ACL Success Story – Retail – Food Lion LLC

 2011-05-01

Food Lion LLC

“With ACL technology, we can now choose stores based on weighted risk factors, which results in more effective scheduling and timely audit planning. The application runs within seconds and provides stores with a level of detail that had never been seen before in one report. It’s as simple as one mouse click.”

Danielle Kragnes, Internal Audit Supervisor, RLI Insurance

Food Lion is one of the leading supermarket chains in the U.S., with 1,200 stores and more than 73,000 employees. To minimise business risks and maximise revenues, the internal audit department created a store audit risk assessment tool using ACL technology. In mere seconds, the automated application classifies stores based on weighted risk factors – allowing more efficient audit scheduling and giving management valuable insight into company-wide risk exposures.

Customer Profile

Founded in Salisbury, North Carolina in 1957, Food Lion LLC is a member of Delhaize America, the U.S. division of the Brussels-based Delhaize Group. Food Lion is one of the largest supermarket chains in the U.S., with 1,200 stores in 11 Southeastern and Mid-Atlantic states and 73,000 staff associates. Company stores sell more than 28,000 different products, including a growing number of private label products manufactured and packaged exclusively for Food Lion.

Applications

Food Lion uses ACL technology to monitor and analyse risk factors throughout its chain of retail stores.

Challenges

With retail stores located in 11 states, the Food Lion internal audit department needed an efficient and effective way to conduct individual store audits. In the past, the team performed several compliance-based store audits, visiting each retail location at least once a year. These store audits were scheduled based on varying criteria, including random sampling, management requests, or other indicator data.

In 2003, the Food Lion internal audit department developed a Total Store Audit (TSA) program to establish consistent audit standards and approaches. The company needed a reliable risk assessment solution that would select stores based on weighted risk factors and specific criteria in order to effectively audit all 1,200 locations. The objective was to provide standard data reviews for the audit committee, produce comparable results across global locations, and report performance at the group level. This new TSA program takes three days per store location, focuses on core audit areas, and eliminates less significant procedures.

Solutions

The Food Lion internal audit team used ACL technology to implement and run a Store Audit Risk Assessment application that quickly identifies the most susceptible stores based on weighted risk factors. The audit team worked with management to select these factors, which include:

  • Food safety
  • Last audit date
  • Falling store sales
  • Decreasing customer base
  • Human resources
  • Regulatory/compliance
  • Operational inefficiencies/fraud indicators
  • Prior audit results
  • Customer satisfaction

The ACL application exports store numbers from source data, based on the subjectively ranked risk exposures. Now, the internal audit team can quickly pinpoint stores with the highest degree of risk. The result is more timely, effective, and efficient audit planning.

Results of the ACL analytics are also used to provide business management departments, such as Marketing and Loss Prevention, with detailed reports that outline in-store risk exposures, without disclosing sensitive information about the store audit schedule. Using ACL technology, Food Lion has enhanced its business controls and gained critical transparency into its retail operations through targeted risk assessments.

Results

Food Lion makes innovative use of ACL technology to:

  • Analyse in-store risk factors based on customised weighted criteria
  • Compile comparative data to help schedule individual store audits in a timely manner that reflects potential business risk
  • Provide business management departments with detailed reports that outline existing risk exposures in each retail location
  • Maximise business efficiencies and provide enhanced customer service
Sunday, May 1, 2011 In: Client Success Stories, Hot Topics Comments (None)

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