Often we react without fully understanding the problem or identifying the cause. Data mining is a tool used to discover patterns within large data sources and provides statistics to assess performance.
Lodge Security Services uses Data Mining as a process to extract information from retail variance data and transform it into an organised, logical structure for practical use.
- Statistical Analysis (shrinkage comparison by store, region and nationally)
- Cluster Analysis (shrinkage by department, category and SKU)
- Anomaly Detection (identifying shrinkage sensitive products)
- Rule of Association (shorts and over’s)
- Root Cause Analysis (capturing errors, process failure, supplier fraud or theft)
- Visualization (the big picture)
Your first step in increasing your profit margins and reducing loss is to understand what it is, where it is and what causes it. Once you know this, your solutions will target the root cause(s) and be more effective.