Retail Lean Management -Desktop Research

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Power has shifted from manufacturers to lean retailers Benefits of Lean in Retail:
Low shelf space requirement
Reduced carrying cost
Reduced Through Put Time of products in value Chain
Improved Profitability through Inventory Management

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Retail Lean Management -Desktop Research

  1. 1. Solving Retail Problems Lean Retail Management-Desktop Research
  2. 2. Topics What is Lean Thinking?  What is Lean Retail?  Why Lean Retail?  What does customer value  Waist in retail store  Customer store experience  Benefits of Lean Retail  Implementing Lean Retail  Principles of Lean Retail Execution  Retail Scenario-SAP Warehouse and DC Management (Lean WM) 
  3. 3. Tesco’s Lean Supply Chain UK Tesco can provide all the things one needs to run a household, literally from soup to nuts and everything in between.
  4. 4. What is Lean Thinking? Value Empowered People Value Stream Perfection Flow & Pull
  5. 5. 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
  6. 6. Lean Retail  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
  7. 7. Contents From :Lean_Retail_sample.ppt - Lean 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
  8. 8. Benefits of Lean Retail Myths About Retail Operations Lean Retailing Perspectives 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 We would need a lot of capital to invest because this program may not pay back for years Lean Retail requires very little capital investment and consistently delivers substantial impact through sales increases and cost reductions By giving stores more control, I lose network wide consistency and standardization Lean retail increases consistency and standardization while empowering local management McKinsey & Company
  9. 9. Implementing Lean Retail Causes of Waste and Noise Promotion Layout/Plannograms Category Mgmt Route Planning WFM & Efficiency Product Focus Guidon Performance Solutions 2009
  10. 10. Principles of Lean Retail Execution  If your customers expect products to be delivered on trend, then  eliminate obstacles such as extra handling and improve processes  that are inhibited by poor workflow design.  Plot the value stream. Identify and map all the steps involved in  moving goods through the system, all the way to the customer.  Activities that add no value should be eliminated.  Make the process flow. Redesign processes that prevent the free  flow of products to the customer.  Pull from the customer. Lean execution requires a clear  understanding of demand and current inventory, pulling  merchandise to stores and to the shelf based on what customers  want.  Pursue perfection. Root out any remaining waste. Then do it again,  and again, and again. James Womack and Daniel Jones, authors of Lean Thinking:
  11. 11. Retail Scenario-Warehouse and DC Management (Lean WM)  Scenario  This scenario describes the processing of merchandise in the distribution center with inventory management done at the level of storage location – Lean Warehouse Management.  Benefits  Since storage procedures depend on space limitations, organization and the type of merchandise being stored, this scenario should be seen as one example of an implementation. Key Process Steps  Goods Receipt Processing  Return Deliveries  Goods Issue Processing  Warehouse Physical Inventory © 2011 SAP AG. All rights reserved. 
  12. 12. Process Flow Diagram Retail Sales Person Retail Warehouse Specialist Warehouse and DC Management (Lean WM) Create Purchase Order Create Inbound Delivery Posting Rough Goods Receipt Goods Receipt with Reference to Rough Goods Receipt
  13. 13. Process Flow Diagram Retail Warehouse Specialist Warehouse and DC Management (Lean WM) – Return Deliveries (Optional) Article document for goods receipt © 2011 SAP AG. All rights reserved. Create Return Delivery Output of article document as goods issue slip
  14. 14. Process Flow Diagram Retail Warehouse Specialist Warehouse and DC Management (Lean WM) – Goods Issue Processing Create Outbound Delivery © 2011 SAP AG. All rights reserved. Create transfer order as picking document Alternative 1: Confirmation without differences Alternative 2: Confirmation with fifference Post goods issue Mass processing of outbound deliveries
  15. 15. Process Flow Diagram Retail Warehouse Specialist Warehouse and DC Management (Lean WM) – Warehouse Physical Inventory (Optional) Create physical inventory document Process physical inventory Clearing differences Analyse physical inventory Alternative 1: Manual creation of physical inventory © 2011 SAP AG. All rights reserved. Alternative 2: Creation of physical inventory via batch-input
  16. 16. Document Flow in the Warehouse PO Inb. Delivery Rough GR GOODS RECEIPT PUTAWAY TRANSFER ORDER There is no stock keeping in Lean-WM, but just recording of movements using transfer orders. GOODS ISSUE FIXED STORAGE BIN PICKING TRANSFER ORDER Outb. Del.
  17. 17. Inventory Management - IM vs. WM Inventory Management on article level Fixed storage bin can be maintained in the article master Site (text field) Storage Location Whose number Storage type No additional level of stock keeping below IM. Warehouse number and type are just used for the recording of stock movements using the transfer order, but no stock posting is triggered when moving merchandise at this level.
  18. 18. Using Lean WM When you implement Lean WM, inventory management takes place solely at storage location level. The system does not update the stock data at storage bin level using the quants like the Warehouse-ManagementSystem (WMS) . You use Lean WM solely for processing goods receipts and goods issues. Using Lean WM, you process the warehouse movements in basically the same way as if using the Warehouse Management System: you work with deliveries, and you create transfer orders for these deliveries. These transfer orders serve as pick lists. The use of transfer orders in Lean WM provides the following advantages: • • • You can reprint transfer orders at any time. You can split transfer orders and thus distribute the workload better among the staff in your warehouse. You can use mass processing functions based on the transfer order (for example wave picks). © 2011 SAP AG. All rights reserved.
  19. 19. Mass Processing of Deliveries Delivery Delivery Delivery Delivery Delivery Manual creation in the outbound delivery monitor using selection by:     Shipping point Picking date Route, carrier ... Free selection Delivery Delivery Group of Outbound Deliveries or Wave Pick Automatic generation using selection by:  Picking date / time  Additional filter by several criteria  (e.g. route, shipping point, ship-to-party ...) Considering capacity restrictions:     Weight, volume Maximum items on the picking list Working time ...
  20. 20. Mass Processing of Deliveries Delivery Delivery Delivery Delivery Delivery Delivery Delivery Group of Outbound Deliveries or Wave Pick © 2011 SAP AG. All rights reserved. Collective Follow-On-Processing:  Create transfer order  Confirm transfer order  Post goods issue
  21. 21. Rough Workload Estimate Planned Goods Issue Delivery Delivery Delivery Delivery Delivery Calculation of workload using:  Logistics Load Category  Unit of Measure  Whse no. / storage type  Warehouse process Estimated Workload in:  Quantity  Weight  Volume  Execution time Information on:  needed manpower  needed transport capacity
  22. 22. Processes Goods Receipt and Return Deliveries
  23. 23. Processes Picking and Goods Issue © 2011 SAP AG. All rights reserved.
  24. 24. Process Physical Inventory
  25. 25. References     SAP CISCO Lean Manufacturing in World Other Internet Reports and searches on Lean Reatil
  26. 26. Email IM amitkgarg22@gmail.com Phone 09880641822 amitkgarg22 (Skype) Amit Garg Sr. Retail Functional Consultant Overall 11 years experience in Retail Domain In Procurement ,Sourcing, Supply Chain Management Buying ,Merchandising, Category Management , Supplier/Vendor Management ,Retail IT, Process Consulting and Business Analysis. Depth knowledge of Retail & CPG Business Processes and its dependencies

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