Which is More Important, Distribution Cost to Sales Ratio or Distribution Cost Per Case?

While the accountants and Upper Management would like to have a favorable (low) Distribution Costs to Sales Ratio, I think the more relevant statistic would be the Distribution Cost per case delivered.

From that Cost per case, you can immediately relate to your Profit margin especially if you are a Distributor of goods and your biggest Cost component is your Distribution cost.

Let me know what you think.  I could be wrong.


By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below:

We Offer Consultancy Services in Logistics and Supply Chain Mgt

We offer Manila- based Consultancy Services in the field of Logistics and Supply Chain Management, to wit:

1.  Preparation of Logistic capabilities for a planned Sales Expansion;

2.  Study present Warehouse capabilities and Determine any projected Scalability problems as a result of a Sales or Physical Distribution Expansion;

3.  Planning of Pallet Layout for new warehouse including ABC classification of SKUs for ease of Putaway & Picking Routines;

4.  Specification for a planned purchase of a Warehouse Management System;

5.  Analysis of Manpower Plantilla or Determine Right-size Headcount;

6.  Work Simplification in a Logistic Environment;

7.  Software Development for the following:
      7.1 Simple Inventory System
      7.2  Preventive Maintenance Program for
               Truck Fleet with Spare Parts Inventory
                Management
      7.3  Transport Management applications requiring
                the use of GPS and Google Earth Tracking
       7.4 Inventory or Transport Management with
                Barcode Input capabilities
8.  Study on a planned Relocation of Logistic facility;

9.  Efficiency study on a Company's Supply Chain Infrastructure.

If you are interested in any of the Areas of Study above, please text "Logistics" and your full name to 0922-8831225  or email us at rjslogistics@yahoo.com.



By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below:

Internet in a Suitcase a Reality?

Just finished reading the New York Times June 18, 2011 supplement to the Manila Bulletin and in their article titled "Liberation Tech", "the Obama Administration is leading a global effort to deploy shadow Internet Mobile phone systems that dissidents can use to sidestep attempts to silence them".

The article makes further mention a group of entrepreneurs assembling an "Internet in a suitcase" while erecting alternate celltowers inside US Bases to allow dissidents access to the internet.  It also cited the case of a person who has successfully smuggled people out of North Korea and one tool to aid these people to communicate with the outside world is there are cellphones "buried in the hillside for people to dig up at night".

Internet in a suitcase courtesy of the New York Times

Interesting is the Internet in a suitcase.  May be Google can deploy them in China so people there can access uncensored the Google site.

courtesy of Libyan Youth Movement and the New York Times

From a Logistics point of view, the Flow of Information and the ability to communicate is of primary concern but it also has its huge cost component.  Imagine if the Internet in a suitcase could be designed to bypass the local telecom carriers and allow one to use Skype for calls and another way to handle data -- there  could be huge savings for the logistic company not counting the fact that the logistic company could offer other value-added services on a real time basis.

By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below:

Logistics as a Marketing Tool

Imagine that you are the biggest retailer in the Philippines and you want to locate in town of Rosario in Cavite preferably along the traffic-prone Main Highway but unfortunately, not only is there another supermarket on that Main Highway doing brisk business but there is no available vacant lot that can accommodate your hypersupermarket. What do you do?

Of course, you build your own Diversion Road that not only cuts travel time to the southern of Cavite thereby attracting moneyed motorists as the preferred route to the south of Manila but also it conveniently leads to your hypermarket.

As for the other supermarket, buyer traffic was severely affected that its viability as a store is now threatened.

The reason that I bring it up is that today I read in the newspaper that the government is building a Diversion Road leading to the eastern part of Luzon ( very progressive Nueva Ecija province) where a lot of commerce flows leading to the Northeastern part of Luzon by bypassing the traffic-congested areas of Plaridel and Baliuag towns of Bulacan.

SM Baliwag supermarket to be bypassed?  (courtesy of SM Hypermarket).

Shudder because Plaridel is where the strong Waltermart supermarket is located while Baliuag is where the relatively new SM Hypermarket is situated.

By studying the Logistic topography of your area, you could greatly influence  your Company's Sales much more than any in-store promotion could hope to achieve as in the first case above or conversely, be negatively affected by a simple Bypass road that was not there when you originally decided to build your store there.

By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below:

Cloud Computing: What is It and How Safe?

Cloud computing courtesy of NetSuite

In Manila, the past few weeks  I have noticed Net Suite touting the advantages of Cloud Computing as allowing one to lower its computing costs and more recently, Net Suite One World which would allow a company operating in different countries to pool all their data into one file using one currency rate.

Microsoft Live Platform Cloud Service  (courtesy of Microsoft)

Wikipedia explains this as such:

Cloud computing refers to the use and access of multiple server-based computational resources via a digital network ( WAN, Internet connection using the World Wide Web, etc.). Cloud users may access the server resources using a computer, netbook, pad computer, smart phone, or other device. In cloud computing, applications are provided and managed by the cloud server and data is also stored remotely in the cloud configuration. Users do not download and install applications on their own device or computer; all processing and storage is maintained by the cloud server. The on-line services may be offered from a cloud provider or by a private organization.
 
My comments on cloud computing:

If you would purchase a traditional ERP Solution (Enterprise Resource Planning), you would have to

1.  Pay an Upfront fee (which can run from P5 Million up)

2.  A Licensing Fee per workstation

3.  An Annual Fee for  Usage

In the case of a Cloud-based ERP, you would pay

1.  An Installation Fee (to be done by the software implementor) which is about P500,0000

2.  Annual Usage much lower than traditional ERP providers as the ERP software is not stored in your server.

Note the devices that can access your database (courtesy of Microsoft)

From a layman's point of view, I am concerned of the following:

1.  Since both my data and software application is stored in a server in another country (worse if that same software provider is just leasing storage space from another party like Amazon.com which leases out its excess memory storage capacity, what happens if a terrorist (like Osama Jr) decides to Nuke Amazon's server farm?

2.  What if my internet connection goes down as in the case of the time when an earthquake hit Taiwan and damaged the submarine cable connecting the Philippines with the International gateway of say MCI-Sprint in the USA thereby severing all internet connections to the Philippines?  Also, if my Internet Service Provider, my link to the International Gateway, suffers a stoppage in their operation, I also might not have access and I do not think you can easily switch ISPs at that instant.  With all my data stored in another country and with no access to it, my business could stop.


3.  Also stated on Wikipedia is that Cloud computing will allow me or my staff access to our data by using any device (Ipad, smartphone, netbook or laptop) that can connect to any web browser.  Unlike being hard-wired to a network protected by an industrial strength Security software, these mobile devices are not as secure.  Is it possible that a hacker can get my passwords from my smartphone and access all my data himself? Wow nightmare!!!!

INTERNET DOWN. How can I type 1,000 sales invoices? Where is the stock? Which one? (courtesy of creativekinesiology.com)

Imagine if my company's whole Warehouse Management System is Cloudbased and for some reason, the PLDT DSL or T1 line went down or slowed down to a crawl (which is a fairly common occurrence in the Philippines), then these might happen:

1.  Cannot nvoice our customers' sales orders;

2.  Cannot locate the stock in our 3-hectare 10-meter high 7-level Racking system with 9,000 pallet locations;

3.  If we can find the stock, my warehouseman will not know what lot number/production date to issue;

4.  Or, My boss loses his Nokia while entertaining a client in a restaurant and there is now a risk of unauthorized access to our entire database.


I will appreciate if somebody out there is more knowledgeable about cloud computing and offer to comment or correct my perceptions.

By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below:

Some Logistic Terms I Learned When I Was In The Textile Company.

courtesy of Toyota Motors

1.  JIT -  Just-in-Time To Run-out. 

     At least now we know our Stock cards were wrong.

2.  Preventive Breakdown - Self explanatory

     This is how we train our mechanics in Crisis Management, Panic
         Mode.











By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below:

The Death of the Corporate Logistics Manager. . . . Would You Ever Outsource Your Own Job If It Was Good for the Company?

I attended a talk by Mr. Jomar Hilario, Filipino Internet Marketer.  One of the ideas that struck me was his use of Virtual Assistants in the Philippines to do his internet marketing.  He claims there is no Employer-Employee Relationship (hence, no need to pay employee benefits such as social security and medical insurance) and in fact, he has not met in person some of his virtual assistants. It is cheaper to use his Virtual Assistants though he claims also to pay them about the going-rate for wages as engagement is for a minimum of 30-days.

Do I lay-off myself? (courtesy of The Office)

So, I was thinking, if I was a Logistics manager running a 300-man  warehouse facility, would I dare to recommend to my bosses to outsource me as it will be cheaper for the company?  Would I be committed to the mental asylum for thinking that way?

If I get Outsourced, can I apply with DHL?  (courtesy of DHL)

I had a talk with my friend who works with DHL Supply Chain and I asked him how can it be cheaper for a company to outsource a warehouse facility to DHL considering that he will have to pay the same wage rates a company would pay plus DHL's profit markup?

He said while at the outset there may not be savings but in the long run DHL can prove that thru Operational Efficiency, the client-company will realize savings over the long term.

If that were true, then is it the death of the corporate logistics manager?

By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below:

IBM. It's Better Manual. . . Sometmes.

Do you know how sometimes we try to think of a complicated solution for a simple problem.  The same goes for Logistics, Supply Chain or whatever you call it.

It is so easy to say lets Computerize or lets get the latest Material handling equipment available or better still, what is our competitor  using?  Let's get what they have.

But many times the solution is far simpler and much less expensive.  Take for example the need for the latest reach truck or forklift (upwards of P1.4 Million for the 3-stage Mast versions) to expedite the picking of stocks for delivery.  Have we considered:

1.  Doing an ABC classification of our stocks in laying them out in our warehouse floor?

        -  meaning, "A" goods (or SKUs) are stored nearest the Staging or Loading Area to minimize walking distance of the pickers, "B" would be the next row of pallets or racks further from the Loading Area while "C" stocks would mean stocks that are slower moving or  stocks that are Blocked piled and  issued for Bulk Orders that are not manually-picked but rather the use of forklifts are required to load huge tractor-trailers or container vans.

Minimize walking distances. Do ABC Analysis of SKUs  (courtesy of 3-b-s)

2.  For Distribution Centers or warehouses spreadout over a huge area, you might consider storing the goods according to product categories (canned, foil packs, snack, candies etc in groups of racks) and break-up the Picklist into product categories. The picklist for one category can be assigned to one picker so that his walking will be confined to adjacent racks or row of pallets while the other part of the picklist is given to another picker who will do the same.

Do you make it easy for them to pick your stocks? (courtesy of guardian.co.uk)

3.  For companies that have the luxury of a Warehouse Management System (WMS), the software contains Picking Routines (Zone, wave etc) or you can customize it in such a way to minimize the walking distances of your pickers.

Study walking patterns of your pickers (courtesy of pdcinc.us)

4.  At the very least, study how your pickers go about their picking. Minimize doubling back and unproductive acitivities.

5.  Using forklifts without doing the above will not solve your problem.It may seem to speed-up things initially until your man says I need more!

By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below:

Things You Should Know Before Your Enrol in that Logistics Class

Most of what I learned in Logistics I learned it the hard way--thru actual work experience.  I was not able to study Logistics in Singapore which my friend (who happens to be the former Supply Chain Director of one of the best know Multinational FMCG company in Manila) told me will cost about US$4,000 for a 3-week course excluding plane fare and hotel accomodations.  Nor, was I able to work in a Multinational company that had all the latest bell and whistles in Logistics (ERP, SAP WMS  and whatever letters there were).

Logistics class may be too theoretical or too basic (courtesy of melanietheteacher.pbworks.com)

courtesy of bookbyte.com

And so, I felt the need to enrol in a Logistics class in Manila.  At that time, there was only 1 school that started offering it.  Being an academe colleague, my friend offered to accompany me to the Dean of Commerce of that school so that I can ask the Dean directly to allow me to just enrol for the Logistic classes and not the under-graduate subjects anymore.

When we arrived at his office, the Dean proceeded to impress me with a stack of newly-arrived books on Logistics and he proudly announced some cost the school upwards of P10,000 for just 1 book.  I am a book-addict and I proceeded to start perusing the books.  And, I was not impressed.

I told the Dean what was wrong with the books that he purchased and why it will not help students in Manila:

This is a terrific book on Logistics. I have an earlier edition. Pricey.

 But are the other books relevant?
(courtesy of supplychainmanagementsoftware.com)

courtesy of WalMart & baselinemag.com

1.  The impressive books speak of RFID, AGVs or automative guided vehicles for warehouse picking & putaway (like robots) and computer-controlled inventory conveyor systems but these students will never see them as these systems are too expensive for any local company to purchases and for as long as labor is cheaper than in the US of A, it will never be mainstream here.

(Note:  To date, I only know of the United Laboratories or Unilab, the country's biggest pharmaceutical producer, that has an automated conveyor system operated by the defunct Diethelm Phils and now managed by First Pioneer Distribution (also owned by UniLab)

2.  Students in Manila would not know about JC Penny nor WalMart (epitome of Logistic prowess with its Own Satellite-based Cross-docked Distribution Centers that rival the size of a small town in the Philippines)  but talk about Jollibee (the Number 1 Filipino-owned Fastfood chain and one of only 2 countries wherein Mcdonalds is NOT NUMBER ONE)  and they will be interested.

courtesy of WalMart & basthatfield

3. And one of the books was too basic as to be more of a dictionary of Logistic terms than anything else.

4.  It should not be too theoretical & it should have Case Studies that speak of situations with local conditions.

The Philippines is one of the countries wherein McDonalds IS NOT NUMBER ONE. (courtesy of Jollibee)

Half expecting to be thrown out of his Office, I was surprised when the Dean offered if I would like to teach Logistics to his class. Hehehehe

Oh yes before I forget, ask also if the Instructor is a school professional (only theory basics but no real Logistic experience) or is he a Logistic practitioner from a company that practices modern Supply chain principles.

By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below:

LOOKING FOR 500-sqm Warehouse Space South of Manila

I have a client that is in need of a Warehouse Space 500 sqm

1 to 2 year Lease

Item to be stored - Packaging Materials

If you have the above warehouse space for lease, please text "Warehouse Space" and your full name to 0922-8831225.


By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below:

FOR SALE ICEBREAKER SCRAMBLE IN MALL

FOR SALE

ICEBREAKER SCRAMBLE FOOD CART LOCATED IN MALL

DIRECT BUYERS ONLY.

Icebreaker Scramble has more than 50 outlets located mostly in SM and Robinson's malls. They claim to be the best-tasting (Creamy) and the Number One Scramble outlet in Manila.  This may be your chance to own your own Icebreaker Scramble outlet.

IF YOU ARE INTERESTED, PLEASE TEXT "ICEBREAKER" and your full name to 0922-8831225.

Thank you.

By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below:

What Has Supply Chain Got to Do with Siomai House?. . . Everything!!!!

courtesy of BernaBest Food Products, Inc.

During a Food Franchising Expo at the World Trade Center in Manila, I met Mr. Amgelo Esquivel, the Sales Manager of BernaBest Food Products Incs, owners of the  Siomai House franchise, the Number One Siomai (Chinese Pork Dimsum) Foodcart  in the country with about 400 outlets throughout the country.  They are present in every major Mall and there were times that they reportedly stopped accepting Franchise applications as they could not supply the needs of their existing outlets.

As we toured together the different food cart concepts on display, I asked him how to choose a Franchise.  And this is what he said, "Before deciding on a franchise, ask them (the franchisor) about their Supply Chain (structure).  Many franchisors have started offering food cart franchises without taking into account how the product will reach the franchisees or worse, they disregard the Supply Chain altogether and let the franchisee absorb the cost of picking-up the products from the franchisor's place every day.

Here is the simple Supply Chain of Siomai House:

A Siomai House Foodcart courtesy of Berna Best Food Products Inc.

1.  To ensure consistent Quality and Supply, Siomai House imported the best Japanese Siomai-making machines (costing a couple of million pesos) and they have about 6 of them;

2.  Mr Esquivel claims to be one of the biggest consumer of shrimp for the siomia dimsums as well as for pork among the siomai foodcart franchisors;

3.  To order, the franchisees simply send an SMS (text) their orders to Siomai House and deposit their payments thru Banco de Oro (the country's largest back with the most branches and they are open on Sundays);

4.  Upon receipt of the franchisee's order and verification of deposit made, Siomai House will deliver the products direct to the franchisee's outlet.

5.  To better serve their franchisees, their main Commissary is in North of Manila with a depot in Tarlac in Northern Luzon.


By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below:

A Different Kind of Car Rental: Outsourcing of Company Cars

I remembered bumping into a guy who was in the Car Rental business except that his is not like Avis or Hertz.

He visits companies and offers to handle their fleet of corporate cars.  By doing so, the client-company is free from a number of Logistic problems:

Headaches of Maintaining a fleet of cars (courtesy of ocregister.com)

1.  Outsourcing Transportation Management of the company's fleet of cars, which is not part of their core business, frees-up Management talent and resources;

2.  Reduced Head count as no need to maintain a pool of mechanics, a custodian for a small car parts stockroom and drivers;

courtesy of planetforward.ca

No need of a Company-run  Motorpool (courtesy of panamacz.com)

3. Preventive Maintenance and repairs are now handled by the outsourcing Car Rental company;

4.  Depreciation is no longer a worry as well as setting-up a Fund to handle the cost to replace the vehicles after 3 or 5years;

5.  In the event of a car breakdown or car accident rendering the company car inoperative, there will be no loss of Management time & expense (when the manager has to commute while his car is in the shop)  as the Car Rental company will provide a Service unit till the car is repaired;

6.  No need to stock up on Tires, batteries and other consummables used by cars;


7.  Of course, the rental costs can be significant but it can be deducted from company revenues in the income statement.



By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below:

Logistic Consultancy: Doing A Warehouse Floorplan & Pallet Layout

Things that I had to consider in doing a Warehouse Floorplan and Pallet Layout , to wit:

1.  In the absence of the Warehouse Floor Plan or Engineering Drawing, Do actual measurements of the internal structure of the warehouse taking note of ceiling height (if for a Racking System or Block Pile), presence of Posts and Truss Overhangs, door openings, internal partitions or protrusions;

2.  Ask the client for Planned Partitions for the following:
     a.  Main Case Pick Area
     b. Less-than-Case Load Area
     c. Product Bundling Area
     d. Staging Area as well as Loading Bay
     e.  Product Aging Area (as when the newly-produced products need aging to attain best quality)
     f.  Quarantine Area (products from the Case Pick Area that had to be segregated due to Quality Concerns
            in the field
    g.  Office including a secured Data Processing Room including position of office equipment
    h.  Inside Parking Area for Material Handling equipment such as forklifts and pallet jacks/lifters
    i.  Battery Recharging Area for electric-powered material handling equipment
   j.  Empty Pallet Storage Area

3.  Study the Warehouse Workflow Activity inside the warehouse so that the Layout will help reduce the walking distance of personnel or travel time of material handling equipment.

courtesy of supplychainlogistics-consulting.co.uk

4.  Inspect the flooring to see if it needs to be smoothened or resurfaced with an Epoxy coating to minimize wear and impact for plastic-wheeled reach truck equipment (very expensive to replace) and have the warehouse owner's contractor or engineer present to determine the Maximum Load Capacity of the floor in case of a Racking System to be installed.

5.  Notice the openings (windows, doors, gutters etc) leading to the inside of the warehouse if additional security measures are needed (like sealing unnecessary windows) to prevent unauthorized entry.

6.  Take note of openings that will allow birds and other insects entry as this will affect the GHK Good Housekeeping) Rating of the warehouse which is often checked by multinational clients.

7.  Assuming floor stocking of pallets (one-level) determined the following:

    a.  Type of pallet jack or forklift used and the Right Angle Radius (turning circle) with load required so that
         the correct aisle width can be planned out
    b.  Type of pallet to be used.
    c.  Make provisions for sufficient Pallet Row Breaks so that the warehouse crew does not have to make a
         circuitous run-around just to crossover to the next row of pallets.


8.  Secure from the client an ABC classification of his SKUs so that in assigning pallet locations, the SKUs with the fastest movement are placed closest to the warehouse staging area for minimized walking or travel.


By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below:

The Best Time to Lose Your Assets is at Night When Your Logistic Managers are Never Around!!

Ask yourself these questions:

Watching the Time courtesy of zvuvisisrael.blogspot.com

1.  Do you check if your Logistics Head  in charge of your 1,000-sqm Warehouse  or the Operations Manager of your 3-hectare National Distribution Center is an 8am-5pm man or a 24/7-On Call type of Line Manager?

2.  Is your Logistics top honcho a Hands-on Manager or does he practice Management by Remote Control (meaning he just about delegates every critical function that he is responsible for)?

An Ops Man should FIND WAYS 

courtesy of cvresumesamples.com

3.  Can your Operations Manager or Supply Chain Head do the work of every  keyman in his Warehouse Team (excepting manual labor and driving a tractor trailer)?

I have seen Warehouse supervisors who cannot do the job of their Checkers because they are not familiar with the company's SKUs, proper procedure in stripping container vans with imported goods,  how to receive goods such as pasta that are fumigated while in-transit and other warehouse SOPs.

In the case of the fumigated vans, had the inexperienced Operations manager simply opened the fumigated van he could have put everybody's life in the immediate vicinity of the van doors in fatal condition.

If he opened a container van loaded with imported cotton bales without the presence of the appointed surveyor, he would have put into serious jeopardy any chance of his company making an Insurance Claim against the supplier.

4.  Does your Logistics Head command the respect of his Warehouse Team or do they look at him with disdain?  Can he rally the troops effectively at a time when the company needs its Christmas deliveries out ASAP?

All I know about being an Operations Manager I learned from a BOOK courtesy of informit.com & Microsoft

5.  Is your Operations Manager imaginative enough to think of innovative or avantgarde ways to solve a logistic problem or does he solely rely on standard procedures and technology ? Is his knowledge of Running a Logistics Facility solely from and by the BOOK or does he STREET-SMART Experience?


By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below:

What is Worse than Shoplifters???. . . . Employee and Managerial Theft!!!

I sometimes notice a Retail Store erect superb defenses against Theft from external elements.  They may employ the following:

Sensormatic courtesy of optephsis.gr

1.  Sensormatics (those twin electronic posts guarding Store entrances and will sound an alarm whenever an unpaid item leaves the premises);

2.  Plainclothes security guards mixing in with the customers;

3.  Oval mirrors at both ends of an aisle and at every aisle;

4.  CCTV cameras in various shapes and sizes.

But while it is good, do you know sometimes theft by your own Management and employees could be higher in value and incidence without your knowing it?  Some are funny because they call it by different names:  Shrinkage, Unreconciled stock balances/adjustments and what have you.

Rather than try to prevent or run after the culprit, they manage the loss thru statistics.  Meaning, if shrinkage is only 1% of total sales, it is within tolerable allowances (like the accounting term Allowance for Bad Debts).

security guards courtesy of cartoonstock.com

CCTV security camera courtesy of firetown.com

Sometimes Management would rather "turn a blind eye" rather than risk a confrontation with a long-tenure manager or fight with the union steward, in case the company is unionized.
 
 How does Logistics fit in all these, you may ask?  A lot because Logistics can be used as the best tool for your Security and Executive Management in monitoring malfeasance by your own employees, to wit:

1.  A well-laid out stockroom or warehouse floor set-up will make any SKU (stock-keeping unit or distinct inventory item) stand-out if something is wrong (a carton of expensive wine or spare parts is missing);

2.  A Cycle Count Program supplemented with Surprise Inventory Count will spot inventory variances and keep your warehouse personnel on their toes;

3.  A well-defined Supply Chain Structure with proper documentation provides a means to ensure compliance in securing the company's assets;

Supply Chain Flowchart courtesy of bondlogistics.com.my

4.  A  LogisticWarehouse Management System or a less-expensive simple Inventory program will force everybody to always reconcile with the stock balances per computer database;

5.  Even something as simple as a Pallet Height/Pallet Stacking Standard per pallet per SKU will alert an auditor if anything is not right;

6.  Supply Chain Performance Measures applied to Inventory assets and to warehouse personnel evaluation will spot problems early.

Well-laid out Warehouse courtesy of inventoryandsoftware.com

7.  Adoption of RFID or the more familiar Bar Code readers to document every movement of every SKU will make it difficult to hide discrepancies.

8.  In the end, all these technology will be for nothing if we do not make sure we hire right Logistic personnel to handle our Assets.

By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below: