Ways to Minimize Inventory Loss in Lidl Supermarkets
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Added on 2023/06/11
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This article discusses the problem of inventory loss faced by Lidl supermarkets and proposes ways to minimize it. The scope of the project, stakeholders, and plans to investigate and gather data for analysis are also discussed.
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Running head: WAYS TO MINIMIZE INVENTORY LOSS WAYS TO MINIMIZE INVENTORY LOSS Name of the Student Name of the University Author’s note
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1WAYS TO MINIMIZE INVENTORY LOSS Project Proposal Organizational Background LidlStiftung & Co. KG is a chain of supermarket, which is primarily based in Neckarsulm in Germany. The company has its operation in 10,000 stores all over the United States and Europe. The company was founded by Dieter Schwarz. They also own their chain of stores in Handelshof and their hypermarket in Kaufland (Lidl UK 2018). The company is the main competitor of a similar kind of chain of discount, which is named as Aldi that has their operations in several markets within the United States. The Lidl stores also have their operation in every state of the European Union. The primary vision of the company is to enhance and improve the way of shopping for the customers. They provide quality based products at the value, which is led by the market. They also ensure the satisfaction of the customers. The role within the project is to help in providing ideas in ensuring the minimization of the loss of inventory. Identification of the Problem The company, Lidl is facing a major problem based on the loss of inventory. The inventory loss could be defined as a kind of condition where the stock of the items within the stock is less in quantity than expected from the recorded data in the database or which are indicated from the paper based records (Fanet al.2015). The occurrences within the company should be tracked in order to recognize the patterns of the amount of loss, which would be linked to the theft or misplacement of the items of inventory such that the appropriate action could be taken.
2WAYS TO MINIMIZE INVENTORY LOSS The inventory loss within Lidl is an important problem, which needs to be addressed. The loss of inventory is also called as shrinkage. The managers and accountants within the company should be given the sole responsibility of keeping a track of the level of shrinkage by giving an effort in order to manage the issues related to the loss of inventory (Kouvelis, Li and Ding 2013). Scope of the Project The project is based on a company, named as Lidl. The company is dedicated to enhance the experience of purchasing of the customers. They also help in ensuring the satisfaction of the customers (Solomonet al.2014). The company is facing problems from the loss of the store of the stock. It is also known as the loss of inventory or shrinkage. The project focuses on dealing with the ways to eliminate the risks of the loss of inventory. The managers of the store should be aware of the number of the items within the store and the absolute figure of the number of items, which would be purchased for resale. They should keep a track of the number of items within the store, the number of items that are purchased within a particular period of time and the number of items sold.The managers should make use of the unit price and the price of the resale of the unit. They could also know the figure of the goods at every point of time. The loss of the inventory would measure the level of differences within the received value. The level of shrinkage could be calculated accurately by following a formal process of inventory and thus comparing the data with the previous records (Beck 2014). Details of the Stakeholders or Contacts The loss of inventory within Lidl could be resolved by following certain processes. The proper use of the management team would be helpful in dealing with the current issue, which is being faced by the company. The managers within the company have the major responsibility of
3WAYS TO MINIMIZE INVENTORY LOSS dealing with the issues. They should decide on the course of actions, which need to be followed in order to prevent the further loss of inventory within the business processes. They should keep a track of the previous losses and thus discuss about new forms of ways that would be helpful in dealing with the problems. Plans to be investigated The plans that would be needed to be investigated to control the loss of inventory are: 1. The detection of the theft of inventory means the inventory removal from the place of storage for personal use and resale. The storage areas should be locked, video monitoring should be implemented, background checks should be conducted on the employees and a conduction of random physical based audits on the inventory should be implemented in order to prevent the theft (Kelkar and Emilus 2017). 2. The factors of risk for inventory based fraud should be viewed (Wu and Olson 2013). 3. Misstatements and errors within the reported balances of inventory should be looked into. This could be prevented by the proper conduction of surprise based audits and by the process of separating the invoicing and responsibilities of shipping. 4. The unusual trends within certain financial ratios, which would involve the inventory should be spotted. The possible signs of the fraud within the inventory would include the balances of the inventory that would rise faster than the amount of sales and the costs for shipping that would show a level of decrease as a percentage of the inventory. Plans Undertaken to Gather Data and the Process of Analyzing The loss in the process of inventory occurred within Lidl could be controlled with the help of certain processes:
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4WAYS TO MINIMIZE INVENTORY LOSS 1. The company should discuss about the matter of the loss of inventory with the managementteam,whichwouldinvolveaboutthepotentialbasedoutcomes.Themain consideration should be provided to the staffing levels through the process of interviews. 2. The company should be able to maintain a sound relationship with the suppliers of the products. The quantities of minimum order would often be negotiable. The communication with the product suppliers should be in a friendly manner. 3. The current trends within the market should be viewed, which would be essential to measure about the other process that are followed by other companies in order to manage the loss of inventory (Richards 2017).
5WAYS TO MINIMIZE INVENTORY LOSS References Beck, A., 2014. Understanding Loss in the Retail Sector. InThe Handbook of Security(pp. 361- 382). Palgrave Macmillan, London. Fan, T., Tao, F., Deng, S. and Li, S., 2015. Impact of RFID technology on supply chain decisions with inventory inaccuracies.International Journal of Production Economics,159, pp.117-125. Kelkar, M.M. and Emilus, Y., 2016. Applying the Theory of Planned Behavior to the Problem of Employee Theft in the Retail Industry. Kouvelis, P., Li, R. and Ding, Q., 2013. Managing storable commodity risks: The role of inventoryandfinancialhedge.Manufacturing&ServiceOperationsManagement,15(3), pp.507-521. LidlUK.(2018).LidlUK|Food,Non-Food,WineandRecipes.[online]Availableat: https://www.lidl.co.uk/en/index.htm [Accessed 8 Jun. 2018]. Richards, G., 2017.Warehouse management: a complete guide to improving efficiency and minimizing costs in the modern warehouse. Kogan Page Publishers. Solomon, M.R., Dahl, D.W., White, K., Zaichkowsky, J.L. and Polegato, R., 2014.Consumer behavior: Buying, having, and being(Vol. 10). Pearson. Wu, D.D. and Olson, D.L., 2013. Computational simulation and risk analysis: An introduction of state of the art research.