Shrinkage is the term used to describe the reduction in actual quantities of items in stock, in process, or in transit. The loss may be caused by scrap, theft, deterioration, evaporation, etc. Shrinkage can have a significant impact on a company’s bottom line and is, therefore, a key concern for logistics managers.

There are a number of strategies that can be employed to minimize shrinkage, such as:

  • Improved security measures (e.g. CCTV, security guards).
  • Improved stock control procedures (e.g. regular stock audits).
  • Improved packaging and handling procedures.

By implementing these and other measures, logistics managers can help to reduce the incidence of shrinkage and its associated costs.

Related Links

Shrinkage – Supply Chain, Logistics and General Business
Supply Chain Management: Inventory Shrinkage
Supply Chain News: Inventory Metrics Part 3: Shrinkage – Into Thin Air; Supply Chain News: Inventory Metrics, Part 3: Shrinkage — Into Thin Air
Shrinkage EN – Base Logistics
Inventory Shrinkage – Even the Best Don’t Do All of These

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