Article | April 3, 2018

Auditing: An Essential Tool For Any Effective LP Program

By Mike Keenan, CPP, CFI, LPC, Managing Director, Retail Loss Prevention at TAL Global Corporation

Wren Audit

By monitoring execution and correcting identified deficiencies throughout the year, you can improve compliance, control loss, and keep both employees and customers safe.

Early in my career, I heard a quote that I found to be consistently accurate.  “A well-run facility equates to low shortage.” But how do you ensure that a facility is running well?  By “inspecting what you expect” with an effective LP audit program. An LP audit program enables you to monitor store, DC, and fulfillment center compliance to loss control policies and procedures on a periodic basis. 

Two Keys to a Successful LP Audit Program

The two keys to a successful LP audit program; the first key is objectivity. The audits must give an accurate picture of what is actually happening in a facility.  If they don’t, they have limited value.  In order to correct issues, you must know what they are.  Auditors must be able to objectively report their findings.  Of course, that makes sense, but it doesn’t always happen.  Here’s why.  If the person who conducts the audits reports directly to a person in company leadership who is responsible for running the facility, can they truly audit objectively?  Will the LP auditor worry about jeopardizing their relationship with their boss?  Ideally, your LP auditors should report independently from the people who run the facilities they are auditing.  However, if that is not the case, make sure that company leaders understand why LP auditors must be objective.  The goal is to improve results not find fault with individuals unless those individuals are not performing as expected.  And if they are not performing as required, leadership will want to know that.