How a data-driven company was molded by asset protection

A data-driven company tends to outperform its competitors, but the asset protection process rarely drives continued evolution of analytics capabilities. Grocery chain Weis Markets is the exception.

Five years ago, when Mike Limauro joined the supermarket chain Weis Markets, based in Sunbury, Pa., he knew he had an opportunity to change the way the company looked at asset protection.

A software system used to manage this area of the business was soon not going to be supported by its vendor. As the vice president of the company's asset protection department, it was Limauro's job to replace the system. He used the opportunity to find new ways for Weis to be a data-driven company.

At typical retail businesses, asset protection is all about identifying areas of loss. Data comes into play only when looking at inventory lists and comparing them to product orders to identify any discrepancies. But when Limauro came to Weis, he implemented a new tool from Profitect Inc. that takes a more prescriptive approach to analytics. Limauro has fed in data from many previously unused sources, such as billing, inventory and customer data. Now, he said, the company can use the tool to help it do things such as set prices more efficiently, improve shelf allocation and reduce waste from spoiled food.

Limauro said it was important to show each department at Weis that asset protection isn't there just to make sure the inventory numbers at all of the company's stores add up, but that his department can also help them operate more efficiently. The new approach "creates a much bigger picture," he said.

Mike LimauroMike Limauro

Usually, according to Limauro, the use of traditional exception-based reporting tools -- which review data from point-of-sales systems but don't do full-fledged analytics -- is limited to a small number of people in a retailer's asset protection unit. But at Weis, Limauro has pushed the new asset protection analytics tool to about 600 users throughout the company. The software is used not only by workers in his department, but also by store managers and front-end business managers.

Taking it up a notch on analytics

Within Limauro's team, staff members use Profitect to monitor data sources, looking for patterns and anomalies in inventory and pricing. They also use the system to create reports and identify likely causes of waste.

"When we identify an issue that causes us margin erosion or profit loss, we have somebody on staff that reverse engineers everything that goes wrong," Limauro said. "If it happens again, we know about it immediately."

There was a point in time when we had to sell the benefits of the tool. It was a matter of selling what we can do to get people to use it.
Mike Limaurovice president of asset protection at Weis Markets

As word of the new approach to asset protection spread throughout the company, more departments came to Limauro asking for help. For example, he recently fielded an inquiry from a member of the company's pricing department who was wondering if he could analyze product pricing to see if there was untapped demand that could make certain products more profitable. This isn't the typical domain of asset protection, but because of the broadened focus Limauro brought in, it was something he could handle.

"The real progressive folks were thinking, 'We're an integral part of the business.' We wanted to add value to the company," Limauro said, rather than just prevent losses.

Bumps in the data-driven road

That doesn't mean implementing the analytics tool was an entirely smooth process. Limauro said some department managers felt uncomfortable about embracing his team's recommendations because they thought that the insights being generated by the system should have been coming from inside their own operations. Others weren't comfortable with the new, more data-driven approach.

To counter this problem, Limauro held training classes to explain the features of the Profitect tool, and he partnered with "champions" in various departments who bought into the tool and helped convince more reticent co-workers. Ultimately, though, the main thing that created buy-in was success. Limauro said people who were once skeptical came around after they saw their department's profit numbers go up or the amount of food shrinkage decrease.

"There was a point in time when we had to sell the benefits of the tool," Limauro said. "It was a matter of selling what we can do to get people to use it."  

Although Limauro didn't share a specific return on investment number, he said that since Weis has been using the tool, food waste has gone down and profitability has gone up. He added that his new approach to asset protection also has helped change the way his department is perceived at the increasingly data-driven company and made it a more central figure in business operations.

Ed Burns is site editor of SearchBusinessAnalytics. Email him at [email protected] and follow him on Twitter: @EdBurnsTT.

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