While lean process improvement is most widely applied to supply chains, manufacturing, warehousing and distribution, it can also be highly valuable in the retail store. Lean retail is a systematic approach to optimising store operations that focuses on eliminating waste, improving workflows and empowering employees to make data-driven decisions. By implementing lean strategies, retailers can boost efficiency and enhance customer satisfaction.
Uncover Significant Opportunities for Waste Reduction and Productivity Improvements
Lean or kaizen events can be incredibly valuable in retail stores, connecting your value stream all the way from the store to your distribution and vendors’ supply chains. Applying lean methodologies to your retail store can uncover significant opportunities for waste reduction and productivity improvements.
Start by assessing and mapping all people, processes and technology in the store, from inventory management to checkout. Look for repetitive tasks, bottlenecks and unnecessary steps. Identifying these areas will allow your team to implement targeted improvements that reduce waste and improve overall productivity.
At this point, you may start to notice some extraneous processes or systems in your operations. That could signal the need for a capabilities roadmap, which will help align all people, processes and technology throughout your retail network with your key business goals.
The 5 Principles of Lean
- Identify value from the customer perspective
- Map the value stream
- Create flow – make the steps that create value flow in tight succession
- Establish pull – let customers “pull” value from the next upstream activity
- Seek perfection – rinse and repeat the process until the process occurs with no waste
Now that you know the steps, here are 10 tips on using lean methodologies in your retail stores.
Tips to Incorporate Lean Retail for Your Organisation
1. Leverage meaningful data
There are several key performance indicators (KPIs) you need to know to make meaningful improvements towards reducing waste. Keep in mind certain metrics like how long your queue is, the average time it takes to service a customer and how long it takes to unload a trailer.
Lack of actionable data leads to additional waste in the form of extra time spent gathering baseline data and metrics. Make sure your data is in order so you can base your lean decisions on relevant and timely business insights.
Master data management can become a project of its own, but for your in-store lean initiative, use resources like your point-of-sale data, inventory turnover rates and foot traffic analytics to make informed decisions. This kind of insight will help with optimising stock levels, layout and staffing for leaner operations.
2. Define what improvements in productivity are based upon
Improvements in productivity are based upon understanding best practices, preferred methods and standards.
- Best practices are the optimal material flow strategy and equipment to meet customer demand.
- Preferred methods are the optimal way to perform an individual task.
- Standards are the engineering standards for each of the work methods that feed you labor allocation and scheduling system.
When beginning your lean initiative, you’ll need to determine what metrics you’ll be tracking and how you will define improvement. Set clear benchmarks for productivity improvements, like reducing shelf restocking time by a certain percentage or increasing sales per associate, so the team knows exactly what success looks like.
As a rule, poor methods or processes should not be optimised. Simply discard them.
3. People can’t be controlled like machines
People are your biggest assets, but they are also your biggest causes of variation and can often be resistant to change. Pay particular attention to people concerns at the beginning of a project, getting alignment and buy-in as early as possible.
Empower your employees to identify inefficiencies and suggest improvements. Lean works best when staff are motivated and included in decision-making.
4. Track flow in a retail store
In a retail store, the concept of tracking material flow can be difficult, because it’s harder to watch material flow on the store floor like you can on the warehouse floor.
Products and services do flow. You just need to use tools like a Value Stream Map and Customer Journeys to see them. Start with the customer and go all the way back to your supplier to see your comprehensive material flow.
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5. Don’t let lean terminology be intimidating
Simplify and conform lean terminology and methods to match your current terminology. You already have your own culture and common language, so leverage this and translate lean to your own terms when possible. You’ll gain traction across your organisation more quickly.
6. Include store associates in process improvements
While store associates are often given guidelines around how their work should be performed, they generally have room to structure their daily tasks and make their work their own. This individual control over certain components of in-store work can create resistance when defining process improvements in their domain.
People can fear losing whatever creativity and freedom they have in doing their job. To get your associates to accept process change more smoothly, involve them in what to change and how to change it. Include them on lean teams and empower them to help create best practices, preferred methods and standards as you seek to eliminate waste.
7. Learn how to recognize waste
Retailers often have not been trained to observe their processes with a focus on the eight types of lean waste. The eight types of lean waste include: defects, overproduction, waiting, non-utilised talent, transportation, inventory, motion and extra processing.
Start viewing your business using this lean waste filter. You’ll be amazed by what you see.
8. Identify variability in retail functions
There is always a great amount of variability in every aspect of retailing (sales forecasting, inventory control, task management, etc). With lean, you’ll need to identify the variability in your business and then apply the lean toolbox to reduce the variability.
Ultimately, this will help drive down cost. At a retail store, this may mean trailer shipments that can be processed with the same size staff.
Where variability cannot be reduced, seek to increase your flexibility. In stores, this could translate to cross training employees.
9. Focus on standardisation
Complexity exacts an enormous cost on store processes. Because of this, you’ll need to focus on standardising components and sub-processes as much as possible. Use the “KISS” principle (Keep It Simple) when developing your preferred methods and SOPs.
Standardising will go a long way towards reducing process and service complexity, ensuring consistent performance, reducing errors and making training new staff easier.
10. Leverage lean teams to identify opportunities and craft solutions
A kaizen event will use common sense to improve cost, quality, delivery and responsiveness to your customers’ needs. A kaizen event lasts one week and uses small cross-functional teams that seek to improve a process or problem identified within a specific area in a very short period of time (“Quick Wins”).
Form small, dedicated lean teams to review store processes regularly, brainstorm improvements and implement pilot programs to test new approaches.
Conclusion: enVista Lean Retail and Supply Chain Services
enVista’s supply chain experts are lean certified and deeply experienced in improving and optimising supply chain performance. We provide lean operations consulting in all four-wall environments, from manufacturing to distribution and the retail store.
Do you need help improving your performance and eliminating waste? Check out our lean process improvement services.
