(SSA & Co.: New York)-- Shrink, a measure of the difference between the amount of goods a company should have on hand and its actual inventory, cost United States retailers more than $40 billion in 2007, according to SSA & Co. However, by changing the way they approach the problem of shrink, retailers should be able to significantly cut costs and save hundreds of millions of dollars.

“Shrink is a significant and persistent problem in the retail industry,” says Jeff Plewa, managing director of SSA & Co. “Yet many retailers continue to use the same old approach of trial and error to solve the problem. We have found that retailers often simply do not use the right data or analysis to discover the true root causes of shrink, and therefore find themselves trying to solve the problem time and time again.”

In many cases, the problem of shrink was a failure to apply and adhere to a comprehensive and disciplined approach to shrink management, such as not having the right data, relying on experience and intuition rather than facts, and not assigning dedicated resources to solve the problem. In working with its customers, SSA & Co. developed an approach to integrate lean Six Sigma tools and techniques to help companies avoid these pitfalls and achieve significant and lasting results.

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