Identifying the Causes of DVD Stock Shrinkage in the Supermarket Store - Research Proposal Example

A proposal to identify the causes of DVD stock shrinkage in the supermarket store Name Grade course Tutor’s Name Day, Month, Year A proposal to identify the causes of DVD stock shrinkage in the supermarket store Retail company’s estimates on stock loss or shrinkage place the losses from anything between 1% up to 3% of the company’s revenue. Beck et al. (2003) asserts that for retailers selling fast moving goods such as foodstuffs and DVDs, the losses can be higher. Stock can be lost from initial manufacturing, through distribution to delivery and storage up to the point of sale in shop displays. Losses may occur due to unintended errors in the processes used in the companies such as through stock counting errors, scanning errors, store delivery errors and errors in the methods of pricing. Other losses may result from out of date goods, warehouse handling damages and price reductions. Nonetheless, some losses may occur from malicious and deliberate acts such as under delivery by suppliers, theft by customers and theft by employees. Beck et al (2002) found that nearly 66% of stock losses occur at retail stores and the rest approximately averaging between 20-40% through external theft. The significant internal loss was thought to be probably due increased likelihood of stock damage, price reductions for outdated products, theft and damage from customers as they buy and by staff in the warehouse and at point of sale. An evidence deficit of information on which points the losses occurs exists either due to poorly designed methods of carrying audits, poor maintenance of stock loss databases and lack of prioritization. Besides, Masuda (1992) asserts that there is evident bias on opinion on the points where stock losses occur. Respondents hold relative perspectives on where the losses occur with most erroneously attributing stock losses various points based on assumptions and not actual research. Naturally most retailers firmly believe that employee theft is the main cause for stock shrinkage in doing business. Such believes have impact on the choice of preventive measures adopted to arrest the stock losses. Consequently, most have employed technology led solutions such as electronic Article surveillance (Beck, Bilby and Chapman, 2003). Still, such solutions have not been effective in addressing all shrinkages as they make little or no impact on some losses such as staff theft, delivery theft and so on. It is thus not surprising that reports by the British retail consortium assert that most retailers are aware of only between 20 to 30 per cent of the stock losses (British Retail Consortium, 2000). Whereas most organizations believe that they can use available data breakdown on stock losses in retail industries to come up with strategies to tackle stock loss problems, the evident extent of unknown stock losses undermines organizations understanding of the actual proportion of each loss source contributing to the whole. Such unavailability of timely, reliable and complete information bears significant implications for the way the organization responds to the problems of stock loss since any responses relying on such data is likely to be partial, inappropriate, poorly informed and ineffective (Masuda, 1992). Yun and Gershwin (2004) point out that relying on inaccurate information in critical decision making can compromise the availability of products at the minimal operating cost by disrupting replenishment process and possibly creating stock outs. Such loss from stock outs can far outweigh the shrinkage losses themselves. Consequently, the relative perspectives by management, the obvious differences in point of loss that may exist across different organizations and the high cost inaccurate information makes it necessary for the organization to determine the actual causes of stock losses of DVDs in the supermarkets store for the organization to design appropriate and effective responses to the losses. The projects aim 1. To determine at which stage between delivery and reception into stock, while in stock room or when on display do the greatest losses occur. 2. To determine whether the previous security manager suspicions that most losses in stockroom occur during the evening shift are correct. 3. To determine which is the bigger problem for the store between internal stock shrinkage and shoplifting by customers 4. To determine whether a culture that supports employees taking items from the store exist in the evening shift and how widespread it is. The Research design The strategy to be employed in evaluation has three main parts: literature review, an analysis of the existing six months quantitative data on stock losses at different points held by the company, a survey of a sample of the staff to identify existence or prevalence of a culture of taking goods without paying for them as a side benefit to employment in evening shift and in the store in general. The Literature review will consider how other stores have determined the causes of stock losses in their stores and how successful they have been. The review will also determine the features of the other stores that the supermarket store might adopt. This review will further consider the methods adopted in earlier research studies and which may be appropriately adopted for the current study while at the same time acknowledging where it is done as not being the original work of the author. Information on reported cases of stock losses is available for six moths. It would therefore be possible to use the existing data on stock theft to determine quantitatively the extent and cause of stock loss in the local store. The most crucial analyses to conduct include determining the prevalence of losses at each point in the organization from delivery to in store display. The figures are to be compared over time so that it is possible to determine the main causes and points of stock losses so that the effect of natural variations and other potential factors that can influence the month by month statistics can be distinguished. Influential factors that may influence data on stock losses may include variations such as changes in number of employees, changes in seasons, hiring of new employees and others leaving thus affecting the data variations. Qualitative analysis will determine whether there exists prevalence of a culture that encourages theft of stock among evening shift and across the organization. These will involve use of questionnaires that will be distributed to volunteer respondents from the three different shifts. The questionnaires will be marked for purpose of marking to identify the shifts they belong and to follow up on return but otherwise they will be administered anonymously. Ethical and Safety Considerations The research is deigned in a way that it is in compliance with the safety protocols advanced by the Social Research Association and ethical guidelines provided by the British Society of Criminology. Employees of the organization will not be approached directly to fill questionnaires meant to identify whether prevalence of a culture of theft as a side perk of evening shift and across the organization exists. Instead employee’s who volunteer to be respondents will be provided with questionnaires to fill anonymously and return anonymously such as through posting in a suggestion box. This approach entailing anonymity in filling of questionnaires and returning them is meant to alleviate employee’s fear of victimization for their views. Additionally, anonymity will reduce the risk of bias in the interview due to fear by respondents. The researchers should also not pass data on contact details of the respondents. If the researcher was to pass data on respondents without their permission, they would be contravening ethical guidelines on data protection. Using postal survey services to elicit respondent’s response and views has been rejected for various reasons. Firstly, the response rate for postal surveys when the survey is concerned with sensitive matter is often vey low due to the fear of the survey results being traced back to the respondents and resulting to victimization. This may impact negatively on the validity and reliability of the survey results making them to have minimal value (Edward et al, 2001). When the researcher contacts the victim, each one will be asked for their consent to participate in the research. This will involve preparation of a summary of the research proposal explaining why the research is being conducted and the use of the results. The researcher will further inform the potential respondents that they are under no obligation to participate in the survey and by so doing it will not affect their terms of employment or the employment relationship in any way. Additionally, it will be made clear that no employee will be identifiable or identified in any published report. While ideas about the possible improvement that can be made to reduce stock losses can be made while the evaluation is in progress, the source of such a feedback will not be revealed. Validity of the findings By comparing the results of the supermarket store with results of similar stores and in previous months means that the results would reasonably shed light on the causes of stock losses in terms of the prevalence of a culture of theft in employees working in specific shifts, shoplifting among customers among other identifiable causes of losses. Since this is a small scale study comprising of only one store, without knowing the organization culture of other stores in the supermarket chain, it would not be wise to extrapolate the results from the study to conclude that other similar sized stores would have the same causes for stock losses. However, comparing the findings of this study with those of previous research on the same area, it should be possible to assess similarities and possibility of any generalizations. All the quantitative analysis will be based on the six month record of stock losses in the store. This means that although the study will present crucial results on the points at which the losses occur, it may not be able to necessarily capture the underlying reasons for the stock losses. For instance, while the record may indicate that employee stock theft or shoplifting is common in the organization, it may not be possible to use the quantitative data top capture whether theft is attributed to other factors such as poor pay resulting to dissatisfaction of employees, collusion between employees and customers or whether this may be caused by an underlying organizational culture. The use of qualitative analysis will increase the validity of the results where there is evident corroboration in results. Again, as noted previously, since employees cannot be selected randomly or approached directly by the management to participate as respondents in the survey, caution should be taken in interpreting the views that would result from the sample. The views in the sample may be biased by denying prevalence of a culture of theft of stock by employees if respondents perceive there are risks to their jobs in providing contrary opinion. However, the results may be compared with other studies that have used the same methods to elicit employee’s views on various attributes that may have impact on the way employees are managed while taking all necessary precautions. This is crucial since employees may have an interest in the way the results are interpreted and this may create a bias since they are aware that their views may impact on the way the store is managed. Quantitative analysis In order to answer the question of which DVD losses occurred, it is crucial to compare the number of DVD that were accounted for at each point. The number of DVDs delivered according to the supermarket headquarters are 4000 for every month but only 3900 are recorded as being received for each month. This averages 100 units of DVDs stock loss each month. The number of DVDs lost in the stockroom during all shifts average 35 for the day shift, 35 for the evening shift and 21 for the night shift. Losses while on display average 71 units. Analysis therefore show that the highest stock losses occur between delivery and reception into stock stores followed by when stock is on display. The losses while on display at an average of 71 each month, representing unknown losses of nearly 20% of the DVDs. The results further disprove the previous manager’s suspicions that most losses occur during the evening shift. Results indicate that the day shift and evening shift both had a similar number of DVD losses at an average of 35 DVDs lost each month in the two shifts. However, the two shifts had higher incidences of DVD losses compared to the night shift with losses averaging 21 DVD s monthly. The study further aimed to determine whether the biggest problem for the store was in internal stock shrinkage or shoplifting by the customers. The average stock losses due to shoplifting for averaged 305 DVDs every month. The stock losses from internal shrinkage averaged 191. Shoplifting is thus the major problem for the shop. The information is crucial as it would provide with the stores with accurate information that would guide in policy decision aimed at mitigating the causes of the losses. References Beck, A., Bilby, C. and Chapman, P. (2002) ‘Shrinkage in Europe: Stock Loss in the Fast Moving Consumer Goods Sector’ Security Journal, 15 [4]: 25-39. Beck, A., Bilby, C. and Chapman, P. (2003) ‘Tackling Shrinkage in the Fast Moving Consumer Goods Supply Chain: Developing a Methodology’ Security Journal, 16 [2]:. 61-75 British Society of Criminology (2006). Code of Ethics for Researchers in the Field of Criminology. Retrived from http://www.britsoccrim.org/codeofethics.htm Edwards, P., Roberts, I., Clarke, M., Diguiseppi, C., Pratap, S., Wentz, R. and Kwan, I. (2001) Methods to influence response to postal questionnaires (Cochrane Methodology Review), The Cochrane Library 3, Oxford: Update Software. Masuda, B. (1992) ‘Displacement vs. Diffusion of Benefits and the Reduction of Inventory Losses in a Retail Environment’,Security Journal, Vol. 3, No. 3, pp 131-136; Yun Kang, Gerswin B.(2004). Information inaccuracy in Inventory systems – Stock loss and stock out. Masachustes Institute of technology. Qualitative Questions Q1. What do you think is the reason for the differences in stock losses between the shifts? Rationale: The open ended question aims to determine whether the employees have specific reasons that they may be aware of that may have contributed to higher losses in the day time and evening shifts compared to the night shifts. The open ended question may capture unsuspected information. Q2. Does a culture regarding taking of goods being a side perk to working in evening shift exist? a) Yes [ ] b) No [ ] Rationale: The previous security manager believes that there exists a culture regarding taking of stock as a side benefit of working in the evening shifts. The question aims to determine if employees perceive such a culture exists. It is meant to augment the quantitative data on stock losses. The choice of using only yes and avoiding a middle scale position is prevent the prevalence of respondents choosing the middle scale especially in a question that may cause uncooperativeness or reluctance to answer thus raising or lowering the response levels erroneously creating validity concerns. Q3. What do you think is the major causes of stock loss in the store? Rationale: Previous studies have indicated that most employees believe that theft by employees is the major cause of stock losses. The question is intended to determine whether such perception exists among the employees. Q4. Can you provide any ways that you think stock losses can be reduced? Rationale 4: Evaluations often involve making recommendations on improvements to existing schemes. Such improvements would be based on best practices and on how the individuals who are in contact with the workplace feel on whether there are ways that the losses can be reduced. Q5. Do you think other employees think it is right to take goods as a side benefit to employment? Please tick appropriately in the box a) Most b) Many c) Some d) A few Rationale: While open ended question are easy to write, they may face response bias when employees are either unable or unwilling to respond in writing. Using closed ended question capture similar information without the risk for response bias due to unwillingness of respondents to respond in writing. The question is less threatening as it measures what respondents believe of others and not themselves thus giving them an impetus to provide unbiased response. Q6. Why do you think some employees take goods? Rationale: The open ended question is meant to provide answers as to the reasons why employees take goods. This is based on the fact that the rationale for theft can vary greatly and the policy for combating theft should depend on the prevalent rationale for theft. The causes may range from poor working conditions, economic needs, opportunity, and dissatisfaction with management, pressure from other employees, organizational culture and so on. The question would thus capture the underlying factors that contribute to the employee’s theft. Q7. How often do you take goods without paying for them? a) Never b) Seldom c) Occasionally d) Frequently Rationale: The question measures respondent’s actual behavior. It is recognized that respondent’s perceptions may not necessarily translate to behavior due to other factors such as lack of opportunities, fear of being caught and so on. The question thus provides the actual figures of a sample representative of theft by employees. It may assist to explain the unexplained losses. Q8. Would you take goods from the supermarket store? Provide your reason for the answer. a) Yes b) No Reason for either answer (Yes) or (No) Rationale: Besides indicating individual’s position on whether they would take goods from the organization, the question also provides the respondent with an opportunity to provide the reasons from their decision. This is based on the fact that reasons for stock theft among employees differ. Such information would be crucial in determining the policies to adopt to eliminate stock losses. It is also placed among the last question since it directly asks sensitive information about individuals. Placing it among the first questions would result to respondents failing to respond to the whole questionnaire as they may fear providing sensitive information about themselves despite assurances of being synonymous. Q9. Do you think it is wrong to take goods without paying for them? a) Never [ ] b) Rarely [ ] c) Occasionally [ ] d) Always [ ] Rationale: The question again aims to determine whether individuals believes and perceptions in regard to taking goods without paying for them. It measures the intensity of such perceptions by indicating the respondent’s reaction strengths. Where the perceptions may exist that it is right, it would indicate a prevalence of the culture. It is closed ended to capture responses from respondents who might have failed or were unwilling to respond by writing. Q10. Is there anything else that you would think would like to include? Rationale: The question is meant to capture any information that might have been missed in earlier responses. It is thus deliberately left very open-ended. Read More