1 Thomas Paulus, CITT & Hendrik Scheider, Wincor Nixdorf CITT C ENTRUM F ÜR I NFORMATIONS -T...

1Thomas Paulus, CITT & Hendrik Scheider, Wincor Nixdorf

CITT CENTRUM FÜR INFORMATIONS-TECHNOLOGIE TRANSFER GMBH

ED-BPM in the Retail Domain

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Taking the Example of Fraud Management


AGENDA

Definition of shrinkage Figures on global shrinkage Methods employed against shrinkage Challenges and potential for loss prevention Typical IT-landscape ED-BPM reference model


ED-BPM IN THE RETAIL DOMAIN DEFINING THE TERM ‘SHRINKAGE’

'Shrinkage' can be defined as loss of stock caused by one or a combination of

crime administrative error, and wastage


ED-BPM IN THE RETAIL DOMAIN FIGURES ON GLOBAL SHRINKAGE

The Global Retail Theft Barometer 2008: Total global shrinkage: >100 billion $ About 1.34% of the retail sales Only ~ 50% of stock loss is considered to be „known“ Spendings for loss prevention: >1 billion $ Sectors differ greatly, loss calculation differs greatly

Source: http://www.retailresearch.org/theft_barometer/index.php

All Retail IndustryCustomer

Staff

Suppliers /Service

Organisation


ED-BPM IN THE RETAIL DOMAIN METHODS EMPLOYED AGAINST SHRINKAGE

PROCEDURES AND ROUTINES Annual stock loss awareness campaign Company-wide stock loss refresher training Customer returns & refund controls (operator and customer database) Damaged goods resale controls Employees exit searches Hot product identification Hot product management Hot products routine counting Security newsletter Internal key control Patrol routes for employees (red routes) Point of sale information or data checks Random till cash checks Rigorous delivery checking procedures Shelf replenishment techniques Induction training for new employees Unique till operator PIN numbers ‘Watertight’ product monitoring proceduresPEOPLE AND PROCESSES Anonymous phone line Civil recovery Covert surveillance of customers or employees Employee awareness and training Employee stock loss training and education Employee incentives—discount purchase schemes Employee incentives—stock loss bonus schemes Employee integrity checks External compliance monitoring External security/loss prevention function External stock audit function Internal compliance monitoring Internal security/loss prevention function Internal stock audit function Random checks on distribution centre picking accuracy Store detectives Test purchasing (mystery shopper) Uniformed security guards

EQUIPMENT AND TECHNOLOGY Automated ordering processes Cash protection tactics and equipment (both cash offices and tills) Company-wide stock loss awareness posters Dummy display cards in place of high-risk products E.A.S. hard tagging (recycled) E.A.S. soft tagging (disposable) E.A.S. source tagging (either disposable or recycled) Employee purchasing arrangements Employee panic alarms Employee uniforms without pockets Intruder alarm systems Non-active CCTV Point-of-sale camera monitoring Protector display cases applied by retail outlets R.F.I.D. intelligent tags on pallets, cases or items (radio frequency) Replenishment equipment to support techniques Secure lockers for employees Security-sealed containers/shippers Shoplifting and theft policy posters for customers and staff Specialist anti-theft display equipmentDESIGN AND LAYOUT Appropriate product location strategies Designing-out blind spots Designing-out crime programme Distribution centre secure storage Employees entry/exit access control External security—fences, anti-ram raid, roll shutters Risk-based design and layouts Robust anti-theft packaging Single direction product flow Supply chain and logistics network design


ED-BPM IN THE RETAIL DOMAIN CHALLENGES AND POTENTIALS FOR LOSS PREVENTION

Loss occurs on the whole supply chain Common data standards do not exist Rare cooperation between retailers and

suppliers Rare use of electronic transaction data

FactoryDistribution

CenterGoods inTransit

LocalStorage

Retail StoreReturn toVendor


ED-BPM IN THE RETAIL DOMAINTECHNOLOGICAL FOUNDATION - KNOWN SIGNALING STANDARDS

Semantics ARTS NEAR (Notification Event Architecture for Retail) ARTS Video Analytics ARTS POSlog (formerly IXRetail) ARTS SOA Blueprint for Retail ...

Infrastructure IBM Store Integration Framework Microsoft Smarter Retailing Architecture Wincor Nixdorf Store Communication Framework WS-Eventing ...


ED-BPM IN THE RETAIL DOMAIN TYPICAL IT LANDSCAPE IN THE RETAIL DOMAIN

Hard and software from different vendors

Independent IT-Systems

No common data standards between components and between enterprises

Heterogeneous system landscape



Sales-Data: x sales per hour y items per sale

Customer-Data: Customer Counter Credit / Debit

Cards Security-Data:

Electronic Article Surveillance data

RFID-tracking Customer position

tracking Video surveillance

data …...

High amount of processed Data



A variety of data pools

Rare linking of the data with regard to fraud detection

Post processing of particular data sources Video recordings Stock audit Till cash check ERP Data Customer Data

Video StoragePOS Data

Customer Counter RFID tracking

De-central data pools


ED-BPM IN THE RETAIL DOMAIN

Conclusion: A typical retail enterprise has:

a big problem with shrinkage autonomous loss prevention systems a variety of different systems a huge amount of business data

Perfect basement for ED-BPM


ED-BPM IN THE RETAIL DOMAIN THE VISION

The Challenge and the Principle of ED-BPM – Reference Model


ED-BPM IN THE RETAIL DOMAIN THE VISION

Next steps for the workpackage:

Defining use-cases for fraud detection

Identifying business processes for loss prevention which can be managed by ED-BPM

Implementing a proof-of-concept


ED-BPM IN THE RETAIL DOMAINTAKING THE EXAMPLE OF FRAUD MANAGEMENT

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1 Thomas Paulus, CITT & Hendrik Scheider, Wincor Nixdorf CITT C ENTRUM F ÜR I NFORMATIONS -T...

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