OPERANNG OPPORTUNITIES

WALLY LYNCH Paid Associates PO. Box 741623 Dallas, Tx.75243

! venV once in a while. routinely availh able statistics couple with an obscure news story to create a synergistic opportunity worth sharing. But first, a little background.

Anyone in this business charged with bottom line responsibility during the last 10 years has been faced with the enigma of "cost of goods gone." In our trade, it's shrink, theft, error, damage, etc. The lion's share of the problem has long been identified with employee theft, both blue and white collar.

All of us at various conventions and seminars have been exposed to a parade ofconvicted felons telling us how to cope with the problem. As more stringent preventive steps. the polygraph and/or the sophisticated detective agencies were employed. Some firms began honesty testing for new employees.

In the process lots oflitigation and lots of dollars generated the outlawing ofthe lie detector test in some 20 states and the realization that no "system" could for long foil the determined and/or clever thief. The "cost ofgoods gone' ' was perhaps bent but not broken.

The obscure appeared as a news item about a year ago inthe Wall Street Joumal, in the last paragraph of an article, bylined Thomas F. O'Boyle, on using honesty tests to gauge workers' morale. In his research the author had uncovered a company so frustrated by 'cost of goods gone' ' that it used a technique not envisioned by the creators of the honesty test with enormously gratifuing results.

They gave the test to all employees. Then they explained how the resuls could be graded so that each ofthe participants could evaluatc his own score. This exposure and the process ofselfcorrection, according to the article, generated an immediate two-thirds reduction in inventory theft.

Researching the "test" took a while, but I discovered that the salient leatures are it is inexpensive, costing fi to $20 per employee, rates 92% accurate, is absolutely non- discriminatory. meets EEO and FETC requirements, takes an hour to complete and five mlnutes to score.

Coupled with the f-acts, the obscure news story gave a clear message. Here was a way to meet legally, head on and inexpensively inhouse a universal problem.

The routinely available figures on sales and thcft are enorrnousin the trillions for retail and in the billions for theft. This old head isn't able to express them numerically, much less comprehend their meaning, but a friendly math professor at a local college provided the interpretation that was needed when he identified theft from retailers on average at 3.8% of sales. The National Retail Merchant's Association (NRMA) sub-divides the problem further. Thcy state that their reports indicate the "cost of goods gone" consists of 45% employee theft 35 % customer theft and 2O% generated by krokkeeping fraud and enor. For most merchants thesc costs exceed pre-tax profits.

A good way to gauge the cost effectiveness of company wide testing is to compare last year's pre-tax profits with the product of $20 times the number of employees. For most companies the relationship exceeds $1000 to $1.

There are precious few things that any of us can do for so little investment of time and dollars that appear to pay such largc dividends. If you would like more information write for Honest Tesring Pamphlet, P-10.

From the conception of your project until its completion, San Antonio Pole Construction's expertise ensures that what you need and want is what you get.

San Antonio's decades ofexperience provide the know-how to perfectly tailor the building concept you choose for your pxticular needs. Our buildings are fenowned for the efficiency of their layout and the productivity they add to a company's opefation.

The building shown here is one of four we're erecting for Rialto Lumber Company of Rialto, Ca. They include an 8,000 square foot home cente! plus a 6O' x 160' pll.wood stofirge building, a three-sided

30'x 2OO'storage building with a second floor (shown) anda 22' x60' saw shed.

You can rely on San Antonio to erect the building that is best for you.

Mike Esposito, mgf.

1280 unit F-l

West Lambert Rd. Brea, Ca. 92621

(2r3) 694-436r

(7141529-779,0

P.O. Box 136

Grimes, ca.95950

(916) 437-2303

FRED

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tors describe convention olans slated for Nov.

6 and 7. at thc Broadmoor Hotel, Colorado Springs. Co.

Thc board started with a clean slate to try to improve the program so that dealers can get a good return on their investment by coming. One key change made this year is the tightening ofthe agenda. The program will be condensed to two davs.

The convention goal is to provide education and management tools to help dealers meet their business goals. The agenda includes: "Sales and Invcntory: How to Maximize Profits." Kent McSparran, Denver Managcment Group; "Selling Against Price Competition," Jerry Attridge. formerly of Manville Corp; "Rewarding for Results," Jim Pence; ' 'Meeting the Challenges of a Changing Economy," Morton Marcus. and "Change: Its Effect on Merchandise and Systems Management," Frank Denny, Builders Square.

A ncw format combines the best of dealer convercation and information sharing with displays and demonstrations of management tools. An evening session will feature computers. publications, education programs and other r.nanagcment suppoft tools presented by dealers who have volunteered to be resource persons.

"The more people involved, the better," said board member Steve Olson. Build-Rite Lumber and Supply, Rawlins, Wy.

The Southland

(Continued from page 24) to allow you the opportunity of a "hands on" demonstration. Some local yards will be available for touring.

On Saturday legislative matters will be discussed. Ken Bode will speak on "What the Insider" thinks about the national elections: Bill Sharp, nationally recognized trainer, will talk on new techniques in training people.

Naturally, artfully inserted between these business sessions are some opportunities for associating with your peers in thc industry. Appropriate spouse programs have also been dcveloped.

In Novcmber we have the always popular Palm Springs management conference conducted by LASC.

The dates are Nov. 13-15. This year we will meet at the Marquis Hotel. It appears as though the change may have been fortuitous because the Spa Hotel suffered extensive damage in the recent earthquake in Palm Springs.

"Cycling Through the 80's" is the theme for the 1986 Conference. And the committee didn't mean by birycle. Just think back to the market and you will get the picture very quickly.

Phil Butterfield and his committee have done an excellentjob ofpuning together a well rounded program.

Credit sessions for both wholesale and retail will be conducted; including the chief economist for Bank of America speaking; an insurance breakfast;a 2ndGrowthpanel,this year covering handling stress; a Hall ofFame panel, and the keynote speaker Dan Nimer, talking on "Creative Pricing For More Profit."

You can't afford to miss these meetings. Mark your calendar now and be all ready to frll out the reservation forms when thev land on your desk.

See you there.