Dennis Thomas – Loss Prevention Program

Report
2013 DNC Food & Beverage Summit
Corporate Loss Prevention Program
“ A Culture of Integrity”
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To establish a strategic loss prevention program leveraging multiple
internal partnerships (Internal Audit, Treasury, IT and Risk Management.
Collaborated with various business partners.
To provide clarity regarding shrink and loss rates by unit
(SSUS,THS,P&R,G&E, BOS, P&S,UK,AUS) with DNC LP Visibility.
Scalable phased in program.
Limit Exposures to DNC by Internal Occupational Fraud
Schemes & External Loss Sources primarily through increased education.
Decrease Controllable Losses and Negligence through a comprehensive
Associate Awareness Campaign.
Leverage Technology, Training and LP Best Practices
Based on 100% global base :
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10% of all people will never become dishonest even when given
the opportunity to be dishonest without detection.
80% of all people will engage in dishonesty if they believe the
dishonesty will not be detected. Each person has a level of
dishonesty based upon their own moral code. (This is whom we
want to effect).
10% of people’s sole reason for joining the organization is to steal,
misappropriate and engage in dishonesty from the onset of
employment.
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Not all losses are a result of theft.
The challenge at DNC is measuring loss. This
include reduced profits through wastage,
spoilage and damages.
Failing to control or quantify loss leads to
increased COGS and lost profitability.
Inventory levels become affected when these
key items are not being measured correctly.
This can add several percentage points to the
COGS and impact the business significantly.
CORPORATE VISIBILITY
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As of 6/25/13, DNC operates 123
locations globally, approximately 20%
are SKPI eligible
13% out of the 20% SKPI eligible units
have not reported inventory variance
for this year
DNC Corporate currently has visibility
of 6.5% of unit inventory results
globally
No centralized inventory monitoring
system in place . Masterfiles do not
exist
Reporting ability for 80% of DNC units
is not visible to LP
SHRINK RATES
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DNC SHRINK RATE %
US average retail shrink rate in
2011 is 1.58% of sales
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EU average retail shrink rate in
2011 is 1.39% of sales
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US average F&B shrink rate in
2011 is 1.63% of sales, liquor
2.95% of sales
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EU average F&B shrink rate in
2011 is 1.57% of sales, liquor
2.25% of sales
Source: 2011 Global Retail Theft Barometer
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Unknown Shrink Rates
in 2013 due to:
Variance reports not
being sent back to DNC
Global HQ
Inventories not being
completed properly
Poor Pre-Inventory
preparation
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Ability to educate the
50,000+ employees quarterly
with LP/CS related topics
Each quarter LP/CS will
concentrate on a particular
cover theme
Advertise employee
dishonesty apprehensions in
a “Gotcha” section quarterly
Can be distributed in both
virtual and paper copies to
reduce printing costs
Fall 2013 Newsletter
Theft Deterrence
through
Transparency
GOTCHA’S
Winter 2013 Newsletter
Loss Prevention
Awareness Poster
This poster is designed to complete
awareness at several levels:
Provide an avenue to confidentially
report concerns or observations
without the fear of reprisal or nonaction
Increased environmental
awareness. Helps establish
ownership in the business
operation by all stakeholders
Encompasses messaging to engage
in active observations of both
internal and external
Deterrence for internal theft and
visiting vendor dishonesty
Advertises the Associate Hotline
number for other employee related
concerns
FRAUD TRIANGLE
DETECTION OF INTERNAL THEFT
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43.3%
14.6%
14.4%
7.0%
4.8%
4.1%
3.3%
3.0%
1.9%
1.5%
1.1%
1.1%
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Source: ACFE 2012 Report to the Nations
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Employee tips
Management review
Internal Audit Detection
Accidental Discovery
Account Reconciliations
Document Examinations
External Audit
Notified by Police
Surveillance/Monitoring
Confession
IT Controls
Other
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Source: ACFE 2012
Report to the Nations
Physical Security is not a deterrent
to theft & dishonesty
Most internal thefts occur for 18
months before detected
Peers in most cases have strong
suspicions regarding theft and/or
fraud but do not report to a
supervisor
87.6% of all reported corporate
thefts were asset misappropriation
cases
87.3% of dishonest employees were
never charged or convicted of a
crime previously
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A multi-disciplinary approach to deter
criminal behavior through environmental
design.
Theory developed in the 1960’s in the
Chicago Housing Authority to address
security concerns.
Criminologist C. Ray Jeffrey highlights
the theory in a 1971 book called
“Defensible Space”.
Largely developed through the “Broken
Windows” theory. (Abandoned houses,
lead to broken windows, which lead to
decreased housing values). This same
theory can be applied to businesses.
Controllable thefts and criminal conduct
will increase in units not properly
maintained, have poor housekeeping
and are lacking strong internal controls.
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Natural Surveillance: increases the threat of apprehension by taking steps to
increase the perception that people can be seen (placing more expensive
merchandise closer to the register).
Natural Access Control: limits the opportunity for crime by taking steps to clearly
differentiate between public space and private space (Proper lighting, designated
points of entry/exit).
Natural Territorial Reinforcement: promotes social control through increased
definition of space and improved proprietary concern (Motion Detectors, Alarms,
Integrated Camera Systems).
Maintenance: is an expression of ownership of property. Deterioration indicates
less control by the intended users of a site and indicate a greater tolerance of
disorder (Broken Windows Theory).
Activity Support: increases the use of a built environment for safe activities with
the intent of increasing the risk of detection of criminal and undesirable activities
(understanding normal course of business, so outliers can be more readily
identified).
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Affordable alternative to
deter theft of lesser priced
merchandise
High Impact
Immediate visual deterrent
Customizable Text
Decreases thefts of
opportunity
No need for deactivation by
Sales Associates
Less customer service issues
vs. conventional RFID
systems
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Reduce inventory
labor costs
Real-time perpetual
inventory results
Measure product life
Forecast Optimization
Inventory Profitability
Integrated technology
identifies and reduces
internal thefts.
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Radio-frequency identification (RFID) is
the wireless non-contact use of radiofrequency electromagnetic fields to
transfer data, for the purposes of
automatically identifying and tracking tags
attached to objects.
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Tags may either be read-only, having a
factory-assigned serial number that is
used as a key into a database, or may be
read/write, where object-specific data can
be written into the tag by the system user.
Field programmable tags may be writeonce, read-multiple; "blank" tags may be
written with an electronic product code by
the user.
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Completion of SAFE Assessments at Units to increase
controls of the Cash Rooms and General Offices
Case Management System for follow-up of Associate
Hotline calls
Integration of CCTV, Card Access and Intrusion
Systems
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Workplace Violence Program
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Alcohol Compliance Program in Sportservice
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DNC Corporate Crisis
Plan
CCRP Reporting
Guidelines
When Do I make a
call to the Associate
Hotline?
What happens once I
make the call to report
an incident?
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Dennis Thomas
Corporate Security
Loss Prevention
Operations Manager
(716) 858-5678
[email protected]
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Richard Santucci
Corporate Security
Manager
(716) 858-5321
[email protected]

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