Guidon Lean Retail Webinar: Leveraging Lean Store Operations to Improve the Customer Experience

4,180 views
4,066 views

Published on

Learn how leading retailers are applying Lean Six Sigma to improve the customer experience.

The webinar will cover “Five Points of Transition” a consumer goes through in a retail environment and how those five transition points can be optimized for efficiency and improved customer experience.

How does your company rate when it comes to the customer experience? Find out how well your company is performing and benchmark with other retailers.

Published in: Business, Career
0 Comments
5 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
4,180
On SlideShare
0
From Embeds
0
Number of Embeds
418
Actions
Shares
0
Downloads
262
Comments
0
Likes
5
Embeds 0
No embeds

No notes for slide

Guidon Lean Retail Webinar: Leveraging Lean Store Operations to Improve the Customer Experience

  1. 1. Leveraging Lean Store Operations to Improve the Customer Experience<br />July 23, 2009<br />
  2. 2. Agenda<br />Introduction<br />What is Lean Retail<br />The Current Store Experience<br />The 5 Transition Points<br />Improving Store Experience<br />Case Studies<br />Getting Started<br />Questions<br />2<br />© 2008 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />
  3. 3. With You Today<br />Ron Wince, President/CEO, Guidon Performance Solutions, LLC<br />Two decades of experience in application of Lean and Six Sigma<br />Co-founder of Guidon Performance Solutions – the pioneer in applying LeanSigma® in non-industrial and non-traditional companies<br />Client experience in retail, healthcare, financial services, information technology, telecommunications and hospitality<br />B. S. Engineering, U.S. Naval Academy in Annapolis, MD<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />3<br />Jim Dickey, Vice-President, Guidon Performance Solutions, LLC<br /><ul><li>Over 15 years in application of Lean and Six Sigma
  4. 4. Co-founder of Guidon Performance Solutions – the pioneer in applying LeanSigma® in non-industrial and non-traditional companies
  5. 5. Client experience in retail, healthcare, financial services, telecommunications and government
  6. 6. Pioneered groundbreaking approach to managing capacity and staffing in highly complex, highly variable operating environments </li></li></ul><li>What is Lean Retail?<br />Exactly what the customer wants<br />Where the customer wants it<br />When the customer wants it<br />In the quantity the customer wants it<br />While utilizing minimum resources and minimizing customers’ effort<br />Specify value from the standpoint of the consumer <br />(not from your assets and organization)<br />4<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />
  7. 7. Why Lean Retail?<br />Consumers are more demanding than ever<br />More choice… lower cost… better quality<br />Higher Expectations<br />Newness… innovation… product interrelationships<br />Globalization<br />Brand migration… accelerating trend lifecycles<br />Brand & SKU Proliferation<br />Private label… generics… multi-brand… segmentation<br />The pace of change requires new thinking<br />5<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />
  8. 8. What does the customer value?<br />The key is to reduce processes and effort to “core value”<br />6<br />Tesco found that it took 319 days to perform 2 hours of value creating effort for the end to end process of manufacturing and selling a cola product.<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />
  9. 9. Getting to Core Value<br />Wait in line<br />at rental<br />counter<br />Take bus<br />to terminal<br />From gate to<br />rental counter<br />At counter<br />From<br />counter<br />to bus<br /><ul><li>Confirm reservation
  10. 10. Review & sign paperwork
  11. 11. Credit card imprint
  12. 12. Receive rental contract
  13. 13. Receive car assignment</li></ul>Locate<br />car<br />Drive<br />to exit<br />From<br />gate<br />to bus<br />Take<br />bus<br />to car<br />Drive<br />to exit<br />Traditional Car Rental Process<br />Hertz Gold<br />7<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />
  14. 14. LEAN is all about identifying and eliminating waste<br />Over Producing<br />Waste is seen differently in LEAN…<br />One of the stumbling blocks to LEAN is understanding the concept of waste. <br />Traditionally waste has been viewed as an object. It is very easy to envision a barrel of scrap and identify it as waste. <br />In LEAN thinking the term waste actually refers not to the physical material but rather the relationship of the resource to the end customer. <br />Over Processing<br />Work In Process<br />Errors & Rework<br />Transport<br />Waiting<br />Excess Motion<br />In LEAN, waste is measured in consumption of resources – time and capital<br />8<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />
  15. 15. Waste in Retail Stores<br />9<br />Over Producing<br />Over Processing<br />Work In Process<br />Wrong price<br />Planograms incorrect<br />Category optimization<br />Packaging<br />Repack<br />Backroom PUSH<br />Backroom storage<br />Left over seasonal stock<br />Errors & Rework<br />Transport<br />Waiting<br />Excess Motion<br />It’s all about core value….<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />
  16. 16. Current Store Experience<br />What’s the problem with the retail shopping experience?<br />Product proliferation and duplication<br />Product complexity and change<br />Confusing promotions<br />Ineffective signage and excessive clutter<br />Products hard to find or out of stock<br />Poor service<br />Long lines<br />What are the effects?<br />High levels of consumer stress<br />Procrastination<br />Reduced shopping frequency and duration<br />Low purchase conversion rates<br />10<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />
  17. 17. Five Transition Points of the Customer Experience<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />11<br />Enter<br />Seek<br />Find<br />Select<br />Transact<br />
  18. 18. Lean Waste in the Five Transition Points<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />12<br /><ul><li> Motion
  19. 19. Waiting
  20. 20. Excess Information</li></ul>Enter<br /><ul><li> Excess Information
  21. 21. Excess Inventory
  22. 22. Motion
  23. 23. Defects</li></ul>Seek<br /><ul><li> Over-processing
  24. 24. Excess Motion
  25. 25. Waiting
  26. 26. Defects</li></ul>Find<br /><ul><li> Excess Information
  27. 27. Defects
  28. 28. Transportation
  29. 29. Motion</li></ul>Select<br /><ul><li> Defects/Errors
  30. 30. Waiting
  31. 31. Motion
  32. 32. Over-processing</li></ul>Transact<br />
  33. 33. Improving the Store Experience<br />“The secret is in the dirt.”<br />-Ben Hogan<br />Your most powerful competitive advantages are where the work gets done<br />13<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />
  34. 34. Results for Early Adopters<br />Inventory Turns 5-7 <br />Lead Time 30%+<br />Net Margin 20%+<br />Comparable Store Sales 10%+<br />Full Price Sell Through 65%+<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />14<br />
  35. 35. Case Study – A Breakthrough for Car Buyers<br />15<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />
  36. 36. A new car buying experience<br />A national chain of Auto Retailers<br />Innovators in the Car Buying Process<br />Car Selection <br />Pricing<br />Financing<br />Customer Experience<br />Continuing to improve their process to better serve their customers using Lean Retail<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />16<br />
  37. 37. The Customer Buying Experience<br />This company created a value stream to understand the customer buying experience from beginning to end<br />Team wanted to understand what was occurring from the time a customer came to a store until they left the location with the car – both customer facing and “back room” <br />Their current process was effective and had good feedback from customers – but could be better<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />17<br />
  38. 38. Lean Retail – Areas of Focus<br />Inventory Selection and Management<br />Improved car transfer process<br />Dealer setup and appraisal process<br />Alignment of Detailing, transfer, and Business Office Activities<br />Store Operations<br />Sales Manager Effectiveness<br />Improved the Sales process across the stores<br />Reduced the time necessary for appraisals<br />Technology improvements <br />Improved Business Office Process<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />18<br />
  39. 39. Car Buying Results<br />Customer Service<br />Improved time to move inventory to selling point by 50%, which has the potential savings of $7.8 million in increased profits<br />Reduction in Customer Sales process in store to as fast as fast as 60 minutes<br />Cost Savings<br />Reduction in inventory handling costs – reduced cost to move car resulting in conservative estimate of $1 million dollars<br />Consolidation in some Business Office Functions resulting in cycle time improvement of 35% and lead time reduction of 65%<br />Associate Satisfaction<br />Clear linkage to customer for each process<br />Resources freed from non-value process to focus on customer – previously 35% of Sales Managers time was customer focused; this was changed to over 75% of the time is with their Customers<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />19<br />
  40. 40. Case Study – Retail Pharmacy<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />20<br />
  41. 41. Background<br />The retailer recognized their customer feedback about the transaction process was poor – lagging competitors by a significant amount<br />They chartered an initiative using Lean and Six Sigma tools to study the check-out process and find waste and defects in the process that hindered the customer<br />The data was compelling and the team is now working on implementing solutions<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />21<br />
  42. 42. Expected Checkout Experience is Important in a Convenience Environment<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />22<br />Why focus on improving the customer checkout experience? <br />Customer perception of checkout is worse than competitor B and C…<br />. . …and customers say that their expected checkout experience influences many aspects of their visit<br />Some typical customer thoughts:<br />% rating speed of checkout excellent<br />Transaction<br />Decision to Shop<br />While shopping<br />Waiting in line<br /><ul><li>Will I be able to get in and out quickly?
  43. 43. How long can I actually shop if I need to leave in 5 minutes?
  44. 44. Why did the person who got in line after me get helped first?
  45. 45. Is there room for me to put down my purse and the items I am purchasing?</li></li></ul><li>…80% of transactions have problems causing longer transaction times<br />Delays and non-value added tasks nearly double the transaction time to 1.4 minutes.<br />1 out of every 10 customers, on average, experienced “Time bomb” issue(s) that required management intervention or significant problem investigation.<br />These transactions averaged over 2.5 minutes and negatively impacted the customers waiting in queue as well. <br />20%<br />80%<br />23<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />The Average Time for a Problem-Free Transaction is 46 seconds, However…<br />
  46. 46. Non Transactional<br />Loyalty Card<br />Scan and Bag <br />Tender Process<br />Delays<br /><ul><li>Crew Member waits to begin transaction until customer provides Loyalty Card
  47. 47. Customer searches for Loyalty Card
  48. 48. Must lookup Loyalty Card by phone number
  49. 49. Items cannot all be staged at the same time
  50. 50. Customer searching for payment method/exact change
  51. 51. Cashier or system delays in processing credit/debit
  52. 52. Customer inspects receipt or gathers belongings delaying the next customer</li></ul>24<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />…70% of Observed Transactions Experienced a Delay Due to Customer Actions or Process Issues<br />…10% of Observed Transactions Experienced a “Time Bomb” negatively impacting the speed of checkout <br />Time Bombs<br /><ul><li>Issue/confusion with Loyalty Offers and/or manufacturers coupon
  53. 53. Customer returning or exchanging merchandise
  54. 54. Customer cannot find Loyalty Card (phone lookup is not successful)
  55. 55. Customer inquires about price of item requiring validation
  56. 56. Call to Management for assistance (issue resolution) or authorization
  57. 57. Customer leaves mid-transaction to gather an additional item
  58. 58. Management called for change
  59. 59. Customer is issued a Rain Check after substitution offers are not accepted
  60. 60. Addressing declined check payment</li></li></ul><li>How To Get Started?<br />Pick a single pilot area or department – cosmetics, pharmacy, etc.<br />Develop a better understanding of consumer experience and the shopping process – flow, aisle penetration, dwell time, product interaction, queue lengths<br />Identify waste<br />Eliminate the low hanging fruit with simple creativity<br />Expand beyond pilots to encompass the whole store<br />25<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />
  61. 61. Lawn Chair Larry<br />&quot;If you think you can, or think you can&apos;t, you&apos;re right.&quot;<br />  --Henry Ford<br />“Lawn Chair” Larry Walker, 1982<br />© 2008 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />26<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />
  62. 62. Questions?<br />© 2008 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />27<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />
  63. 63. Thank You<br />Guidon Performance Solutions<br />866-986-4414 or 480-986-4414<br />contact@guidonps.com<br />www.guidonps.com<br />© 2008 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />28<br />© 2009 Guidon Performance Solutions, LLC.  All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.<br />

×