Transcript CITT-Haifa-2009-Retail_Fraud_Paulus

CITT
CENTRUM FÜR INFORMATIONS-TECHNOLOGIE TRANSFER GMBH
ED-BPM in the Retail Domain
Taking the Example of Fraud
Management
Thomas Paulus, CITT & Hendrik Scheider, Wincor Nixdorf
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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
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Thomas Paulus, CITT & Hendrik Scheider, Wincor Nixdorf
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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
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crime
administrative error, and
wastage
Thomas Paulus, CITT & Hendrik Scheider, Wincor Nixdorf
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ED-BPM IN THE RETAIL DOMAIN
FIGURES ON GLOBAL SHRINKAGE
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The Global Retail Theft Barometer 2008:
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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
All Retail Industry
Customer
Staff
Suppliers /
Service
Organisation
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Source: http://www.retailresearch.org/theft_barometer/index.php
Thomas Paulus, CITT & Hendrik Scheider, Wincor Nixdorf
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ED-BPM IN THE RETAIL DOMAIN
METHODS EMPLOYED AGAINST SHRINKAGE
PROCEDURES AND ROUTINES
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Annual stock loss awareness campaign
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Company-wide stock loss refresher training
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Customer returns & refund controls (operator and customer database)
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Damaged goods resale controls
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Employees exit searches
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Hot product identification
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Hot product management
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Hot products routine counting
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Security newsletter
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Internal key control
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Patrol routes for employees (red routes)
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Point of sale information or data checks
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Random till cash checks
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Rigorous delivery checking procedures
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Shelf replenishment techniques
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Induction training for new employees
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Unique till operator PIN numbers
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‘Watertight’ product monitoring procedures
PEOPLE AND PROCESSES
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Anonymous phone line
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Civil recovery
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Covert surveillance of customers or employees
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Employee awareness and training
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Employee stock loss training and education
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Employee incentives—discount purchase schemes
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Employee incentives—stock loss bonus schemes
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Employee integrity checks
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External compliance monitoring
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External security/loss prevention function
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External stock audit function
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Internal compliance monitoring
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Internal security/loss prevention function
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Internal stock audit function
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Random checks on distribution centre picking accuracy
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Store detectives
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Test purchasing (mystery shopper)
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Uniformed security guards
EQUIPMENT AND TECHNOLOGY
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Automated ordering processes
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Cash protection tactics and equipment (both cash offices and tills)
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Company-wide stock loss awareness posters
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Dummy display cards in place of high-risk products
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E.A.S. hard tagging (recycled)
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E.A.S. soft tagging (disposable)
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E.A.S. source tagging (either disposable or recycled)
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Employee purchasing arrangements
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Employee panic alarms
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Employee uniforms without pockets
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Intruder alarm systems
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Non-active CCTV
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Point-of-sale camera monitoring
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Protector display cases applied by retail outlets
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R.F.I.D. intelligent tags on pallets, cases or items
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(radio frequency)
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Replenishment equipment to support techniques
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Secure lockers for employees
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Security-sealed containers/shippers
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Shoplifting and theft policy posters for customers and staff
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Specialist anti-theft display equipment
DESIGN AND LAYOUT
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Appropriate product location strategies
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Designing-out blind spots
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Designing-out crime programme
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Distribution centre secure storage
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Employees entry/exit access control
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External security—fences, anti-ram raid, roll shutters
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Risk-based design and layouts
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Robust anti-theft packaging
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Single direction product flow
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Supply chain and logistics network design
Thomas Paulus, CITT & Hendrik Scheider, Wincor Nixdorf
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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
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Factory
Distribution
Center
Goods in
Transit
Local
Storage
Retail Store
Return to
Vendor
Thomas Paulus, CITT & Hendrik Scheider, Wincor Nixdorf
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ED-BPM IN THE RETAIL DOMAIN
TECHNOLOGICAL FOUNDATION - KNOWN SIGNALING STANDARDS
Semantics
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ARTS NEAR (Notification Event Architecture for Retail)
ARTS Video Analytics
ARTS POSlog (formerly IXRetail)
ARTS SOA Blueprint for Retail
...
Infrastructure
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IBM Store Integration Framework
Microsoft Smarter Retailing Architecture
Wincor Nixdorf Store Communication Framework
WS-Eventing
...
Thomas Paulus, CITT & Hendrik Scheider, Wincor Nixdorf
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ED-BPM IN THE RETAIL DOMAIN
TYPICAL IT LANDSCAPE IN THE RETAIL DOMAIN
Heterogeneous system landscape
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Hard and software
from different
vendors
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Independent ITSystems
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No common data
standards between
components and
between enterprises
Thomas Paulus, CITT & Hendrik Scheider, Wincor Nixdorf
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ED-BPM IN THE RETAIL DOMAIN
TYPICAL IT LANDSCAPE IN THE RETAIL DOMAIN
High amount of processed Data
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Sales-Data:
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Customer-Data:
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Customer Counter
Credit / Debit
Cards
Security-Data:
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x sales per hour
y items per sale
…...
Electronic Article
Surveillance data
RFID-tracking
Customer position
tracking
Video surveillance
data
Thomas Paulus, CITT & Hendrik Scheider, Wincor Nixdorf
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ED-BPM IN THE RETAIL DOMAIN
TYPICAL IT LANDSCAPE IN THE RETAIL DOMAIN
De-central data pools
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A variety of data pools
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Rare linking of the data with regard
to fraud detection
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Post processing of particular data
sources
 Video recordings
 Stock audit
 Till cash check
Customer Counter
RFID tracking
POS Data
Video Storage
ERP Data
Customer Data
Thomas Paulus, CITT & Hendrik Scheider, Wincor Nixdorf
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ED-BPM IN THE RETAIL DOMAIN
Conclusion:
 A typical retail enterprise has:
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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
Thomas Paulus, CITT & Hendrik Scheider, Wincor Nixdorf
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ED-BPM IN THE RETAIL DOMAIN
THE VISION
The Challenge and the Principle of ED-BPM – Reference Model
Thomas Paulus, CITT & Hendrik Scheider, Wincor Nixdorf
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ED-BPM IN THE RETAIL DOMAIN
THE VISION
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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
Thomas Paulus, CITT & Hendrik Scheider, Wincor Nixdorf
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ED-BPM IN THE RETAIL DOMAIN
TAKING THE EXAMPLE OF FRAUD MANAGEMENT
Questions / Answers?
Thomas Paulus, CITT & Hendrik Scheider, Wincor Nixdorf
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