Given their breadth of services, position as the number one provider of prescriptions in the nation and commitment to superior customer service CVS invests in new stores and technologies to drive future growth. Yet with growth comes the risk of increased shrink opportunities as Larry Foster, Director of Loss Prevention Forensic Analysis for CVS/Pharmacy indicates. In his role Larry provides the overall direction and management of Loss Prevention (LP) systems implementations and analysis.
According to Larry, “CVS needed a robust transaction monitoring application that was capable of growing with our needs. The strategy involved developing a data solution across multiple business functions to drive profitability.” Sensormatic® Analytics powered by Retail Expert offered CVS a comprehensive suite of business intelligence solutions capable of integrating across multiple business areas to include LP, Store operations, Pharmacy operations, Marketing, Merchandising, Sales/audit, Bank reconciliation, Treasury and Compensation.
To reduce shrink and improve operational performance, CVS internally branded the solution as VIPER. They created a strong partnership with Retail Expert to design modules that integrated all transactions including their point of sale, pharmacy dispensing system and pharmacy inventory as well as front store perpetual inventory transactions -- and even their direct store delivery information. With all of these information elements included in VIPER, CVS is able to extend their ROI and reduce shrink throughout the store, not just at the point of sale.
Managing sales reducing activities (i.e. voids, returns, coupons, etc.) were critical for CVS to increase sales, manage and control inventory loss and improve inventory service levels. The VIPER suite addressed sales reducing activities by monitoring and trending these transactions as Key Performance Indicators within VIPER. Each of these indicators is analyzed across the organizational structure of the company and in some cases by vendor. VIPER is able to intelligently identify those transactions that are outside the norm and require further investigation. As a result CVS was able to dramatically reduce the use of sales reducing activities and effectively increase sales and reduce shrink.
As Larry explains, this unique system design offers numerous benefits, “not only does VIPER give us visibility to performance surrounding our Point of Sale system at a high level, but also we are able to see activities within the four walls of our stores.” He added, “With the Pharmacy Dispensing and Inventory modules we are able to reveal activities that indicate potential loss or operational deficiencies, and have the ability to analyze these results by the specific drug classes. This information enabled us to reduce the basic errors that occur with the complicated prescription drug process. Also, we have been able to identify inventory loss associated with these high risk drugs.”
Through a pharmacy case study CVS learned first-hand the ROI of VIPER in protecting high risk drug inventory. Results revealed how the VIPER suite identified several pharmacy inventory transactions that required further investigation.
Looking ahead VIPER offers growth potential to provide powerful solutions across the company. CVS plans to continue extending the benefits of VIPER to other areas that represent significant expenses such as the warehouse and even supply processes. By integrating intelligent technology like the Sensormatic Analytics suite into their LP program CVS achieved a 1000% return on investment.