Академический Документы
Профессиональный Документы
Культура Документы
White Paper
Sarit Dey
Sarit Dey is a Managing Consultant in the Global Consulting Practice at Tata Consultancy
Services (TCS) and works as a Business Architect. Sarit has more than 14 years'
experience advising senior management at global companies in improving their
business processes in the areas of retail supply chain, inventory management, retail
merchandising, planogram implementation, store operations, and manufacturing. Sarit
has a Master's in Management from the Indian Institute of Management (IIM) Calcutta
and a Bachelor's in Engineering from the Bengal Engineering and Science University
Abstract
A sale is the culmination of the combined efforts of a retail operation's various moving parts.
And the store is where the magic happens. So excellence in store operations is necessary for a
retailer to be able to provide great customer service. The merchandise component of the
operation is underpinned by a solid supply chain.
This paper looks at some of the key challenges in store operations and how retailers can
counter them to provide their customers a better experience. Retail organizations can realize
benefits from optimizing processes such as freight processing and shelf-stocking. At the
customer service end, ensuring a smooth checkout process will make for satisfied and
returning customers, the ultimate goal of any retail operation.
Contents
Stocking
Merchandising
Handling Freight
Recovery
Checkout
5
Figure 2 represents the various aspects of store operations, based on our experience with several retailers.
25% 100%
20% 80%
15% 60%
10% 40%
5% 20%
0% 0%
Management Customer Registration Support activities Freight POG setting Cleaning and
Service Processing Maintenance
Maps out the complete process steps and determines the key steps that are important to the customer.
A value stream analysis This allows the retailer to improve the customer touch points and reduce activities that require effort
but do not add value to the customer.
Reduces motion, lead time, and helps train associates in 'eyes for flow' and 'eyes for waste' concepts,
Lean principles
speeding up the steps of scanning and bagging.
Pinpoints distinct causes for customer satisfaction or dissatisfaction. Aggregating this data and using
market-specific information helps identify best practices as well as deviations in practices due to
Analysis of store data
localized factors in a given group of stores. This helps project teams identify the right causes and help
come up with solutions.
Techniques such as 'Failure Mode Helps identify issues in the checkout process and focus attention on the process steps that need to be
and Effects Analysis' improved for a better customer experience.
7
Start
Current Chain
Analyzing the steps presented in Figure 3 and completing a Lean Six Sigma analysis should help identify
opportunities to improve customer satisfaction. Some such opportunities may include:
n Reducing scanning and bagging time by implementing a standard process using best-in-class scanners and
training staff effectively
n Implementing standardized processes for collecting customer information to avoid collecting the same
information multiple times, thus reducing customer interaction time at checkout
n Encouraging customers to follow efficient practices, such as keeping coupons ready when they are in queue,
and encouraging customers to swipe their credit cards early in the cycle to reduce payment times
n Enabling the cashier to search for prices and product locations easily without having to call for backup, thus
reducing transaction times
n Using techniques such as line-busting (where store associates help customers using hand-held ordering and
checkout devices), especially during peak periods
n Designing point of sale (POS) systems to enable easy interaction with smartphones for faster checkout
In a modern retail environment, such improvements can be achieved with a combination of improvements in
systems and processes to enable long-term benefits.
8
Improving Freight Processing Time
Figure 4 shows the key steps involved in the freight processing process. It is important for retailers to manage the
process efficiently to optimize costs.
Freight processing is probably the most important behind-the-scenes activity in a retail store. If freight processing
is delayed, stores have low in-stocks (inventory) and 'visual outs' (empty spaces) that result in lost sales and
unhappy customers.
The process should allow for:
n Fast Freight Processing: Freight processing needs to be quick and accurate to give customers a seamless retail
experience. Fast unloading of the freight reduces waiting times for trailers and the associated charges as well as
delays in subsequent deliveries.
n Efficiency: The optimal amount of effort needs to be planned for the freight processing activity to be completed
efficiently. Improper planning often leads to incomplete tasks and delays in freight processing, leading to low
stocks and lost sales. Freight should be organized by lean principles (such as grouping similar categories
together) while it is being unloaded to ensure smooth flow, fewer touches, and easy sorting on the store floor.
n Productivity: Freight processing teams usually have high attrition. Retailers need to ensure new team members are
trained in using the relevant technology so that productivity is maintained even as new members join the team.
9
Lean Six Sigma Techniques to Improve the Freight Handling Process
The goal of freight processing is to drive sales by ensuring store shelves are full. In addition to ensuring the optimal
amount of effort is spent and process compliance is high, some of these key Six Sigma and Lean techniques can
help retailers:
Value stream analysis n Conduct value stream analysis and remove steps that do not add value to the exercise.
n Conduct time and motion studies to assess the effort spent on specific tasks and benchmark these
Time and motion studies against competitors. Even internal benchmarking of best practices will increase competition between
stores, leading to reduced freight-handling times.
n Streamline tasks such as cutting through boxes, handling trash after stocking shelves, and re-packing
Streamline Tasks
boxes so that they are not too effort-intensive.
n Use work-balancing to create standard operating procedures (SOP), helping operating managers balance
Work-balancing
workloads and handle sales executive teams effectively.
n Follow Lean principles when sorting merchandise after unloading them from trucks. This will ensure that
they are touched the least number of times before being placed on shelves.
n Keep the freight mobile as much as possible to ensure the least setup time in moving freight from one
Lean principles
location to another.
n Label boxes from the distribution center accurately and map the corresponding labels right to the store
aisles. This information will help store associates accurately keep track of inventory flow
Improving the process with the above set of guidelines will reduce the effort required for freight processing. It will
also help stores increase process compliance and ensure regularity of stock, thereby improving customer
satisfaction.
10
An efficient planogram process helps retailers gain more market share and be competitive by staying ahead of the
pack. Figure 5 describes the planogram process and highlights the key steps in executing a planogram efficiently.
13