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

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

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

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.

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

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