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Retail Operations – Important ?

“Retail Operations involves managing the day-today functions of retail establishments like department stores, grocery stores and specialty shops.”

• Location considered the most important aspect • Poor operational practices - cause for problem • Slack et al (2001)


• Key elements • Gross Margin Return on retail space • Net Margin Return on retail space • Relative complex to apply on shop floor Balance Scorecard SLIDE 3 .Balanced Scorecard • Performance Management and Subsequent Improvement • Tracking the performance of a firm from – • Financial Perspective • Customer Perspective • Internal Business Perspective • Innovation and Business Perspective • Applicable at the level of the firm. trying to apply at level of the store (for retail) Strategic Resource Management Model • Developed by Ring et al.

Problem Solving Tools & Techniques Popular Tools Benchmarking Customer Satisfaction Other Basic Tools Pareto Analysis Cause and Effect Analysis SLIDE Why-Why Analysis 4 .

Megicks’ 6 Retail Clusters Merchandise & Range Unique Products Service & Quality Lines Local Involvement Active Marketing Low prices & incentives SLIDE 5 .

Root cause of problem • What is going wrong. when. why and how • Problems around 5 Ms  Machinery  Manpower  Materials  Methods and  Money • This forms the basis for the development of Ishikawa Model SLIDE 6 .Cause-Effect Diagram • Fishbone diagram.

Adapted Ishikawa Model • Used the Ishikawa Model • Need for Simplicity • Ability to actually use the tool • Final 5 elements – 5S SLIDE 7 .

retention and satisfaction defines success of a retailer Example – Sears Roebuck “Rebuilt the company around Customers” Re-engineered Store operations Eliminating unnecessary tasks Removing administrative burdens Scheduling workforce as per customer demand Focus on drivers of Staff Attitudes and Behavior SLIDE 8 .Shoppers’ Benefits Customer attraction.

Five S Model Standards Space Systems Stock Staff SLIDE 9 .

Stock Standards Space Systems Stock Staff • Right quantity at Right time @ Right Price => Profit • Monitoring local competition • Future stock planning • Excess Stock Problems  Cash flow problems  Markdowns  Damages • Lack of Availability => Customer Loss • Higher the no. of SKUs more critical the component SLIDE 10 .

but also to protect damage sales • Non-selling Area management –  Fitting rooms  Cash desk  Queuing methods  Refund/return areas 11 SLIDE . design and merchandising => Critical Success Factors • Best selling space – fast stockturn • Not only increase sales.Space Standards Systems Space Stock Staff • Optimum space utilization • Entice customer • Layout.

Staff Standards Space Systems Stock • Two extremes – catalogue stores and high contact retailers • Key Interfaces –  Measure customers  Suggest styles and patterns  Replenish stock Staff  Patrol parts and protect store 12 SLIDE .

Systems Standards Space • Importance  Reap efficiencies  Share best practices across a network of stores • Systems  Ordering of stock  Display & rotation of stock  Procedure for selling  Banking procedures Systems Staff Stock • Stockless Prevention  Prevention Methods based on procedural systems & physical systems  Queuing Systems  Power Hours o All staff focus on serving & selling for a critical hour in a trading day o Focus on customer needs because of high traffic flows 13 SLIDE .

what is a service?  Opening hours  Credit Facilities  Fitting Rooms  Returns Policy  Stock availability  Special ordering facilities Staff • Articulation & adherence to standards of key most importance 14 SLIDE .Standards Standards Space Systems Stock • Service: Much more than just serving customers • So.

customer not provided with product Result  Decrease in sales & profit  Increase in labor & inventory holding costs 15 SLIDE .Lemon & Yoghurt Problem Faced  Inaccurate inventory records  Misplaced SKU in store Execution Problems  Physical inventory different from that showing in the (electronic) record  Incorrect ordering & re-ordering  Stock misplaced within store  Miss out during stock takes.

Lemon & Yoghurt Key Problem  Inability to provide shopper’s benefits through lack of available stock Reason  Failure to adhere to systems correctly  Poor operating standards of work  Inappropriate placement of stock  Failure caused by incorrect training of staff and non-adherence to standards of operations 16 SLIDE .

Applying Five S Model 17 SLIDE .

The culprit @ ladies’ dresses store!! 18 SLIDE .

Economic Downturn and 5Ss.Recruiting Talent .Remodeling Store .A diverse dimension Maturing level of retailing format Reduce Cost: .Cross-selling via Customer insights Relative Company Health Source: How retailers can make best of a slowdown. McKinsey Quarterly 19 SLIDE .Waste management .Driving Traffic .Business decision for future growth Driving Market Share .Win locally Financial flexibility .Communicating Values .Sourcing of Raw Material Investment in Strategic Advantage .Stocking .WC management via inventory management .


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