This post discusses loss prevention and loss prevention strategies.

WHAT IS LOSS PREVENTION?

Loss prevention is a risk management measure to prevent loss of life, health, and property from an incident or accident. It is establishing policies, procedures, and business practices to avoid the loss of inventory or monies in a business environment. Loss prevention helps save lives and physical properties, prevent workers from pain and suffering, and avoid unnecessary expenditures through safety departments.

BENEFITS OF LOSS PREVENTION

A good loss prevention programme would assist an organisation to:  

1) Minimise loss of equipment and property, 

2) Ensure the protection of assets, 

3) Minimise accident rate and severity, 

4) Minimise insurance claims, 

5) Minimise interruptions of production and services, 

6) Prevent accidents and reduce the risks of hazards in the workplace, 

7) Improve a safe work environment,

8) Improve worker efficiency, 

9) Ensure uninterrupted production and services, 

10) Improve workers’ job satisfaction,

11) Improve a firm’s profitability, and 

12) Promote business goodwill.

ELEMENTS OF LOSS PREVENTION PROGRAMMES

Two core elements of excellent and well-structured loss prevention programmes:

1. Dedicated Loss Prevention Resources.

Having dedicated resources (internal or outsourced) to develop, implement and maintain the overall programme and its elements provides a firm with a focused means of preventing loss, reducing shrink, and increasing overall profitability.

2. Creation and Implementation of Controls.

Developing controls focusing on business areas that incur loss (including the point of sale, inventory control, cash control, safety, shoplifting, and employee theft) will help establish appropriate policies and procedures to prevent loss.

 THE BASIS OF LOSS PREVENTION

Companies serious about developing and maintaining an effective loss prevention programme must ensure the following elements are in their plan. 

1. Management commitment.

2. Assignment of responsibility.

3. Development of programme objectives.

4. Employee involvement.

5. Use of metrics and trend tracking.

6. Monitoring of the programme and maintenance of its visibility.

Effective monitoring and maintenance programmes should be based on two main philosophies: 

1. Until a loss-prevention plan is tested, it is just a piece of paper, and 

2. Do not leave it on the shelf. It must be a living document that keeps changing as the business changes.

STRATEGIC PLANNING AND LOSS PREVENTION

Loss prevention is an integral part of strategic planning. Hence, firms should continually improve their loss prevention efforts by: 

1) Creating a centralised team to oversee enterprise loss prevention efforts and training, 

2. Link loss prevention data to analytical platforms or basis, and 

3. Combine real-time and historical data to make the best loss-fighting decisions. The Key to a successful loss prevention strategy is for a firm to be more events focused and use real-time information to make projections for the future.

PROVEN STRATEGIES FOR LOSS PREVENTION

Here are eight proven loss prevention strategies that will assist businesses in enhancing their loss prevention programmes:

1. Leverage employees and encourage them to be committed to loss prevention activities. 

2. Formulate clear loss prevention policies.

3. Use Clear Communication and Training.

4. Update Accounting to ensure accountability and transparency.

5. Automate Inventory Controls.

6. Monitor Loss Trends.

PRINCIPLES OF LOSS PREVENTION

A well-structured loss prevention function should include a programme designed around six fundamental interwoven principles which focus on prevention, identification, and resolution of loss.

Here are the six principles of loss prevention:

1. Prevention

2. Awareness

3. Compliance

4. Detection

5. Investigation

6. Resolution

See the full video on Loss Prevention and Loss Prevention Strategies: https://youtu.be/WxDA7BXE04U