Backdoor Receiving Is A Cornerstone Business Function

Larry MillerArticles

Backdoor receiving is a cornerstone business function that must include consistent and disciplined shrink loss control and store operations practices. Every supermarket has supplier groups delivering goods that must be received. These include: the main or central wholesaler that supplies the majority of product needs, secondary suppliers and Direct Store Delivery (DSD) vendor companies that supply direct delivered products. Each of these suppliers cause their own unique shrink loss opportunities that must be addressed.

Receiving errors, theft, misdeeds and inefficiencies accounted for 7% of the total store shrink in the average respondent supermarket for a loss of $35,884 annually. Of this amount, 57% of all backdoor receiving shrink was attributed to receiving “errors” and 43% was attributed to vendor and/or receiver “dishonesty”.

The ten-year trend of companies utilizing automated DSD receiving technology was capped-off in this 2011 survey as 100% of all responding companies now report using automated DSD receiving technology.

There were five backdoor-receiving loss-prevention methods that had the most measurable effect on reducing store shrink in 2011. Companies with these programs reported 36% less receiving shrink, fewer incidents of vendor errors and vendor dishonesty. These loss prevention methods were:

  • Top performing companies conduct Receiver re-training every 6-12 month.
  • Top performing companies rotate backdoor locks every 6 months.
  • Top performing companies have formal, written Receiving Practices coupled with an internal audit function to assure compliance.
  • Top performing companies have strict inventory control limits on vendor backstock.
  • Top performing companies periodically use replacement Receivers for 1-2 weeks at a time to discover and/or disrupt shrink causing activity or practices.