UP), undergone summer training program in BIG BAZAAR (Wazirpur)
of Pantaloon Retail India Limited (PRIL) an arm of Future Group. I have been
assigned a task as a project related to checking out shrinkage in store. The
project title is “PILFERAGE AND LOSS PREVENTION MECHANISM IN
STORE”. The project duration is two months.

I feel great and pleasure in presenting this research project which is essential in
partial fulfillment of our Retail management program. Research Project is an
integral part of curriculum ad its purpose is to provide the student with practical
exposure of market in today’s changing scenario. It helps in development of
practical scales and analytical thinking process. It also makes students aware of
about the perception and taste of consumers. Thus it helps in molding the
students according to the requirement of the market.

After globalization there has been vast change in Indian retail market. Global
players have entered the fray which has forced the Indian retailers to change
their strategies and culture. There is cut throat competition and have realized
the value of customers. Consumers buying preferences, taste, choice has
changed and have become more quality conscious. It leads to boom in
consumer market and people were on the spending speed.

So in such a competitive retail market where every retailer is trying to capture

maximum no. of consumer market. For attracting more and more customer
retailer are in the race to achieve a cost status. In this process they are setting
low margin and are also committed to provide good service to the customer at
the best of their ability. So in this competitive era even a less margin does
matter and if shrinkage happens then it push back retailer at their back foot.
Owing to that in this project I have put my all concentration on shrinkage its
causes and safety measure in order to make intensity of shrinkage less strong.

Table of content

S.No. Particulars Page No.

1. Project Title 1
2. Acknowledgement 2
3. Preface 3
4. Table of content 4

5. Executive Summary 5-7

6. Company profile 8-26

7. Big bazaar profile 27
8. SWOT analysis of big bazaar. 28
9. Store profile 29
10. Work process at stock receiving point. 30-39
11. Project analysis 40-62
12. Stock take 63-67
13. Recommendation 68-70

14. Conclusion 71

15. Bibliography 72

Executive Summary

Retailing is emerging as a sunrise industry in India and is presently the largest

employer after agriculture. In the year 2004, the size of Indian organized retail
industry was Rs 28,000 Crores, which was only 3% of the total retailing
market. Retailing in its present form started in the latter half of 20th Century in
USA and Europe and today constitutes 20% of US GDP. It is the 3rd largest
employer segment in USA. Organized retailing in India is projected to grow at
the rate of 25%-30% p.a. and is estimated to reach an astounding Rs 1,00,000
Crores by 2010. The contribution of organized retail is expected to rise from
3% to 9% by the end of the decade. The projection for the current year ie 2005
is Rs 35,000 Crores. In India, it has been found out that the top 6 cities
contribute for 66% of total organized retailing. With the metros already been
exploited, the focus has now been shifted towards the tier-II cities**. The 'retail
boom', 85% of which has so far been concentrated in the metros is beginning to
percolate down to these smaller cities and towns. The contribution of these tier-
II cities to total organized retailing sales is expected to grow to 20-25%. In the
year 2004, Rs 28,000 Crores organized retail industry had Clothing, Textiles &
fashion accessories as the highest contributor (39%), where as health & beauty
had a contribution of 2%. Food & Grocery contributed to 18% whereas Pharma
Retail had a contribution of 2%. Pantaloon Retail (India) Limited, is India’s
leading retailer that operates multiple retail formats, the company operates over
12 million square feet of retail space, has over 1000 stores across 71 cities in
India and employs over 30,000 people.
◊ Economic Overview: Indian is currently undergoing an economic revolution
which is generating fast-paced changes and development.

There is stable 8 % annual growth, but this year recession has down pace the
world economy so consumer purchasing power came down which derail the retail
sector but with improvement of market retail in also improving. There is some fact
which rescues Indian retail market.

• Rising foreign exchange reserves of close to USD 140 billion,

• Consistent and flowing Foreign Direct Investment(FDI) of close to UDS 8
billion,
• Export surge in excess of 20%.

This altogether enables the Indian economy to expand in coming years.

◊ Investment eccentric: With a rapidly expanding consumer base (private

consumption currently account for 61% of India’s GDP) and stabilized consumer
price index rate 4.2%. India is now preferred investment destination and has
surpassed the U.S to become the second most favourable destination for FDI, in
the world after China.

DEMOGRAPHICS AND CONSUMER BEHAVIOUR

• A growing population, a youthful workforce and soaring consumer confidence

are solid argument for long term growth.

• A growing population, a youthful workforce and soaring consumer confidence

are solid argument for long term growth.

More than 50% of the India’s Population is less than 25 years of age compared to
others developed countries. Age profile
% of total 1999 2004 2009 Trend
population
0-14 years 34.0 31.7 29.6 ↓
15-64 years 61.4 63.5 65.2 ↑
Over 65 years 4.6 4.8 5.2 ↑
 MALL EVOLUTION PROCESS IN INDIA

Let us look at the evolution process

Detailing reasons why Indian organized retail is at the brink of revolution, the
IMAGES-KSA report says that the last few years have seen rapid transformation
in many areas and the setting of scalable and profitable retail models across
categories. Indian consumers are rapidly evolving and accepting modern formats
overwhelmingly. Retail Space is no more a constraint for growth. India is on the
radar of Global Retailers and suppliers / brands worldwide are willing to partner
with retailers here. Further, large Indian corporate groups like Tata, Reliance,
Raheja, ITC, and Bombay Dyeing.
Company Profile:-

Pantaloon Retail (India) Limited, is India’s leading retailer that operates multiple
retail formats in both the value and lifestyle segment of the Indian consumer
marker. Headquartered in Mumbai (Bombay), the company operates over 12
million square feet of retail space, has over 1000 stores across 71 cities in India
and employs over 30,000 people.

The company’s leading formats include Pantaloons, a chain of fashion outlets,

Big Bazaar, a uniquely Indian hypermarket chain, Food Bazaar, a supermarket
chain, blends the look, touch and feel of Indian bazaars with aspects of modern
retail like choice, convenience and quality and Central, a chain of seamless
destination malls. Some of its other formats include, Depot, Shoe Factory, Brand
Factory, Blue Sky, Fashion Station, aLL, Top 10, mBazaar and Star and Sitara.
The company also operates an online portal, futurebazaar.com.

A subsidiary company, Home Solutions Retail (India) Limited, operates Home

Town, a large-format home solutions store, Collection i, selling home furniture
products and E-Zone focused on catering to the consumer electronics segment.

Pantaloon Retail was recently awarded the International Retailer of the Year
2007 by the US-based National Retail Federation (NRF) and the Emerging Market
Retailer of the Year 2007 at the World Retail Congress held in Barcelona.

Pantaloon Retail is the flagship company of Future Group, a business group

catering to the entire Indian consumption space.
FUTURE GROUP:

Future Group is India’s leading business group that caters to the entire Indian
consumption space. Led by Mr. Kishore Biyani, the Future Group operates
through six verticals: Retail, Capital, Brands, Space, Media and Logistics.

Apart from Pantaloon Retail, the group’s presence in the retail space is
complemented by group companies, Indus League Clothing, which owns
leading apparel brands like Indigo Nation, Scullers and Urban Yoga, and
Galaxy Entertainment Limited that operates Bowling Co, Sports Bar, F123 and
Brew Bar.

The group’s joint venture partners include French retailer ETAM group, US-
based stationary products retailer, Staples and UK-based Lee Cooper. Group
Company, Planet Retail, owns and operates the franchisee of international
brands like Marks & Spencer, Next, Debenhams and Guess in India. The
group’s Indian joint venture partners include, Manipal Healthcare, Talwalkar’s,
Blue Foods and Liberty Shoes.

Future Capital Holdings, the group’s financial arm, focuses on asset

management and consumer credit. It manages assets worth over $1 billion that
are being invested in developing retail real estate and consumer-related brands
and hotels. The group has launched a consumer credit and financial
supermarket format, Future Money and soon plans to offer insurance products
through a joint venture with Italian insurance major, Generalise.

The group is currently developing over 50 malls and consumption centres

across the country and has formed a joint venture company focusing on mall
management with Singapore-based Capital and, one of Asia’s largest property
companies.

Future Group’s vision is to, “deliver Everything, Everywhere, Every time to

Every Indian Consumer in the most profitable manner.” The group considers
‘Indianness’ as a core value and its corporate credo is – “Rewrite rules, Retain
values.”
Future Group Manifesto

“Future” – the word which signifies optimism, growth, achievement, strength,

beauty, rewards and perfection. Future encourages us to explore areas yet
unexplored, write rules yet unwritten; create new opportunities and new successes.
To strive for a glorious future brings to us our strength, our ability to learn,
unlearn and re-learn our ability to evolve.

We, in Future Group, will not wait for the Future to unfold itself but create future
scenarios in the consumer space and facilitate consumption because consumption
is development. Thereby, we will effect socio-economic development for our
customers, employees, shareholders, associates and partners.

Our customers will not just get what they need, but also get them where, how and
when they need.

We will not just post satisfactory results, we will write success stories.

We will not just operate efficiently in the Indian economy, we will evolve it.

We will not just spot trends; we will set trends by marrying our understanding of
the Indian consumer to their needs of tomorrow.

It is this understanding that has helped us succeed. And it is this that will help us
succeed in the Future. We shall keep relearning. And in this process, do just one
thing.

Rewrite Rules. Retain Values.

Group Vision

Future Group shall deliver Everything, Everywhere, Everytime for Every Indian
Consumer in the most profitable manner.

Group Mission

We share the vision and belief that our customers and stakeholders shall be served
only by creating and executing future scenarios in the consumption space leading
to economic development.
We will be the trendsetters in evolving delivery formats, creating retail realty,
making consumption affordable for all customer segments – for classes and for
masses.

We shall infuse Indian brands with confidence and renewed ambition.

We shall be efficient, cost- conscious and committed to quality in whatever we do.

We shall ensure that our positive attitude, sincerity, humility and united
determination shall be the driving force to make us successful.

Core Values

Indianness: confidence in ourselves.

Leadership: to be a leader, both in thought and business.

Respect & Humility: to respect every individual and be humble in our

conduct.

Introspection: leading to purposeful thinking.

Openness: to be open and receptive to new ideas, knowledge and information.

Valuing and Nurturing Relationships: to build long term relationships.

Simplicity & Positivity: Simplicity and positivity in our thought, business and
action.

Adaptability: to be flexible and adaptable, to meet challenges.

Flow: to respect and understand the universal laws of nature.
Pantaloon is not just an organization – it is an institution, a centre of learning &
development. We believe that knowledge is the only weapon at our disposal and
our quest for it is focused, systematic and unwavering.

At Pantaloon, we take pride in challenging conventions and thinking out of the

box, in travelling on the road less travelled. Our corporate doctrine, ‘Rewrite
Rules, Retain Values’ is derived from this spirit.

Over the years, the company has accelerated growth through its ability to
lead change. A number of its pioneering concepts have now emerged as
industry standards. For instance, the company integrated backwards into
garment manufacturing even as it expanded its retail presence at the front
end, well before any other Indian retail company attempted this. It was the
first to introduce the concept of the retail departmental store for the entire
family through Pantaloons in 1997. The company was the first to launch a
hypermarket in India with Big Bazaar, a large discount store that it
commissioned in Kolkata in October 2001. And the company introduced the
country to the Food Bazaar, a unique 'bazaar' within a hypermarket, which
was launched in July 2002 in Mumbai. Embracing our leadership value, the
company launched aLL in July 2005 in Mumbai, making us the first retailer
in India to open a fashion store for plus size men and women.

Today we are the fastest growing retail company in India. The number of
stores is going to increase many folds year on year along with the new
formats coming up.

The way we work is distinctly "Pantaloon". Our courage to dream and to

turn our dreams into reality – that change people’s lives, is our biggest
advantage. Pantaloon is an invitation to join a place where there are no
boundaries to what you can achieve. It means never having to stop asking
questions; it means never having to stop raising the bar. It is an opportunity
to take risks, and it is this passion that makes our dreams a reality.

Come enter a world where we promise you good days and bad days, but
never a dull moment!
Partner Companies:

Home Solutions Retail (India) Limited (HSRIL)

Home Solutions Retail (India) Limited (HSRIL) offers complete

retailing solutions for all products and services related to home building
and home improvement. The key product categories are Consumer
Durable & Electronics (CDE), Furniture, Home furnishing & decor,
Home improvement and Home services. HSRIL operates retail format
Collection-i, Furniture Bazaar, Electronics Bazaar, Home Town and e-
zone.

Future Brands Limited (FBL)

Future Brands Limited (FBL) has been incorporated on November,

2006 and is involved in the business of creating, developing, managing,
acquiring and dealing in consumer-related brands and IPRs (Intellectual
Property Rights).

Future Media (India) Limited (FMIL)

Future Media (India) Limited (FMIL) was incorporated as the Group’s

media venture, aimed at creation of media properties in the ambience of
consumption and thus offers active engagement to brands and
consumers. FMIL offers relevant engagement through its media
properties like Visual Spaces, Print, Radio, Television and Activation.

Future Logistic Solutions Limited (FLSL)

Future Logistic Solutions Limited (FLSL) has been incorporated as a

separate entity and is involved in the business of providing logistics,
transportation and warehousing services for all group companies and
third-parties.

Future Axiom Telecom Limited

Future Axiom Telecom Limited is a Joint Venture with Axiom

Telecom LLC, UAE. The Company has a 50% stake in Future Axiom
Telecom Limited (FATL) which is a joint venture Company with
Axiom Telecom LLC, UAE. The Company would be engaged in
sourcing and wholesale distribution of mobile handsets, accessories and
in setting up service centers for mobile handsets in India.

Pantaloon Food Product (India) Limited (PFPIL)

Pantaloon Food Product (India) Limited (PFPIL) was incorporated

with the object of sourcing and backward integration of food business
of the Company. PFPIL has sourcing and distribution bases at all key
cities across the country.

Future Knowledge Services Limited (FKSL)

Future Knowledge Services Limited (FKSL) was incorporated on

January, 2007 and is engaged in the business of business process
outsourcing and knowledge process outsourcing.

Future Capital Holdings Limited (FCH)

Future Capital Holdings Limited (FCH) was formed to manage the

financial services business of Pantaloon Retail (India) Limited and
other group entities. FCH is one of the fastest growing financial
services company in India, with presence in Asset Advisory, Retail
Financial Services and Proprietary Research. The company operates a
consumer finance retail format, Future Money and manages assets
worth over US$ 1 Billion through Indivision, Kshitij, Horizon and
Future Hospitality Funds. FCH subsidiary companies include Kshitij
Investment Advisory Company Ltd., Ambit Investment Advisory
Company Ltd., and Indivision Investment Advisors Ltd.

Future Generali India Life Insurance Company Limited

(FGILICL)

Future Generali India Life Insurance Company Limited (FGILICL)

was incorporated on October 30, 2006 to establish and conduct the
business of life insurance in India, which comprises of whole life
insurance, endowment insurance, double benefit and multiple benefits
insurance etc. The approval for carrying on Life Insurance Business has
been received from the IRDA in September, 2007.

Future bazaar India Limited (FBIL)

Future bazaar India Limited (FBIL) is set up as the e-Retailing arm of

 the Future Group for providing on-line shopping experience.
Futurebazaar.com was launched on January 2, 2007, and has emerged
as one of the most popular online shopping portals in India. It was
awarded with the “Best Indian Website” award, in the shopping
category, by the PC World Indian Website Awards.

Staples Future Office Products Private Limited (SFOPPL)

Staples Future Office Products Private Limited (SFOPPL) was

incorporated on January, 2007 and is involved in the business of
dealing in all kinds of office supplies, office equipments and products.
SFOPPL is a joint venture between the Company and Staples Asia
Investment Limited (a subsidiary of Staples Inc USA). The company’s
first retail outlet opened in Bangalore in December, 2007.

Joint Ventures Companies:

CapitaLand Retail India

The group is a joint venture partner in CapitaLand Retail India, along with
Singapore-based Capital and Limited. The company provides retail management
services to retail properties owned or managed by various group companies and
investment funds.

Footmark Retail

Foot mart Retail is a joint venture with Liberty Shoes and is engaged in the
retailing of footwear products in India.

Planet Retail Holdings Ltd.

The group is a joint venture partner in Planet Retail Holdings Ltd., which operates
sports, lifestyle and leisure retail chain. It also owns the franchisee and distribution
rights of brands like Marks & Spencer, Guess, Debenhams and Puma in India.
LINES OF BUSINESS

E-tailing: Futurebazaar.com.

Food: Brew Bar, Café Bollywood, Chamosa, Sports Bar, Food Bazaar

Fashion: aLL, Big Bazaar, Central, Fashion Station, Ginny & Jony, Pantaloons,

Lee Cooper.

Home & Electronics: Home Town, Furniture Bazaar, Electronics Bazaar, E-zone,

Collection i.

Telecom & IT: Gen M, M bazaar, M-Port.

General Merchandise: Central, Brand Factory, Fashion Station, Shoe Factory,

Pantaloons.

Leisure & Entertainment: Bowling Co, F 123.

Wellness & Beauty: Health Village, Star Sitara, Tulsi, Turmeric.

Books & Music: Depot.

 COMPANY TIMELINE

Major Milestones

1987
Company incorporated as Manz Wear Private Limited. Launch of Pantaloons
trouser, India’s first formal trouser brand.

1991
Launch of BARE, the Indian jeans brand.

1992
Initial public offer (IPO) was made in the month of May.

1994
The Pantaloon Shoppe – exclusive menswear store in franchisee format launched
across the nation. The company starts the distribution of branded garments through
multi-brand retail outlets across the nation.

1995
John Miller – Formal shirt brand launched.

1997
Pantaloons – India’s family store launched in Kolkata.

2001
Big Bazaar, ‘Is se sasta aur accha kahi nahin’ - India’s first hypermarket chain
launched.

2002
Food Bazaar, the supermarket chain is launched.

2004
Central – ‘Shop, Eat, Celebrate in the Heart of Our City’ - India’s first seamless
mall is launched in Bangalore.

2005
Fashion Station - the popular fashion chain is launched
aLL – ‘a little larger’ - exclusive stores for plus-size individuals is launched

2006
Future Capital Holdings, the company’s financial arm launches real estate funds
Kshitij and Horizon and private equity fund Indivision. Plans forays into insurance
and consumer credit.

2007

Future Group crosses $1 billion turnover mark.

Specialized companies in retail media, logistics, IPR and brand

development and retail-led technology services become operational.

Pantaloon Retail wins the International Retailer of the Year at US-

based National Retail Federation convention in New York and
Emerging Retailer of the Year award at the World Retail Congress
held in Barcelona.

Futurebazaar.com becomes India’s most popular shopping portal.

2008 Future Capital Holdings becomes the second group company to

make a successful Initial Public Offering in the Indian capital
markets.

Big Bazaar crosses the 100-store mark, marking one of the fastest
ever expansion of a hypermarket format anywhere in the world.

Total operational retail space crosses 10 million square feet mark.

Future Group acquires rural retail chain, Aadhar present in 65

rural locations.
 AWARDS & RECOGNITION

2009
Images Fashion Forum 2009

 Most Admired Fashion Group Of The Year - Future Group.

 Most Admired Private Label - Pantaloons, the lifestyle format.
 Critics Choice for Pioneering Effort in Retail Concept
Creation - Central.

Coca-Cola Golden Spoon Awards 2009

 Most Admired Food & Grocery Retailer Of The Year .

 Most Admired Food Court.

 Most Admired Food Professional.

2008

 Most Admired Retail Company of the year - Future Group.

 Retail Face of the Year - Kishore Biyani.
 Best Retailer Of The Year ( Hypermarket) - Big Bazaar .

Coca-Cola Golden Spoon Awards 2008

 Most Admired Food & Grocery Retail Visionary of the

Year: Kishore Biyani.
 Most Admired Food & Grocery Retailer of the Year –
Supermarkets: Food Bazaar
 Most Admired Food & Grocery Retailer of the Year -
Hypermarkets: Big Bazaar
 Most Admired Retailer of the Year - Dynamic Growth in
 Network Expansion across Food, Beverages & Grocery:
Future Group
 Most Admired Food & Grocery Retailer of the Year -
Consumer's Choice: Big Bazaar

2007

 National Retail Federation Awards International Retailer for the Year 2007
– Pantaloon Retail (India) Ltd.

 World Retail Congress Awards Emerging Market Retailer of the Year 2007
– Pantaloon Retail (India) Ltd.

 Hewitt Best Employers 2007 Best Employers in India (Rank 14th) –

Pantaloon Retail (India) Ltd.

 PC World Indian Website Awards Best Indian Website In The Shopping

Category -Futurebazaar.com

 Reader’s Digest Trusted Brands Platinum Awards Trusted Brands Platinum

Award (Supermarket Category) – Big Bazaar

2006

 Retail Asia Pacific Top 500 Awards Asia Pacific Best of the Best Retailers
– Pantaloon Retail (India) Ltd Best Retailer in India – Pantaloon Retail
(India) Ltd.

 Asia money Awards Best Managed Company in India (Mid-cap) –

Pantaloon retail (India) Ltd.

 Ernst & Young Entrepreneur of the Year Award Ernst & Young
Entrepreneur of the Year (Services) – Kishore Biyani

 CNBC Indian Business Leaders Awards The First Generation Entrepreneur

of the Year – Kishore Biyani
 Images Retail Awards

 Best Value Retail Store – Big Bazaar Best Retail Destination – Big Bazaar
Best Food & Grocery Store – Food Bazaar Retail Face of the Year – K.
Biyani

 Readers’ Digest Awards Platinum Trusted Brand Award -Big Bazaar

 CNBC Awaaz Consumer Awards Most Preferred Large Food & Grocery
Supermarket – Big Bazaar
 Reid & Taylor Awards for Retail Excellence Retail Entrepreneur of the
Year – Kishore Biyani
2005
Images Retail Awards 2005

 PRIL- Most Admired Retailer of the Year.

 Food Bazaar- Retailer of the Year (Food and Grocery).

 Big Bazaar-Retailer of the Year (Value Retailing).
 Central-Retail Launch of the Year.

Voted by Business Today magazine as one of the

 Top 20 Companies in India to watch in 2005.

 India’s most investor-friendly companies in the top 75.
 India’s Biggest wealth creators in the top 100.

DAKS London

 PRIL- Brand Builder of the Year.

2004
Images Retail Awards 2004

 PRIL- Most Admired Retailer of the Year.

 Food Bazaar- Retailer of the Year (Food and Grocery).
 Big Bazaar-Retailer of the Year (Value Retailing).
 Central-Retail Launch of the Year.
Reid & Taylor and DLF Awards

 PRIL - Retailer of the year.

2003
Indian Express Award

 PRIL –Marketing Excellence and Excellence in Brand Building.

Hierarchy of Pantaloon (Future Group)

Mr. Kishore Biyani, Managing Director

Mr. Gopikishan Biyani, Whole time Director

Mr. Rakesh Biyani, Whole time Director

Mr. Ved Prakash Arya, Director

Mr. Shailesh Haribhakti, Independent Director

Mr. S Doreswamy, Independent Director

Dr. D O Koshy, Independent Director

Ms. Anju Poddar, Independent Director

Ms. Bala Deshpande, Independent Director

Mr. Anil Harish, Independent Director

 Board of Directors

Mr. Kishore Biyani, Managing Director

Kishore Biyani is the Managing Director of Pantaloon Retail (India) Limited and the
Group Chief Executive Officer of Future Group.

Mr. Gopikishan Biyani, Whole time Director

Gopikishan Biyani is a commerce graduate and has more than twenty years of
experience in the textile business.

Mr. Rakesh Biyani, Whole time Director

Rakesh Biyani is a commerce graduate and has been actively involved in category
management; retail stores operations, IT and exports. He has been instrumental in the
implementation of the various new retail formats.

Mr. Vijay Kumar Chopra, Independent Director

V.K.Chopra is a fellow member of The Institute of Chartered Accountants of India

(ICAI) by profession and is a Certified Associate of Indian Institute of Bankers
(CAIIB). His banking career spans over 31 years and he has served senior
management positions in Central Bank of India, Oriental Bank of Commerce, SIDBI,
Corporation Bank and SEBI.

Mr. Shailesh Haribhakti, Independent Director

Shri Shailesh Haribhakti, is a Chartered Accountant, Cost Accountant, and a

Certified Internal Auditor. He is the Deputy Managing Partner of Haribhakti & Co.,
Chartered Accountants and past president of Indian merchant Chambers. He is on the
Board of several Public Limited Companies, including Indian Petrochemicals
Corporation Ltd., Ambuja Cement Eastern Ltd. etc. He is on the Board of Company
since June 1, 1999.
 Mr. S Doreswamy, Independent Director

S. Doreswamy, is a former Chairman and Managing Director of Central Bank of

India and serves on the board of DSP Merrill Lynch Trustee Co and Ceat Limited
among others.

Dr. D O Koshy, Independent Director

D. O. Koshy holds a doctorate from IIT, Delhi and is the Director of National
Institute of Design (NID), Ahmedabad. He has over 24 years of rich experience in
the textiles and garment industry and was instrumental in the setting up of NIFT
centres in Delhi, Chennai and Bangalore. He is a renowned consultant specializing in
international marketing and apparel retail management.

Ms. Bala Deshpande, Independent Director

Bala Deshpande is Independent Director, Pantaloon Retail (India) Ltd. and also
serves on the boards of Deccan Aviation, Nagarjuna Construction, Welspun India
and Indus League Clothing Ltd, among others.

Mr. Anil Harish, Independent Director

Anil Harish is the partner of DM Harish & Co. Associates & Solicitors and an LLM
from University of Miami. He also serves on the board of Mahindra Gesco, Unitech,
IndusInd Bank and Hinduja TMT, among others.

Future group major format and its CEO’S

Rakesh Biyani CEO – Retail
Anshuman
CEO - Value Fashion
Singh
Damodar Mall CEO - Incubation & Innovation
Hans Udeshi CEO - General Merchandising
Hemchandra
CEO - Home Solutions Retail (India) Ltd.
Javeri
Kailash Bhatia CEO - Integrated Merchandising Group
Madhumati
CEO - Services
Lele
Sadashiv
CEO - Big Bazaar
Nayak
Sadashiv
CEO - Food Bazaar
Nayak
Sanjeev
CEO – Pantaloons
Aggarwal
Vishnu Prasad CEO - Central & Brand Factory
Kruben
President- Operations (Value Retailing)
Moodliar
Mayur
Head - Operations (North Zone)
Toshniwal
Rajesh Joshi Head - Operations (West Zone)
Rohit Malhotra Head - Operations (South Zone)
Sandeep
Head - Operations (East Zone)
Marwaha
Sanjay Jog Head - Human Resources
Ushir Bhatt Executive Board Member
Atul Takle Head - Corporate Communications
Prashant Desai Head - Group IR & New Ventures (PE)
Vinay Shroff Head - Supply Chain Management
 BIG BAZAAR PROFILE
Big Bazaar-A paradigm shift to the Modern Retail Bazaar

Big Bazaar PRIL’s Hypermarket format that truly heighten up the expectation of value
conscious Indian customer to a new level ever before, it’s Head quarter in Jogeshwari,
Mumbai. It has changed the customer’s perception to that extent that they have already
started to realize that Big Bazaar can provide real value for their money. The first store
opened in Kolkata in 2001 at VIP and was followed by stores in Hyderabad and
Bangalore in short span of 22 days. These stores contributed over Rs.43 crores to the
company’s business and over Rs. 2.89 crores to the profit in first year itself. With giving
actual value of the money big bazaar fully came true on the expectation of the Indian
common man. Actually big bazaar targets lower middle class customer so by seeing
Indian economic prospective it is very popular among the its target market. At this time
Mahindra shing dhoni, Asain is a brand ambassador of big bazaar. • Its tagline is “Isse
sasta aur accha kahin nahin” First Food Bazaar format was added as Shop- In-Shop
within Big Bazaar in the year 2002 • Big Bazaar and Food Bazaar -blend the look, feel
and touch of Indian bazaars with modern retail concepts of choice, convenience and
quality. By observing the customer big bazaar announce Wednesday as a cheapest day
of the week .with all this popularity of big bazaar is touching a land mark every and
because of this within a span of eight year the total no. of store has gone up to 113.
Mainly big bazaar has been established at busy street and it has been designed in such a
manner so that may look crowded.
 SWOT ANALYSIS OF BIG BAZAAR

STRENGTH

• High brand equity in evolving retail markets.

• State of art infrastructure of the big bazaar outlets.

• Point of purchase promotions to increase the purchase.

• Variety of stuff under single roof increasing customer, time and available choices.

• Every day low price.

WEEKNESS

• Unable to meet store opening target.

• Falling revenue per square fit.

OPPORTUNITY

• Organised retails are just 4.15% of total pie of Indian retail market.

• Evolving customer preferences in recent years

• Targeting Area more prone to.

• Economic condition development.

• Store experience improvements.

THREAT

• Competitors, Big global players are planning to foray into the market.
• Unorganized retail market of India.

• Government policies are not defined in emerging market like India.

Store profile

This store is situated under the Netaji subhash palace, metro station which is near
wazirpur. But just not how it sounds, size-wise. Yeah. This place is a humongous
building, and one only fails to wonder how the interior was managed to put in so
many sections PLUS a food mart inside it.
Loads of sections, Kids', women's, men’s, personal care, home appliances,
furniture, sports etc.

The Food Bazaar is on the first floor. As for the prices, they're pretty reasonable.
Its the shop around the corner. The services of the helpers are neat, and the
managing staff is helpful.
They took immediate action against my complaint of one of the irresponsible
counter people.
 Actually this store looks so specious from inside. It contains near about 150
employees. Here SM, ASM main motive to focus on customer satisfaction and
work according to SOP.

WORK PROCESS ON STOCK RECEIVING POINT

Doing project on shrinkage I worked on stock receiving point in big bazaar. Because this
is the area where chance of shrinkage is more. Any mistake can lead high amount of
shrinkage. There are many process has been followed on stock receiving point while
inwarding and outwarding the merchandise, so with this view I would explain all the
process underneath related to the work which occurs at stock receiving point.
Inwarding of Big Bazaar Merchandise
Process examines the methodology of inwarding merchandise in big bazaar.
 Transfer of merchandise undertaken by delivery centre to the store.
 Merchandise delivered by vendors directly to stores.
 Merchandise belonging to SIS for entering/exiting the store.

Receipt of goods by the store warehouse for transfers effected by PRIL warehouse/
delivery centers.
Basic principle governing the process.
Goods are received according to the stock transfer note issued by warehouse..
They are inwarded by:-
SAP enabled stores:- By invoking the handling unit number and undertaking a global
count of items sent.
CNon-SAP enabled stores:- By entering each items in the system and inwarding.

Receipt of goods at the store warehouse and security checking procedures.

 Delivery vehicle arrives at the store warehouse or stock receiving point of store.
 Security personnel to receive the supporting documents (like STN, gate pass) and
 Hand over the same to SCM personnel undertaking the inwarding.
 Document set is checked by SCM to ensure it contains a stock transfer note in
duplicate and outward gate pass issued by the dispatching warehouse.
NOTE:- Proceed with inwarding process, only if the relevant documentation is in order.
If any of the above documents are missing the staff should inform the SCM manager.
SCM manager to examine the case and try to solve the issue by getting in touch with
Delivery centre. In no circumstances, the merchandise should be inwarded, in variance to
the above.
 SCM in charge to confirm from the respective DM/ADM on the stocks received
from warehouse and obtain his signature on STN.
 Security personnel to check the vehicle to ensure the seal on the cargo area.
Note:- If seal is tampered with security personnel should bring it to the attention of the
store warehouse/logistic in-charge to make a note of the same on the STN and also
officially bring it to the notice of the manager of the dispatching warehouse. No onward
seal to be applied to vehicle in case if the vehicle is going to a second location for
delivery as the merchandise has already been exposed.

 Unloading of merchandise and recording of the same in security register.

 An H.U no.- Handling unit no. which is a unique no. is pasted on each carton.
 During unloading, the inwarding staff should mark off each H.U no. on the STN.
 Independently, the security personnel to maintain a count of the no. of cartons
being unloaded.
 When all cartons are unloaded, the inwarding staffs to check the STN and ensure
all carton marked for delivery for the store have received. The no. of cartons for
delivery to the store (as indicated in the STN) is cross checked with the count
maintained by the security personnel while unloading.

In case of a difference (i.e. shortage/ Damage/ Excess in shipments) in shipment.

Security personnel to record the inwards in the store inwards register. Details of GRN are
left blank at this moment and will be filled in once the goods are inwarded into the
system.
Security personnel to stamp the two copies of STN with Inward received stamp,
mentioning the inward number (according to their register), number of cartons unloaded
and date. The security personnel should retain the original set of documents and handover
the complete set to SCM personnel who in turn will hand over the duplicate copy of STN
to the delivery vehicle staff verifying both the copies.

Re-sealing the vehicle for its onward journey

Deliveries in a lot of cases go to multiple locations. Hence once unloading at location one
is complete; security personnel from location one is to seal the vehicle again with paper
seals. A stamp of the store and signature of security personnel to be recorded on the seal.

Inwarding of consignment
 The unloaded cartons to be brought to the store. The STN governing this
consignment is to be invoked in the SAP system.
 Each carton’s H.U. no. is displayed by the system. On selecting particular H.U.
nos. the contents of the carton are displayed by the system. It is very critical that
warehouse staff opens all cartons and undertake a count the items contained in
each carton. This count should tally with the number of pieces displayed by the
system.
Note:- No carton should be inwarded without counting.
 Once inwarding is complete and saved, the system generates a goods receipt note
(GRN) confirming the items which were received. The GRN is printed and
attached to the set of documents pertaining to this consignment.
 The details of STN, GRN and actual quantity received to be recorded in the
inwards register.
 The warehouse inwards register to be handed over to the security personnel
everyday to enable him to record the GRN no. against the STN entry in their
security register.

 After which both registers are forwarded to the SM/ASM for his verification and
signature ensure 100% GRN at the end of the day.
 The entire set of documents is forwarded by the warehouse staff of Zonal/store
(wherever it is applicable) accounts department for effecting payment. A record of
all the documents sent to accounts to be maintained in register at the store
warehouse.

Sample erroneous consignments for testing the system

During every quarter, consignments will be sent which have a shortage of items. This is
being done to check whether stores are able to detect the shortage while undertaking the
inwarding process. These checks will form part of the audit process used for reviewing
the store’s operational performance.
Scanning of items in REM system
Currently the stores point of sale system is running on the REM platform. Hence a check
needs to be performed on the items being inwarded to see if they are recognized by the
REM system. Thus one SKU per carton received the REM system. If the items exist in
the REM system they are in order and can be shifted to the sales floor.
Note: Any product not identified on REM is NOT to be put on the sales floor. The
Article nos. of these items to be sent to the PRIL head office which in turn will
Send idocs for these articles to the stores. Once these idocs are received and
Loaded in the store REM system these items are ready to be placed on the store
floor for selling.

Handling Shortages/Damages/Excess in shipments

During the Inwarding process following types of situations may occur:
1. Shortage/damage received during unloading of the merchandise.
2. Shortage encountered within sealed boxes/ H.U.Nos. )
3. Excess merchandise received

Shortage/damage received during unloading of the merchandise

In case of in-transit shortage/damage, Store Warehouse Manager to identify the same.
a. He must clearly mention the H.U No. & short/damaged qty. for the
Short/damaged boxes on both the copies of delivery documents (i.e. STN /Tax
Invoice and gate pass).
b. Transporter’s signature to be taken on both the copies of delivery documents
Mentioned above. Duplicate copy to be handed over to the transporter while
Original copy to be retained at store.
c. He must then do the GRN for actual quantity received.
d. Now value of short/damaged stock to be checked,
If the value is greater than Rs 15,000:-
GRN for the short/damaged stocks to be done separately.
e. If Value of the short/damaged stocks is less than or equal to Rs 15,000:- GRN for short
or damage stock should be done with reason code.
As soon as debit entry is booked in SAP, an auto mail in
this regard will go to Supplying Site Warehouse Manager for approval.
If the request is approved, Store Warehouse Manager will get an auto mail and
accordingly he must ‘Post’ the debit note document in SAP.As soon as debit note
document is posted in SAP, an auto mail for the same will go to the transporter. In case
the request is rejected, Store Warehouse Manager to find the reason of rejection and
accordingly take corrective action. In case the issue remains unresolved beyond 48 hrs. It
will be auto escalated to Zonal Business Manager for final resolution.

Shortage encountered within sealed boxes/ H.U.Nos.

In case shortage is identified within the sealed boxes,
a. SCM Manager to do the GRN of the actual quantity received
b. GRN for the short quantity to be made separately.
Note: - Hit squad can visit the store anytime to ensure that there are no boxes
misplaced at the store.
c. Transfer posting document for the shortage quantity must be created in SAP
within 48 hrs of corresponding GRN Posting. It is mandatory to mention
Delivery No. & GRN No. while Transfer Posting.
d. As soon as this is done, an auto mail will go to Supplying Site Warehouse
Manager for approval.
e. If the request is approved, SCM Manager will get an auto mail
regarding the same and accordingly he must ‘post’ the document (i.e. Transfer
Posting document) in SAP.
f. In case the request is rejected, SCM Manager to find the reason of
rejection and accordingly take corrective action.
g. In case the issue remains unresolved beyond 48 hrs. It must be escalated to the
respective Zonal Business Manager and the Commercial Head for final resolution.
h. In case any shortage is identified at a later stage e.g. at the shop floor, the DM
of the respective section must certify the shortage. He must then inform the SCM Manager
& the SM about the same immediately.

Excess Merchandise received

On receiving excess items, SCM Manager to keep these items aside. These items are not
to be inwarded .He must inform the dispatching site of excess delivery. The excess items
to be sent back to the dispatching warehouse separately by sealing the truck with returned
goods.

Receipt of Goods by the Store warehouse for deliveries affected by

vendors directly to the store
Basic Principle governing the process:
 Goods are received strictly as per the P.O. issued.
 The consignment is inwarded by entering each SKU in the system.
 Arrival of goods at the store warehouse and document verification.
 On arrival at the store warehouse the vendor informs the security personnel.
 If a queue of vendors exists, security personnel to issue the vendor a token
number. On his turn, arriving security personnel to call the vendor and verify
 The documents pertaining to the consignment.
Document set is checked for the following: -
A signed P.O. which has not expired
Invoice of the supplier
Delivery Challan in duplicate

NOTE:- If any of the above documentation is not in order security personnel to notify the
store warehouse staff. Who in turn should try and rectify the problem. However, in no
case are they to deviate from the below mentioned process of Inwarding.
 Security staff to supervise unloading of the consignment into the store Warehouse
and maintain a count of the number of cartons unloaded.
 Warehouse personnel to ensure that the items are bar-coded by undertaking a
sample check.
 Security staff to record the inwards in their Security Registers.
 Warehouse staff to open the cartons and do a global count of the items received to
confirm that the quantity received is in order.
NOTE:- Any shortages are to be brought to the notice of the vendor’s delivery personnel
and noted on the spot on the delivery challan and invoice.
 Security staff to stamp the suppliers delivery challan with the inwards received
stamp. The store should get stamps made with the following fields:
Store Name
P.O. No.
Nos. of carton & pieces received
Received date
 One copy of delivery challan to be handed over to vendor while the set of
documents consisting of P.O., suppliers invoice, original delivery challan to
be retained by the security staff and handed over to the store warehouse personnel.

Inwarding of the consignment

SCM staff to invoke the P.O. for that consignment on the SAP system. SCM staff to check
the consignment and ensure goods delivered are as specified in the P.O. Each SKU to be
checked against what has been ordered in the P.O. with respect to item description,
quality, quantity, condition of the product and price of the item. If any variance in quality
is noticed, the particular item to be kept aside and not inwarded. The supplier is notified of
the variance and asked to pick it up within 15 days. After each item has been checked the
goods inwarded can be saved and the system generates a GRN. A printout of the GRN
needs to be taken and attached with the set of documents pertaining to the consignment.
The consignment is to be recorded in the Inward Register maintained by the in store SCM
personnel.
Everyday the inwards register is handed to the security personnel to record the GRN
number in the security register against the particular consignment.
The entire set of documents is forwarded by the SCM staff to the accounts department for
effecting payment. A record of each set of documents passed onto accounts is to be
maintained in a register at the store.

Inwarding of SIS merchandise

Basic Principle governing the process:
 SIS merchandise is the responsibility of the SIS vendor.
 This inventory is neither inwarded nor outwarded in the PRIL SAP system.
 However, a check and record is to be maintained on the movement of goods by the
security personnel.
 Inwarding of SIS merchandise and recording of the same.
 On arrival of SIS merchandise the security personnel is notified of the same.
 Security staffs to examine the merchandise to ensure the items pertain to what the
particular vendor is dealing in, take a count of the quantity being inwarded and
allow it to enter the store after verification from the SCM manager.
 The inward is to be recorded in the SIS Inward Register where the vendor
 Details are captured; merchandise description and quantity are noted.

Outwarding of Big Bazaar Merchandise

Basic Principle governing the process:
 For items to be outwarded, a forward STO needs to be created by the front end
category team (FEC) and sent to the store.
 At the store, each item is to be entered against this forward STO and outwarded
from the system.
 Approval of items to be outwarded. It is of utmost important that, before
outwarding, permission to be sought from the store manager, zonal supply chain
team and the respective category team.

Preparation of the forward STO

After taking proper approval as mentioned above, Store Warehouse Manager to prepare a
list of all the items to be outwarded in an excel sheet and send it to the FEC team. FEC
team to create a forward STO for the same and send the STO details back to the store.
Store SCM Manager to invoke STO No. in the SAP. Scanning and Outwarding of items to
PRIL Warehouse/Delivery Centre.
The items to be outwarded are collected, checked against the underlying STO and packed
for dispatch.
The outwarded items are saved as an STN, of which three copies are printed.
Warehouse personnel to supervise loading onto the delivery vehicle according to the STN.
The security personnel to simultaneously maintain a count of the cartons being loaded on
the vehicle and tally the same with the number of cartons as per the GRN.
Security personnel to affix a seal containing store’s stamp & security’s signature on the
delivery vehicle.
Warehouse personnel to record the STN details, merchandise details and quantity in their
Outward Register.
Security personnel to record the outward in their Security Inward Outward Register and
create a gate pass for the consignment.
The STN and gate pass are stamped with an outward stamp by security.
The outward number according to the security register, number of cartons and date are to
be recorded on the stamp.
Two copies of the STN and the gate pass are to be handed over to the delivery vehicle
staff.
The other copy of the STN and gate pass is handed back to the warehouse personnel for
filing of the same.
When the consignment reaches the warehouse/D.C., the respective personnel to
acknowledge the receipt of the goods on one copy of the STN, which needs to be then sent
back to the dispatching store for their records

Outwarding of goods directly to vendor

 Outwarding of goods to vendors can take place directly without having to create a
base P.O.
 The items to be out warded are entered in the system and 3 copies of an Outward
Goods Receipt Note are prepared.
 When the vendor arrives, the merchandise is handed over to the vendor. Security
personnel to maintain a count of the number of cartons being loaded on the
vendor’s vehicle. This count is tallied with the GRN to ensure that no extra
merchandise gets outwarded.
 The vendor’s delivery personnel acknowledge receipt of the items on the GRN.
 Warehouse personnel to record the Outward GRN, merchandise details and
quantity in their Outward Register.
  Security personnel to record the outward in their Security Register. A gate pass is
generated to enable the merchandise to exit the store premises.
 Security personnel to put an outward stamp on the GRN and gate pass. On the
outward stamp, the outward number (according to the security register), number of
cartons and date to be recorded.
 Security personnel to handover one copy of the GRN and gate pass to the vendor’s
delivery personnel and the other copy to the warehouse personnel.
 Warehouse personnel in turn to file one GRN for records and the other set to be
passed onto accounts for recording.
 Papers forwarded to accounts are to be recorded in a register maintained for this
purpose by the store commercial.

Outwarding of SIS merchandise

 Merchandise to be outwarded is checked by the security personnel to ensure items
not belonging to the vendor are NOT taken out of the store.
 If all items are in order security personnel to take a count of the items being
outwarded and allow it to exit the store after verification by the store manager.
 A record is made in the Outward Register capturing the vendor details,
consignment details and quantity being outwarded.

Inter-store Stock Transfers

Inter Store Stock Transfer refers to transferring of goods from one store to another within
the limits. The reasons for inter stock transfer could be:
 Fluctuating customer demand
 Category initiated – for newly open stores.
The steps involved in Inter Store Stock Transfer are as follow:
 Having identified the no of merchandise required for particular category, it is the
duty Of DM to send the requisition of required merchandise to zonal front end
category.

 Front End Category then checks the status of all the stores within the octroi limits
and raises the Stock Transfer Order (STO) against sent requisition.

Stock Transfer Order:

It is a document which is raised by the zonal front end category for transferring of goods
from one place to another. STO is raised and sent to the store which will transfer goods to
receiving store by the front end category .This document gives information about all
merchandise which needs to be transferred to receiving store. For example: article
number, quantity, store name (where goods need to be transferred) etc.
 Front End Category then sends the 10 digit STO number by mail to the sending
store.
 Having received the STO number from Front End Category, particular category’s
 DM accesses the STO on SAP for full details.
 On the basis of STO raised by Front End Category, DM sends the required number
of merchandise to the store warehouse. Store warehouse makes the physical count
of the goods and scans the each merchandise in the system. Packing of goods is
done and STN (Stock Transfer Note) is generated by the store warehouse.

Stock Transfer Note:

It is a document which is raised by the sending store to receiving store. This document
gives information about all merchandise which is getting transferred to receiving store.
For example: article number, quantity, store name (where goods need tobetransferred)
etc.
 The 3 copies of STN are issued:
One copy stays with the sending store
One copy for receiving store
One copy is an acknowledgement for the sending store
 Against the STN, a Gate Pass must be issued by the sending store.
 Store copy of STN and gate pass must be signed by the transporter for the number
of merchandise he will be delivering to the other store.
 Records for the gate pass must be maintained by the store security personnel.
 An entry must be made in the Outward Register, which is maintained at the
Security.

Mobiles – Stock Receipt and Sales Procedure

The following process is to be followed for Mobiles – Stock Receipt and Sales Procedure
 The GRN/STN must be prepared before products are taken to the sales floor to
avoid any stock discrepancies at a later stage.
 The STO and STN updating must be done before the stock is taken to the
department.
 While Inwarding, each and every product must be physically counted & checked
against the PO. Also check whether the seal is intact of all boxes. If not the same to
be intimated to the warehouse in-charge/ store manager. The stock must then be
kept in a pre-designated safe zone.
 It is important that the price points of the inwarded stock is checked (PO Vs STN)
due to frequent price changes.
 .
 The store logistics person must maintain a Stock Handover Register which clearly
states the stock handed over to the respective DM/ASM.
 The DM/ASM must in turn cross-check the stock received against the GRN.
 The stock received must be kept under controlled lock and key.
 A duplicate copy of the STN must be documented by the respective DM for audit
purposes.
 SM must ensure that there is a secured lock-up area in the store back-office where
the majority mobile stock will be kept. Only a part of the stock, i.e. Model stock
must be kept at the mobile counter under lock and key.
 The final accountability of the stock remains with the SM at all times.
 To avoid negative inventory in the system, the stocks must be inwarded under the
same article code as per the PO. This will avoid duplication of codes, negative
inventory and stock miss-match.
 The seal of the boxes should not be tampered with. The seal must be opened only
after the handset is sold in the presence of the customer. In an exceptional case, if
the store has to open the seal, due permission must be taken from the category.
 In case of boxes without seal, it is the responsibility of the DM/ASM to obtain the
necessary seal from the concerned category person within 3 days of opening the
box.

Registers maintained at stock receiving points.

1. Security inwarding and outwarding register.
2. Inwarding register.
3. Outwarding register.
4. SIS register.
5. Stock handover register.
6. Vendor returns register.
7. Non sellable inward register.
8. Non sellable outward register.
9. Outward gate pass.
SHRINKAGE

Shrinkage is the reduction of inventory from the actual inventory. It is caused by

shoplifting by employees or customers, by wrong inwarding, by merchandise being
misplaced or damaged, or by poor bookkeeping, by vendor errors or mistakes and
inaccurate records.
Example of employee mistakes are failing to ring up an item when it’s sold and
miscounting when it’s received or when physical inventories are taken. Inventory
shrinkage due to vendor mistakes arises when vendor shipment contains less than the
amount indicated on the packing slip.
Although shoplifting receives most of the publicity. Employee theft account for more
inventory loss. A recent survey attributes 46 percent of inventory shrinkage to employee
theft, 31 percent to shoplifting, 17 percent to mistakes and inaccurate records, and 6
percent to vendor errors.

Calculating shrinkage

Shrinkage is the difference between the recorded value of inventory based on

merchandise brought and received and the value of the actual inventory in stores and
distribution centers divided by retail sales during the period.

Shrinkage = Inventory on record – Actual inventory * 100

Sales
For example, If accounting records indicate inventory should be1,500,000 the actual
count of the inventory reveals 1,236,000, and sales were 4,225,000 , the shrinkage is
= 1,500,000 – 1,236,000 * 100
4,225,000
= 6.5%
Reducing shrinkage is an important store management issue . Retailer’s annual loss from
shrinkage is between 1 and 5 percent of sales. Every rupees of inventory shrinkage
translate into rupees of lost profit.
 Causes of shrinkage
1. Employee Theft

According to the National Retail Security Survey, the number one source of shrinkage
for a retail business is internal theft. Some of the types of employee theft include discount
abuse, refund abuse and even credit card abuse. Unfortunately, this is one loss prevention
area that generally doesn't receive as much monitoring as customer theft. Employee
Theft from a retail store is a term that is used when an employee steals merchandise,
food, cash, or supplies while on the job. However, in the eyes of the law, employee theft
is just theft…the elements of the crime are identical. To commit theft, the employee must
“intend” to permanently deprive their employer of the value of the item stolen.

Employee theft can occur just like shoplifting by concealing merchandise in a purse,
pocket, or bag and removing it from the store. It can also occur by stealing cash, allowing
others to steal merchandise, eating food, and by refund, credit card, or check fraud.
Employee theft can sometimes be charged as embezzlement due to the trusted fiduciary
status of the employee. All of these methods lead to loss of inventory (shrinkage) and/or
profit for the merchant.

Employee theft is an insidious crime because the merchant is paying a wage and benefits
to the thief on top of paying for the cost of their dishonestly. Studies have shown that
employees can do a lot more damage than shoplifters because they are trusted and have
an insider’s knowledge of store security measures.

Employee Theft Profile

There is no real physical profile for a dishonest employee. Dishonest employees come in
all shapes, sizes, ages, sexes, ethic backgrounds, religions, levels of education, and
economic status. You simply cannot accurately determine who is likely to steal based on
their demographic status alone. However, an employer can make reasonable assessments
based on their conduct, integrity, and judgment. A person’s past conduct, integrity, and
judgment often provides the best indication of their future behavior.

Retail store employees have a constant opportunity to steal cash or merchandise…all they
need is the desire and sufficient motivation to do so. What keeps most employees honest
is moral character, loyalty, respect for the law and their employer, and the desire to be
viewed as trustworthy. Studies support this by proving that shrinkage is significantly less
in stores with reduced employee turnover and fewer part-time workers.

For others, the only barrier to dishonesty is the fear of getting caught. The employee thief
risks getting fired, being arrested, jailed, and paying restitution. The criminal record and
bad job reference will have a compounding effect that will follow them for years.
Merchants must not be sending a clear message to their employees because most
employee thieves that I have encountered never thought they would be caught.

Cost of Employee Theft

According to the University of Florida 2005 National Retail Security Survey, employee
theft was estimated to be responsible for 47% of store inventory shrinkage. That
represents an estimated employee theft price tag of about 17.6-billion dollars per year.
This astounding figure makes employee dishonesty the greatest single threat to
profitability at the store level.

The 2003 study found the average dollar loss per employee theft case to be $1,762.00
compared to $265.40 for the average shoplifting incident. Despite these facts, most
retailers mistakenly focus their loss prevention budgets on shoplifting.

Loss Prevention

Preventing employee theft is a constant challenge for retailers. The industry knows that it
must put systems in place to prevent or deter internal theft. To be effective, loss
prevention systems must be designed to reduce the opportunity, desire, and motivation
for employee theft.

One way of reducing employee theft motivation is to show a deep commitment to prevent
losses at every level and a desire to prosecute thieves. This sends a message to employees
that shoplifting losses cannot be used as a excuse for shrinkage and that all thieves will be
prosecuted.

Basic loss prevention steps involve good procedures for hiring, training, and supervision
of employees and managers. Procedures that are clearly defined, articulated, and fully
implemented will reduce the opportunity, desire, and motivation for employees to steal. I
will talk about each of these concepts in future articles.

2. Shoplifting

Coming in at a close second is shoplifting. Customer theft occurs through concealment,

altering or swapping price tags, or transfer from one container to another. While
shoplifting remains a smaller inventory loss source than employee theft, stealing by
shoppers still costs retailers about $10 billion annually. Shoplifting is a common crime
that occurs when someone steals merchandise offered for sale from a retail store.

To be convicted of shoplifting, one must "intend" to permanently deprive the merchant of

the value of the merchandise. Merchants are often confused about the procedures for
lawfully detaining someone suspected of theft from their store. What are the rights of the
merchant? What are the rights of the customer? How much force can be used to detain
someone who has stolen merchandise?

3. Administrative Error
Administrative and paperwork errors make up approximately 15% of shrinkage. Simple
pricing mistakes due to markups or markdowns can cost retailers quite a bit.

4. Vendor Fraud
The smallest percentage of shrink is vendor fraud. Retailers report vendor fraud occurs
most when outside vendors send delivery of the material into the store.

5. Cashier error
Cashier error may also lead to shrinkage. For example while wrapping the merchandise
cashier does do billing of merchandise.. Because, in hurry he forget one or two
merchandise.

6. Inwarding error
During inwarding and outwarding the merchandise a proper process has been followed.
In case, if wrong process followed then it will also cause the shrinkage of merchandise.
7. Lack of maintenance
Some merchandise get damage because of improper inventory management and poor
maintenance of merchandise.

8. Excess inventory
If the inventory is excess in comparison to the efficiency of the floor and warehouse
inventory it would lead mismanagement of merchandise and can cause shrinkage and
Damage of merchandise.

RETAIL LOSS PREVENTION

Retail loss prevention is a profession that is responsible for reducing inventory losses
inside retail stores. Loss prevention professionals manage in-store security programs
that focus on reducing inventory losses due to employee theft, shoplifting, fraud, vendor
theft, and accounting errors. Like others in the security industry, retail loss prevention
professionals must interact with store personnel and store customers when dishonestly
or carelessness occurs. As you can imagine, accusing someone of dishonestly or
carelessness is not a small matter and must be done with the utmost care and
professionalism.

Loss prevention workers work closely with both retail security officers and retail buyers.
They may also work with retail clerks and cashiers and retail merchandisers. In short, the
loss prevention employee is in charge of exactly what the job title says - loss prevention.
However, it isn't as simple as making sure children don't break glass items.

Loss prevention starts with security. A loss prevention officer will likely talk to new
employees or do training a few times every year in order to prevent shoplifting. Stores
may miss many shoplifters, but in general, they can tell at the end of the week how many
items were stolen. At least, they can with a good loss prevention officer. It will be his or
her job to keep track on inventory theft.

In addition to teaching employees way to spot shoplifters, a loss prevention officer might
go undercover a few days a week to spot potential shoplifters. This is especially common
in stores where shoplifting happens often. The loss prevention officer will also make
recommendations about security cameras and may head up the team of security officers
hired by the store.
Loss prevention is about more than theft, though. These employees are also responsible
for finding and righting paperwork errors that could result in the company losing money.
For example, he or she may look for the error that caused the store to order 10,000 shirts
instead of 1,000. When there is an excess of any kind of product, chances are that the
product will have to be put on sale, which means that the company will make little or no
profit.

Another job duty of the loss prevention officer is to look at ways the company can cut
costs. This often makes the loss prevention officer the "bad guy," since he or she makes
recommendations on whom to let go because there isn't enough work. Cutting costs can
also be done through cutting employee hours, replacing employees that are not motivated,
and looking for alternative solutions to high expenses.

Some stores hire a loss prevention officer to work purely for them. However, what is
more common is that there will be a loss prevention officer for a whole corporation or a
whole region. This employee will travel from store to store. For stores that are not part of
a larger corporation, loss prevention consultants are available. Pay rate will vary based on
a number of factors, with consultants usually making more. In this field, however,
education and experience are pluses.

How to Use Customer Service to Prevent Shoplifting

Good store management can be an effective tool against shoplifting. Retailers should also
use store layout, adequate inventory controls and follow common security practices to
combat shoplifting. If your store has been designed to reduce shoplifting, another form of
prevention is to use customer service techniques to take away opportunities to steal
product. A standard process of store operation leads good customer service.

1. Staffing: Schedule an adequate number of employees to work at one time.

2. Greetings: Greet every customer that enters the store. This lets the customer know
you are aware of their presence.

3. Be Attentive: Make yourself available to all customers and never leave the store
unattended.

4. Receipts: Give each customer a receipt for every purchase. Require receipts for
refunds for cash. Trash any discarded receipts immediately.
 5. Stay Focused: Don't allow customers to distract the cashier while another person
is being checked out.

6. Bag Check: Implement a policy and procedure for backpacks and bags brought in
by customers.

7. Code 3: If you notice suspicious activities, alert other employees immediately.

Many stores have a security code to alert staff of possible shoplifters.

8. Helping Hand: Approach the suspicious person and ask if he/she is finding
everything okay. Mention that you’ll be nearby should he/she need your help. Make
the shoplifter feel watched.

9. Tag Swap: Cashiers should watch price tags and be on the lookout for price
switching. Ask for a price check if something seems out of place.

10. Hidden Items: Shoe boxes, pocket books, baskets with lids and any other
product easily opened should be inspected by cashiers to be sure it does not contain
other merchandise.

11. Sealed Shut: Every bag should be stapled closed, with the sale receipt
attached.

How to Use Store Design to Reduce Shoplifting

Security issue need to be consider when placing merchandise near store entrance ,
delivery areas and dressing rooms. For example, easily stolen merchandise such as
jewelry and other expensive items should never displayed near an entrance. By reducing
the height of fixture and having open sight lines to entrances and exits, store employee
can see customers in the store and watch for shoplifters while providing better services.
Dressing room entrance should be visible to store employees so they can easily observes
customers entering and exiting with merchandise. The easiest way for retailers to
discourage theft in a store is by taking away opportunities to steal. A little thought into
the store's layout and design can prevent theft before a loss occurs. Here some tips to take
into consideration store design.
 1. Checkout: Design the store lay out so customers must pass the register area and
staff to exit the store. Never leave the register unlocked or unattended. Do not display
merchandise near the store exits.

2. Tidy Up: Keep the store neat and orderly. Full displays and straightened shelves
allow employees to see at a glance if something is missing.

3. View All: Use mirrors to eliminate blind spots in corners that might hide
shoplifters. Maintain adequate lighting in all areas of the store, keep fixtures and
displays low for better visibility.

4. Under Lock and Key: Place small, expensive items in locked cabinets or behind
the counter. Rest rooms and dressing areas should be watched at all times. Keep
dressing rooms locked and limit the number of items taken in by each customer. Use
alarms on unlocked exits and close or block off unused checkout aisles.

5. Signage: Signs and posters reinforcing security messages should be used. Post
anti-shoplifting signs like 'Shoplifters Will Be Prosecuted' in clearly visible locations.

6. Security: Use security equipment such as closed circuit television, security tags
and two-way mirrors. Uniformed security guards are also powerful visual deterrents
to the shoplifter.

Tips:
A well-designed store layout will not eliminate all shoplifting but will help reduce it.
Combine customer service techniques with good store design to combat shoplifting.

How to Identify Shoplifters

Shoplifters can be placed in one of two categories, professional and amateur. While both
groups can be quite skilled at the art of thievery, professional shoplifters steal to make a
living and may use force or intimidation. The non-professional shoplifter may be easier to
spot.
Shoplifter works as professionally, one should never think that all shoplifter are poorly
dressed. To avoid detection professional shoplifter dress in the same manner as customer
patronizing the store. Over 90 percent of all amateur shoplifters arrested have the well
dressed and well maintained and they pay either the cash, check, or credit to purchase the
merchandise they stole.

Shoplifter Methods

Many of these thieves work in groups of two or more to distract the sales staff while they
pilfer. Shoplifters learn to take advantage of busy stores during peak hours or they may
hit at times when employees are less alert, such as opening, closing and shift changes.

Hiding merchandise is the most common method of shoplifting. Items are concealed in
the clothing of the shoplifter, in handbags, strollers, umbrellas or inside purchased
merchandise. Bold shoplifters may grab an item and run out of the store. Other methods
include price label switching, short changing the cashier, phony returns, and so on.

Spot the Shoplifter

Unfortunately, there is no typical profile of a shoplifter. Thieves come in all ages, races
and from various backgrounds. However, there are some signs that should signal a red
flag for retailers. While the following characteristics don't necessarily mean guilt,
retailers should keep a close eye on shoppers who exhibit the following:

• Spends more time watching the cashier or sales clerk than actually shopping.
• Wears bulky, heavy clothing during warm weather or coats when unnecessary.
• Walks with short or unnatural steps, which may indicate that they are concealing
lifted items.
• Takes several items into dressing room and only leaves with one item.
• Seems nervous and possibly picks up random items with no interest.
• Frequently enters store and never makes a purchase.
• Enters dressing room or rest rooms with merchandise and exits with none.
• Large group entering the store at one time, especially juveniles. A member of the
group causes a disturbance to distract sales staff.

Recognizing Return Fraud

Does your return policy allow stolen merchandise to be returned for cash? We certainly
hope not! However, the National Retail Federation's Return Fraud Survey says criminals
often take advantage of retailers with relaxed return policies.
The survey reports that an astonishing 95.2% of retailers have experienced this most
popular form of return fraud in the past year. While many retailers are tightening policies,
some at the expense of customer service, the retail industry will still lose $9.6 billion in
return fraud.

Common Types of Return Fraud

The first step to avoid becoming a victim is to be able to recognize the scam. Some of the
more common types of return fraud are:

• The return of used merchandise

• The return of merchandise using counterfeit receipts

Signs of Return Fraud

Spotting the above types of return fraud may be difficult for some retailers. Other signs
the retail store is being adversely affected by returns are:

• High shrink rate

• Dramatic increase in number of returns
• Return policy not being enforced
• Increasing number of markdowns due to returns.
• When customer doesn’t eager to take a other merchandise in exchange and they
are putting emphasis on returning his/ her money.

Shoplifting Policies and Procedures

It is important to plan policies and procedures for shoplifting early in the business
planning stages. We all hope it will never happen in our store but in the event it does,
retailers and staff should be prepared to handle the shoplifting situation. Take the
following questions into consideration when writing your shoplifting policies and
procedures:

• Is your goal to prosecute or get the merchandise back?

• Does your store have a zero tolerance policy for shoplifting?
• Will you prosecute shoplifters under 18 or over 65?
• Is there a minimum amount before prosecuting?
 • How will you confront and detain the shoplifter?
• What will you do if the shoplifter shows remorse or offers to pay?
• Who is responsible for calling the police?

Consider a shoplifting policy that is fair but firm. If your store chooses not to prosecute
shoplifters, word will get around and your store may become a target. If shoplifters know
your store takes theft seriously and is not afraid to prosecute, many thieves will avoid
stealing from your business.

Stopping a Shoplifter

Store design, customer service techniques and technology go a long way at preventing
shoplifting. Post signs saying that shoplifters will be prosecuted, if that is the store's
position on shoplifting. If you see someone take an item, alert another employee and then
approach the person. Ask "Can I help you?" or "Can I ring that up for you?"

Learn your local and state shoplifting laws. Contact the police station and they should be
able to answer any questions you may have.

Laws vary by location, but most places require that one person must see the shoplifter
take the item, conceal it and exit the store without paying for the merchandise, all while
never taking their eyes off the shoplifter. Only then can that store employee apprehend
the shoplifter without force.

When approaching a suspicious person, try to remain calm and professional. It is possible
that a misunderstanding has taken place and the person is not actually a shoplifter.
Treating the suspect in a polite, discrete yet firm and professional manner will help you
and your store avoid a slander, false arrest, or discrimination lawsuit.

Shoplifting – Probable cause

To establish a solid base for probable cause, and prevent false arrest claims, there are six
universally accepted step that a merchandise should be follow before detaining someone
suspected of shoplifting.
1. You must see the shoplifter approach your merchandise.
 2. You must see the shoplifter select your merchandise.

3. You must see the shoplifter conceal, carry away or convert your merchandise.

4. You must maintain continuous observation the shoplifter.

5. You must see the shoplifter fail to pay for the merchandise.

6. You must approach the shoplifter outside of the store.

Step 1: You must see a shoplifter either when they enter your store or approach a display
and that he/she does not have any merchandise in their hand or that they have not
retrieved a item from their own purse, bag or pocket. This step prevent a common
mistake that occurs when a customer brings an items back to the store for a return and
does not check in at the return desk first. If you detain someone after seeing them replace
their own merchandise into their pocket or bag. You could be subject to a false arrest
claim although it is a seemingly mistake. Many false arrest claims are filed because
retailers missed this important, but basic, first step.

Step2: You must see the shoplifter select the merchandise. Store employees can
misunderstand when they see a customer innocently put an item into their pocket or purse
and not realize that the customer had brought the item into the store with them for
comparison purposes. If you saw the shoplifter remove your merchandise from your
display prior to concealing it, then you have a strong foundation for proof of shoplifting.

Step3: you must see the shoplifter conceal, carry away or covert the merchandise. This
includes concealment in bag, strollers, or on a person. Shoplifting can occur by wearing
articles in plain view once the tags are removed. Shoplifter can occur by conversion like
when consuming food prior to being purchased. Exception is fitting room theft where
observation is impossible. Once inside a fitting room store merchandise be concealed
almost anywhere. The important factor is to know what items go into the fitting room and
what items don’t come out in plain view. Of course, the fitting room must be checked
beforehand to see it it is clear of merchandise and after the suspected theft to see that the
missing items were not simply discarded.

Step 4: You must maintain continuous surveillance of the shoplifter. If your store policy
is to detain and apprehend all shoplifters, then you must adhere strictly to this step.
Experienced shoplifters will try to dump the concealed merchandise, without your
knowledge, if they believe they have been observed.

Step 5:- You must see the shoplifter fail to pay for your merchandise. Typically, a
shoplifter will walk out of your store, past all cash register, without making any attempt
to pay for the concealed merchandise.
Step 6: you must approach the shoplifter outside of the store. Although not technically
necessary, following this step eliminates all possibility that the shoplifter still intends to
pay for the stolen product. There is a safety in numbers and most shoplifters will
cooperate if they believe that fighting or running is futile.

Why Employee Pilfer in store

Not all crooks roam the streets of the nation's cities. Many spend their time in the
manufacturing plants of companies. There, disguised as honest citizens, they pilfer
whatever comes to hand, often tampering with records to cover up their thefts.

To prevent pilferage, an owner-manager must recognize that some employees cannot

be trusted and make all employees aware that he or she is taking steps to thwart
dishonest personnel. Such steps include setting up a system of loss prevention (devices
and procedures), administering the system rigidly, and auditing it often to discourage
dishonest employees who try to bypass the system.

To steal or not to steal? That is the question facing employees in plants. Many
employees answer that question almost unconsciously. They see items lying around
and pick them up for their own use. They slip small hand tools into their pockets. Or
they dip into the bin for a fistful of nuts and bolts or snip off a few feet of wire for a
home repair job.

But not all employees who pilfer are nickel-and-dime thieves. Some are professionals
who carry off thousands of dollars worth of equipment and materials.

Misplaced Trust

One reason for pilferage is misplaced trust. Many owner-managers of small companies
feel close to their employees. Some regard their employees as partners. These owner-
managers trust their people with keys, a safe combination, cash, and records.

Thus, these employees have at hand the tools which a thief or embezzler needs for a
successful crime. Unfortunately, some of the "trusted" employees in many small
businesses are larger partners than their bosses anticipate. Unless you're taking active
steps to prevent loss from in-plant pilferage, some are probably trying to steal your
business, little by little, right from under your nose. Few indeed are the businesses in
which dishonest employees are not busily at work. Usually, these employees are
protected by management's indifference or ineptitude as they steal a little, steal a lot,
but nevertheless, steal first the profit, and then the business itself.

One of the first steps in preventing pilferage is for the owner-manager to examine the
trust he or she puts in employees. Is it blind trust that grew from close friendships? Or
is it trust that is built on an accountability that reduces opportunities for thefts?

A Climate for Dishonesty

In addition to misplacing trust, it is easy for an owner-manager to create an

environment in which dishonesty takes root and thrives. Just relax your accounting and
inventory control procedures. Nothing deters would-be thieves like the knowledge that
inventory is so closely controlled that stolen goods will be missed quickly.

And what about the plant where its common practice for a close relative or two of the
boss to help themselves from the stockroom without signing for the items they take?
Soon such a plant becomes a place where inventory shrinkage soars as employees get
the message that recordkeeping is loose and controls are lax.

In a manufacturing plant, no materials and no finished goods should be taken without a

requisition or a removal record being made. Exceptions? Absolutely none.

Similarly, the owner-manager who does not exercise tight control over invoices,
purchase orders, removals (for example, for tools, materials, and finished goods), and
credits is asking for embezzlement, fraud, and unbridled theft. Crooked office workers
and production and maintenance personnel dream about sloppily kept records and un-
watched inventory. Why make their dreams come true?

One shipping platform employee's dream came true to the tune of $30,000 - the
amount of goods he stole from his company. When caught, he said, "It was so easy, I
really didn't think anyone cared."

Let people know you care. Make them aware of the stress you place on loss-
prevention.

This point must be driven home again and again. And with every restatement of It -
whether by a security check, a change of locks, the testing of alarms, a systems audit, a
notice on the bulletin board - you can be assured that you are influencing that moment
of decision when an employee is faced with the choice-to steal or not to steal.

Haphazard Physical Security

Also high on the list of invitations to theft is haphazard physical security. Owner-
managers who are casual about issuing keys, locking doors, and changing locks are, in
effect, inviting the dishonest employee into the plant or office after work. But
intelligent key control and installation of time locks and alarms are ways of serving
notice to crooked workers to play it straight.

Sometimes profits go out the window - literally. For example, one distributor caught
"trusted" employees lowering TV sets and tape recorders from a third-story warehouse
window to confederates below. Unfortunately they were not caught until they had
milked their boss of thousands of dollars worth of merchandise.

But more often, the industrial thief uses a door rather than a window. And the more
doors a plant has, the more avenues of theft it offers.

The plant that's designed for maximum security will have a minimum number of active
doors and a supervisor or guard, if warranted, stationed near each door. Moreover, a
supervisor should be present when materials or finished goods are being received or
shipped and when trash is being removed. As long as a door stays open, a responsible
employee, a supervisor, or a guard should be there.

Central station alarm systems should be used to protect a plant after hours. Their
purpose is to record door openings and closings and to investigate unexpected
openings. Time locks are also designed to record all openings.

"Breaking-out"

A record of door openings can be important because the dishonest employee is often a
specialist at "breaking out" (hiding and leaving the plant after closing hours). If your
plant is not protected against break-out, you can be hurt badly because this method of
operation allows a thief to work pretty much at his or her own speed.

After-hours thieves put out of commission the alarm system that works beautifully
against break-in. They can often leave by doors equipped with snap-type locks-doors
that do not require keys from the insides. Quickly and easily, they can pass goods
outside and then snap doors closed behind them. Thus, they leave no evidence.

A motion detector, electric eye, or central station alarm will deter such thieves. You
can also discourage break-outs with locks that need keys on both sides, provided that
fire regulations do not prohibit such locks. When goods, materials, or money are
missing and evidence of forced entry is lacking, begin to look immediately for the
inside thief, the dishonest employee.

Audit Control Methods

Loss prevention controls and procedures by themselves are not enough to protect your
assets. Controls and procedures must be audited from time to time or they will break
down. No loss-prevention control is stronger than its audit.

One effective auditing method is to commit deliberate errors. What will your people
do if, for example, you see that more finished goods than the shipping order calls for
reach the platform? Will the shipping clerk return the excess to stock? Will he or she
try to divert it for personal use (perhaps in collusion with a truck driver)? Or will the
clerk simply ship the order without ever knowing that the excess existed?

If the bookkeeper and the accounts receivable clerk are not dependable, alert, and
honest, disaster can result. Check them by withholding an invoice from each of them
and watching to see what they do. Will they miss the invoice? Will they realize that a
missing invoice means lost revenue and call it to your attention?

Unannounced inspections are another excellent method of checking your preventive

procedures. Such inspections are most effective during overtime periods or when the
second or third shift is working. For example, one owner-manager popped up on the
shipping platform after the second shift left. He noticed a loaded truck parked at the
platform and ordered it unloaded. The cartons in the rear were legitimate deliveries,
but he found the front half of the truck crammed with stolen goods. The checker, who
was hired to see that such stealing did not happen, had gone to sleep and let the
accommodating driver load his own truck.

Lack of Influencing Management

You should never underestimate your ability to influence your employees in the
direction of honesty. Your use of good controls, stiff loss-prevention procedures, and
cleverly located physical security devices are powerful reminders to employees that
the boss does indeed care.

But controls and devices can be wasted if the owner-manager fails to set a personal
example of honesty and conscientiousness. A personal example of high integrity by the
boss is the most important step in demonstrating to employees that dishonesty is
intolerable.

Such an example includes following the same loss prevention rules that apply to
employees. For instance, the owner-manager should sign for items he or she takes
from the stockroom just like any other person.

Keep Crooks Off Balance

The crooked employees who are the most successful at their "second trade" are the
ones who test the system and are convinced that they can beat it. They can steal you
blind. With every "score," their confidence increases and along with it their danger to
the company. The best way to stop such crooks is to keep them off balance - keep
them from developing the feeling that they can beat your system.

Here's an example of how one owner-manager keeps crooks off balance. When
inventory shrinkage became a major problem, he made a loss-prevention survey. To
help keep employees honest, he tightened certain existing controls and put in some
new ones. He reduced the number of exits employees could use by half. He scheduled
"unscheduled" locker inspections for the unlikeliest possible moments. Employees
were no longer allowed to take lunch boxes or bags of any kind to their work stations.
Package inspection procedures were tightened.

To date, this owner-manager has caught no thieves. But by simply tightening controls
and adding a number of surprise elements to his loss-prevention maintenance system,
he reduced his inventory loss drastically.

Motive To Play Detective

Dishonest employees, working alone or in collusion with others, can find ways to beat
the system no matter how theft-proof you try to make it. "Smart cookies" can devise
ways to get away with substantial amounts of money, materials, or goods.

Owner-managers who suspect theft should not attempt to turn detective and try to
solve the crimes themselves.

Even the best business owner may botch a criminal investigation because it's an area in
which the average owner is an amateur.

When you suspect a theft, bring the police or a reliable firm of professional security
consultants into the picture without delay. Where dishonest employees are bonded by
insurance companies, ironclad evidence of theft must be uncovered before you can file
a claim with the insurance company to recover your losses. Professional undercover
investigation is among the most effective ways to secure such evidence.

Reducing employee theft

The most effective approach for reducing employee theft and shoplifting is to create a
trusting, supportive work environment. When employee feels they are respected
members of a team, they identify their goals with the retailer’s goals. Stealing from
their employer becomes equivalent to stealing from themselves or their family, and
they go out of their way to prevent others from stealing from the “family”. Thus,
retailer with a highly committed workforce and low turnover typically has low
inventory shrinkage.

Screening prospective employees

Many retailers use paper and pencil honesty tests and make extensive reference checks
to screen out potential employee theft problems.

Using security personnel employees

In addition to uniformed guards, retailer can use uncover shoppers to discourage and
deter employees theft. These uncovered security personnel pose as a shoppers. They
make sure sales people ring up transaction accurately.

Establishing security policies and control systems

To control employee theft, retailers need to adopt policies relating to certain activities
that may facilitate theft. Some of the most prevalent policies are

• Randomly search containers such as trash bins where stolen merchandise can be
stored.
• Require store employees to enter and leave the store through designated
entrances.
• Assign salespeople to specific POS terminal and require all transactions to be
handled through those terminals.
• Restrict employee purchases to working hours.
• Provide customer receipts for all transaction.
• Have all refunds, returns, and discount cosigned by a department or store
 manager.
• Check locks periodically and issue keys to authorized personnel only.
• Have a locker room where all employee handbags, purses, packages, and coats
must be checked.

Rules Can Help Reduce Employee Pilferage

 Employees who are caught stealing will be prosecuted. (Settling for restitution
and an apology is inviting theft to continue.)
 Rotate security guards. (Rotation discourages fraternizing with other employees
who may turn out to be dishonest. Rotation also prevents monotony from
reducing the alertness of guards.)
 Never assign two or more members of the same family to work in the same
area. (You can expect blood to be thicker than company loyalty.)
 Key employees will be kept informed about the activities and findings of the
person who is in charge of security. (Thus weak points in security can be
strengthened without delay.)
 Make a dependable second check of incoming materials to rule out the
possibility of collusive theft between drivers and employees who handle the
receiving:
 No truck shall approach the loading platform until it is ready to load or unload.
 Drivers will not be allowed behind the receiving fence. (Discourage drivers
from taking goods or materials from the platform by the following devices:
heavy-gauge wire fencing between bays, with the mesh too fine to provide a
toehold; closed-circuit television cameras, mounted overhead so as to sweep the
entire platform; and locating the receiving supervisor's desk or office to afford
him or her an unobstructed view of the entire platform.)
 At the loading platform, drivers will not be permitted to load their own trucks,
especially by taking goods from stock.
 Every lunchbox, tool box, bag, or package must be inspected by a supervisor or
guard as employees leave the plant.
 All padlocks must be snapped shut on hasps when not in use to prevent the
switching of locks.
 Keys to padlocks must be controlled. Never leave the key hanging on a nail
near the lock where a crooked worker can "borrow" it and have a duplicate
made while he or she is away from work.
 Trash must not be allowed to accumulate in, or be picked up from, an area near
storage sites of valuable materials or finished goods.
  Inspect disposal locations and rubbish trucks at irregular intervals for the
presence of salable items when you have the slightest reason to suspect
collusion between employees and trash collectors.
 Trash pickups must be supervised. (Companies have been systematically
drained over long periods by alliance between crooked employees and trash
collectors.)
 Control receiving reports and shipping orders (preferably by numbers in
sequence) to prevent duplication of fraudulent payment of invoices and the
padding or destruction of shipping orders.

 Receiving reports must be prepared immediately upon receiving a shipment.

(Delay in making out such reports can be an invitation to theft or, at best, result
in recordkeeping errors.)

Security measures technologies to detect pilfering or shoplifting

There is a lot of safety tag is available in order to prevent pilfering or shoplifter. Big
bazaar use electronic article surveillance (EAS) system associating with hard tag, soft tag,
string tag for detecting pilferage. But I am discussing underneath many system and
method to protect from pilfering and shoplifting.

Electronic Article Surveillance

Electronic Article Surveillance (EAS) is a technology used to identify items as they pass
through a gated area. Typically this identification is used to alert someone of the
unauthorized removal of items from a store, library, or data center.

There are several types of EAS systems. In each case, the EAS tag or label is affixed to
an item. The tag is then deactivated when the item is purchased (or legally borrowed) at
the checkout desk. When the item is moved through the gates (usually at a door to the
premises), the gate is able to sense if the tag is active or deactivated and sound an alarm if
necessary.

EAS systems are used anywhere there is a chance of theft from small items to large. By
placing an EAS tag on an item, it is not necessary to hide the item behind locked doors
and so makes it easier for the consumer to review the product.
Today's EAS source tagging, where the tag is built into the product at the point of
manufacture or packaging, has become commonplace. This makes the labeling of goods
unnecessary, saving time and money at the store.

There are three EAS tag like hard tag, soft tag, string tag is being used by big bazaar to
protect from shoplifting. Mainly hard tag has been put on apparels items string tag being
put on accessories and soft tag being put on food items and books cd’s. EAS is a
promising approach for reducing shrinkage with little effect on shopping behavior.

In Electronic article surveillance systems, special tags are placed on merchandise. When
merchandise is purchased, the tags a deactivated by the POS scanner. If a shoplifter tries
to steal the merchandise, the active tags are sensed when the shoplifter passes a detection
device at the store exit and an alarm is triggered.

EAS tags do not affect shopping behavior because customers do not realize they’re on the
merchandise. Due to the effectiveness of tags in reducing shoplifting, retailers can
increase sales by displaying theft-prone, expensive merchandise openly rather than
behind a counter or in a looked enclosure.
 CCTV CAMERAS

Closed circuit TV cameras can be monitored from a central location, but purchasing the
equipment and hiring people to monitor the system can be expensive. Some retailers
install non operating equipment that looks like a TV camera to provide a psychological
deterrent to shoplifters.

Ink /dying tags

Deterring shoplifting is to embed dye capsules in the merchandise. If the capsules are not
removed properly by a store employee, the capsules break and damage the merchandise.

Radio frequency identification (RFID)

Radio frequency identification (RFID) is a generic term that is used to describe a system
that transmits the identity (in the form of a unique serial number) of an object or person
wirelessly, using radio waves. It's grouped under the broad category of automatic
identification technologies. , RFID is increasingly used with biometric technologies for
security.
Unlike ubiquitous UPC bar-code technology, RFID technology does not require contact
or line of sight for communication. RFID data can be read through the human body,
clothing and non-metallic materials.

Components
A basic RFID system consists of three components:

• An antenna or coil
• A transceiver (with decoder)
 • A transponder (RF tag) electronically programmed with unique information

• The antenna emits radio signals to activate the tag and to read and write data to it.
• The reader emits radio waves in ranges of anywhere from one inch to 100 feet or
more, depending upon its power output and the radio frequency used. When an
RFID tag passes through the electromagnetic zone, it detects the reader's activation
signal.
• The reader decodes the data encoded in the tag's integrated circuit (silicon chip)
and the data is passed to the host computer for processing.

STOCK TAKE (FOR FINDING OUT SHRINKAGE)

Overview

A stock take is the process of physically counting inventory and re-entering these figures
into the Retail System to ensure correct figures. Often this task is performed annually at
close of financial year. But future group do stock take at the duration of three month for
checking out shrinkage.

Creating a Stock take

Before you can process a stock take, you must create the stock take definition in the retail
system; this is done by calling the stock take management screen and pressing "new" to
create a new stock take. Each stock take you process must have a unique name. For ease
of naming, we recommend using the date and brief reason, such as "EOY 31/5/2009".

Once you have created the stock take, you need to "Snapshot Current Levels" in order to
record the POS stock on hand positions at the moment you wish counts to be entered at.
Although a stock take is typically a several day affair, all the counts you enter are deemed
to have occurred at a single point in time. At this point in time, you need to snapshoot the
current levels.
For example, if you are processing your annual stock take, you may create the stock take
a week before the actual date you wish to perform the stock take. You only create the
stock take at this time, and do not snapshoot your current levels. Once you have created
the stock take, you can begin entering counts (before sharpshooting is allowed) which
might come from warehouses and back room operations. At the time you wish stock
levels to be considered as entered, you press the "Snapshot Current Levels" button.

After you have recorded the current levels, you may continue to enter counts afterwards.
In fact you can continue to enter counts until you finalize the stock take. All these counts
are deemed to have been made at the point in time you recorded the POS levels however.

You can continue to operate normally, with sales and inwards goods while a stock take is
open, counts are being entered, and during a finalize.
Entering Product Counts

There are two main techniques for entering product counts. You can either use the classic
"selling" mode of operation in the POS, or a spreadsheet style entry where individual
products are keyed. It is also possible to use both techniques, using the POS mode for
rapid data entry and the maintenance mode for corrections and final updates.

Both techniques can be used by multiple users entering counts on the same stock take at
the same time. You cannot use selling lanes using the offline mode of operation for stock
take count entry.

Using Selling Mode Count Entry

In this mode of operation, the counter POS is placed into stock take mode, and items are
sold as normal, except that when the sale is completed, the counts are recorded in stock
take and not as a true sale. The advantage of this technique is its familiarity for users,
where the stock take process is akin to selling.

To enable this mode of operation, display the stock take control panel shown above, and
press "Enable Count Entry". Exit the screen and return to the main selling screen. The
background will change to a green/white checker box pattern to indicate it is in stock take
mode. Sell the products as normal, except the POS will prompt for a quantity as each
product is sold. Periodically, complete the sale by attempting to pay it off. The action of
trying to pay the sale causes the POS to store the stock take counts; it does not affect
financial or sales information. We recommend saving the counts at least every 30-40
items in order to minimize complexity.

When you are finished entering stock take counts, return to the stock take control screen
and unclick the record counts button. You can repeat this whole process many times if
required.

Using the Viewer to update data

The viewer is available for a stock take from the management screen. This screen
displays all products and current counts entered. The column with the columns is colored
Aqua blue to indicate that you can type a value in and alter the recorded level. Simply
enter the total counts against each product and press OK to save the values.
Reporting Variances

Use the viewer on the management screen to review counts and values. This displays a
list of all products and the relevant stock take figures for each. There is filter button that
allows you to control the granularity of products being displayed, so that you can review
stock take figures on a department by department basis, or by supplier or a number of
different ways.

When a selection is visible, just as all products from supplier X, click on the options and
statistics button to display a quick summary of the current selection.
 1. Total Item Count The sum of quantity of items as counted. If your display
includes weighed, measured or other non unit based items, eg fuel, sand, timber,
then this total reports the measurement basis, such as millilitres or grams.
2. Sum of Variance The total of the variance counts, including both positive and
negative values.
3. Number of Variances The number of items that report a variance.
4. Recorded Values The value of stock as recorded in the POS at the time of the
snapshot.
5. Counted Value The value of the stock as represented by the counts that have been
entered.
6. Value Variance The difference between Counted Value and record value.

Excel

If you have the Excel Reporting option, there are formulas available for reporting stock
take totals directly into Excel. Refer to your Field pine Excel Guide for further
information.

Finalizing

When you have entered all your counts and are happy that the stock levels should now be
updated to these counts, you need to finalize the stock take process. Display the stock
take management screen, and press the finalized button. The system will zero all stock
levels for the stores that are included in the stock take and reset the current levels to be
your current counts, less sales and plus inwards recorded since the stock take snapshot
was taken. This operation will take a few minutes. Once the stock take has been finalized,
you can no longer alter or enter counts for that stock take. If you are using AIM and wish
to correct a single item, you can use the AIM stock level adjustment procedure to do this,
but this is no longer part of the stock take, rather it is part of normal ongoing operations

RECOMMENDATION

1. Don't think you can get rid of the problem if only you had the 'right' people.
Although screening new employees is an important part of security measures,
shrinkage it is not a character thing – it's a situational thing – the idea is to change
the situation.

2. Tidy up your system – you can only notice something's out of kilter if the rest is
in kilter.

3. Start organizing your system from the back, not the front. Begin with goods
receiving – usually the 'crime scene'. Depending on the nature of your retail store,
shoplifting is probably a distant second.

4. Poor people don't necessarily steal – people who perceive the absence of a
capable guardian steal. So don’t hesitate to caught cheater even if they are from
high society.

5. Use the Golden Hour (the employee's first hour at his/her new job) to promote
your efforts against shrinkage. Set the attitude towards theft –– label shrinkage as
unacceptable and share the consequences. It also makes employees more aware of
the fact that, because it's important, resources are dedicated to it and that
'someone's always watching'.
6. Small things done more often can sometimes be as effective as big things that
happen infrequently. Two fake cameras (moved around often) may be better than
one real one.

7. Although an important part of loss control is 'inconsistency' (such as moving

mirrors around), there are aspects of loss control that require absolute consistency.
If you have CCTV, then make sure you switch on the recorder every time you
leave the store. .

8. Lack of motivation makes for high shrinkage – there's nothing more satisfying
than meting out your own justice – if staff don't feel valued, then they will make
up for the value in terms of goods. Fair's fair.

10. People often start stealing in the first few weeks of their job (frequently taught
by co-workers), Make sure that the amateur has as little desire and opportunity to
see theft as an acceptable-risk alternative.

11. You snooze you lose. Waiting for shrinkage to become a problem is, well,
waiting for shrinkage to become a problem. Loss control does not require money
as much as it requires your serious, regular attention. Simple activities can go a
long way: posters, anonymous hotline, lectures/programs, code of conduct, videos,
newsletters, honesty incentives, employee committees, paycheck stuffers,
employee surveys (just send out a questionnaire), audio tapes and lots more. Be
creative – there's nothing worse than a surprise change to a regular offender.

12. An element of loss prevention should have a communication strategy, just like
your advertising and communication to your 'honest' customer base. If you have an
agency, brief them – the more impactful the result - the better.

13. Don't leave things if that's not the way they're supposed to be. Repair
immediately. If a window or door is broken and left unrepaired, people walking
by will conclude that no one cares and no one is in charge. The anarchy then
spreads resulting in what we see as the high crime rate.

14. Make staff understand that there's a big exam s called stock take, where you
can work out what the shrinkage actually is.

15. Store managers to review register transactions every day - look for excessive
openings of the drawer, small cash refunds, returns, etc. (Important Tip: Make sure
your employees can see you or a manager reviewing this information.
 16. Look at your "voided/cancelled/deleted sales report" every day.

17. Look at your "returned transactions" report every day.

18. Do not share passwords so your cashiers can logon with a different username.

19. Add password protection/security to all areas of your software and ONLY

Allow employees to access what they really need.

20. If possible, Look at your "inventory adjustments report" every day.

21. Look at your "profit margin reports" every day. If your margins are low in a
certain category for that day, then you should do a little research to find out why.

22. Keep your inventory count accurate.

23. Make it common knowledge with your employees that your stock is constantly
monitored in your POS system.

24. Secure the access to your customer's personal information in your POS
software... particularly, their credit card information!

25. Keep the back door closed and alarm it. This is one of the easiest ways for
employees to sneak out merchandise.

26. Have management inspect the garbage before it's taken out.

27. Review security videos on a regular basis. And most importantly, make sure
your staff knows you do so.

28. Work as per rule and norm your company has made.

29. Work on hard policies and rules to fight from pilfering and shoplifting.

30. Keep a balance between flour quantity, warehouse quantity and inwarding new
stock, because excess quantity leads more no. of damage and shrinkage.
 Conclusion

While doing this project I realized that company incurs million of thousand of rupees
because of shrinkage and damaging of merchandise. To ward off loss completely is not
possible but by working on right policy store can definitely decrease the amount of loss at
the large extent. At this time when India is becoming favorites global destination for
world retail market and owing to that more no.’s of big player is venturing in this sector,
so, competition is becoming so tuff. Every retailer wants to make available product to the
customer at the best value price, in this process they take only less margin and if they
incur more no. of shrinkage and loss, their margin would further goes down. It is also
possible that one can lag behind in comparison to one’s competitors. So I think tackling
from shrinkage retailer should follow a standard process and they should make shrinkage
as a topic of their research and development program and should resort new technologies
like RFID with open heart.
 Bibliography

1. www.pantaloon.com

2. www.google.co.in

3. www.slideshare.com

4. http://www.possoftwareguide.com

5. www.DMSRetail.com