November 10, 2016

5 Steps to Achieve a Successful Source Tagging Programme

Source Tagging

The article from Checkpoingtsystem company’s Rick Pestian and Judith Sheehan.

Following a period of economic downturn in which we have seen opportunistic thieves increasingly target food products, supermarkets continue to face a risk of theft with the Global Retail Theft Barometer identifying meat and cheese among the most stolen items.

A source tagging programme is proven to reduce shrink, while delivering additional benefits throughout the supply chain, including helping to increase sales and reduce out-of-stock incidents. So if you are considering implementing a source tagging programme in your store, here are five important steps to follow;

1, Using data

Data is king. It drives the majority of the business decisions. Before any verdict is made to implement a source tagging programme, loss prevention managers need to analyse the data that is at their disposal. This will enable them to make informed choices on what products are most at risk and should be selected for a trial.

The role data plays shouldn’t stop there. Once products have been identified, it’s vital to collect more during a trial period. The solution providers’ source tagging team will deliver relevant data on the audits, enabling retailers to compare pre- and post-data on source tagged items, demonstrating a clear potential return on investment. The ability to present tangible results will aid you in your quest to get buy-in from others in your business. In my experience, it’s particularly important to begin discussions with financial and buying teams at this stage – those who traditionally speak to the suppliers more frequently than loss prevention departments do.

2, Team collaboration

Following a successful trial, the real work begins. From the outset, the solution provider will work closely with the retailer and the manufacturer. From factory staff and pickers to product development teams and loss prevention managers, collaboration and communication is essential to a successful project.

The solution providers’ source tagging team will visit the manufacturers’ factories to evaluate their operations. No two factories are the same and it is important to understand how the procedure can fit in with each suppliers’ unique processes. To do this, your account manager should have technical, factory-level experience, who is able to fully understand the challenges of introducing a new labelling process and advise which solutions are best suited to each supplier.

3, Testing

Once the right solution has been identified, the solution provider should complete a test and run a trial. Once tagged, a sample of products will be taken to the solution provider’s ‘Source Tagging Laboratory’ to check whether the detection and deactivation is suitable for the stores in which they will be sold.

Testing deactivation ensures incidents of false EAS alarms are kept to a minimum and also ensures a quicker customer checkout, improving customer satisfaction levels. Of course, it is equally important to test detection to ensure that labels are placed in an optimal detection position.

4, Long term solution

Once testing is complete, the source tagging programme is ready to be rolled out. A successful project is not a short term solution that can be switched on and off, it should provide added value that can result in it becoming an invaluable addition to the manufacturing process and maintained throughout the products order cycle with new detection testing carried out as and when there are packaging alterations. The ultimate objective should be that the programme is easily scaled up to include all future product lines.

5, Conduct an in-store product audit

It’s important for the retailer to ensure compliance through regular checking of the source tagged products arriving in store.

In some instances, the head office is aware the source tagging programme exists, but staff on the shop floor are unaware as to which products arrive tagged. Checking that store staff across the estate know about the project is vitally important to prevent instances where security protected and ready to sell products are delayed going on to shelf because staff think they need to apply a security tag. Operational inefficiencies like this are eroding margins every year. The source tagging programme should deliver improved speed to shelf, helping to reduce out-of-stock scenarios and increase sales.

One month

Typically, it can take up to six months to implement a source tagging programme, but this can be reduced to just a month by working closely with a specialist and following these aforementioned steps to ensure the project is successful and delivers ROI in the quickest possible time.

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