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Lean Retail

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Lean Retail
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Lean Retail

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  1. Lean Retail Lean Industries Series

  2. Topics What is Lean? What is Lean Retail? Why Lean Retail? The Current Store Experience Benefits of Lean Retail Implementing Lean Retail Summary

  3. What is Lean Thinking? Value Value Stream Empowered People Flow & Pull Perfection

  4. What is Lean Retail? • The Lean Retail approach centers on a number of Lean techniques: • Simplifying work design • Using pull to drive replenishment • Removing bottlenecks throughout the supply chain • Eliminating wasted: • Effort • Time • Materials • motion Womack, 2006

  5. Why Lean Retail? Lean is all about identifying and eliminating waste • Waste is seen differently in Lean: • One of the stumbling blocks to Lean is understanding the concept of waste • Traditionally waste has been viewed as an object. It is very easy to envision a barrel of scrap and identify it as waste • In Lean thinking the term waste actually refers not to the physical material but rather the relationship of the resource to the end customer In Lean, waste is measured in consumption of resources – time and capital Guidon Performance Solutions 2009

  6. Current Store Experience • Lean Waste in the Five transition Points • Enter • Seek • Find • Motion • Waiting • Excess Information • Excess Information • Excess Inventory • Motion • Defects • Over-processing • Excess Motion • Waiting • Defects Guidon Performance Solutions 2009

  7. Benefits of Lean Retail • Lean Retailing Perspectives • Myths About Retail Operations • It is impossible to provide better customer service without increasing labor costs • Lean retail improves customer service and frontline employee satisfaction without increasing labor costs • We can’t predict customer demand, so we must be ready for anything • Overall demand are highly variable, many parts of it are predictable • Product availability can only be improved through increased amounts of inventory on hand • Lean retail will reduce inventory and out-of-stocks • Lean Retail requires very little capital investment and consistently delivers substantial impact through sales increases and cost reductions • We would need a lot of capital to invest because this program may not pay back for years • Lean retail increases consistency and standardization while empowering local management • By giving stores more control, I lose network wide consistency and standardization McKinsey & Company

  8. Implementing Lean RetailCauses of Waste and Noise Category Mgmt WFM & Efficiency Promotion Layout/Plannograms Route Planning Product Focus Guidon Performance Solutions 2009

  9. Summary • Tools from the Lean Concept translate well into the retail industry • The Lean principles remain the same but the application may change • Focus on the value stream - • Get aligned • Get everyone engaged • Start with the customer • Creativity is the greatest resource • Silos are the greatest obstacle