A Project undertaken in A Major High Street Electrical Retail Company
A large high street retailer, with branches ranging from small shops with three or four staff to large out-of-town superstores had observed a number of problems within its branches, including the:
Although the organisation had observed these problems empirically, there extent was not known and they wished to solve these issues and optimise staffing in the branches to match customer flow.
Although this case study is a retail project, the principals and approach have been successfully implemented in all sectors, including warehousing, transport, banking, insurance, finance, Government departments, the NHS, local authorities and manufacturing.
The approach adopted was designed to help organisations to improve their productivity substantially and realise benefits in a socially responsible and acceptable manner, whilst maintaining or improving quality and customer service.
This was achieved by encouraging the active participation and co-operation of the organisation’s staff, staff representatives and management in all stages of the project.
The project was undertaken by an internal project team, selected, trained, supported and managed by M4 Management Ltd.
The improvements achieved were the result of the project team working with managers, team leaders and staff to:
Success and acceptance of change is crucial and was enhanced using a participative approach ensuring all involved in the project understood what was happening and their role within the project.
The organisation had a wide variety of branch types throughout the UK. It was therefore important to select a number of trial branches that were representative of this mix. Key variables were:
The organisation saw this project as an important opportunity for the career progression of Branch Managers therefore the project team was selected from a short list of branch managers. To ensure the team members would be suited to the tasks within the project, a series of psychometric questionnaires were administered to the candidates. The questionnaires have been used to select individuals for this type of project over several decades and have a high level of predictability in identifying those candidates who would perform successfully and enjoy doing the project.
Using branch managers had the advantage of them knowing the organisation’s systems and being respected by staff. However, it required control to ensure they questioned their beliefs and preconceived ideas and to ensure they remained impartial observers and did not try to intervene in the normal working of the project branches, especially when they saw something needing attention.
Most change fails because of human factors, rather than technical issues. To help overcome this, it is vital to communicate actively with everyone involved with the project. This was achieved throughout the project
To understand what was happening in the branches an overview of staff activities, customer behaviour and the sales was obtained.
This was followed by using M4’s Retail Data to obtain process times for all tasks in the retail outlets. The process times were obtain with the full cooperation of Branch Staff and managers who reviewed and accepted the times obtained.
Within the scope of the project it was decided to concentrate on two quick wins: from the stock control system eliminating the stock tally and changing the use of the docket and increasing staff customer approach rate.
The removal of the stock tally and changing the docket was implemented and resulted in an overall cost reduction of £16,000,000 a year along with quicker stock taking, more accurate stock checking, improved audit trail, less paper storage, fewer till queries and substantially more staff time on the shop floor, helping reduce pilfering.
To increase the customer approach rate, a simple staff scheduling system was implemented. Having found that the conversion rate seemed to have a limit and that the level of service on small items was excessive, it was also decided to how low-value items were sold and change the ratio of full-time to part-time staff.
This resulted in:
The next issue chosen to solve was the 24% of lost staff time. There are many factors affecting how productively staff can work. There are times when staff are unable to work for a variety of reasons. When working, not all work done is useful or productive. Even when the work is useful, staff may not be trained, experienced, suited to the job or motivated. This lost time is the effectiveness gap that is the difference between the work content measured using the M4 Retail Standards and the time staff attend work.
Much of this lost time is in the direct control of team leaders and managers, who with their staff can bring about substantial improvements.
Our experience has shown the effectiveness of organisations varies between 33% and 80% with the average of both being 50%.
In this phase of the project, the focus is on closing the effectiveness gap. To achieve this a Resource Management (RM) system was implemented. This quickly resulted in an annual saving of £35,000,000 per year which would increase over time as the programme matured.
The use of Resource Management system, which is a comprehensive but not complex approach, enabled a major high street retailer to achieve substantial savings including £30,000,000 a year in quick wins and a further £35,000,000 a year in the medium term through implementation of a Resource Management programme. At the same time sales increased by 20%. In addition the project laid the foundation for continuous productivity and process improvement, control of branch staffing costs and identified further initiatives which could be undertaken to improve productivity and sales further
In addition to the financial benefits, the project provided significant non-financial benefits, including: branch managers being more secure and in control of their branches and improved staff morale through greater involvement and knowledge about what they should be doing at any given time.
The project approach used helped ensure acceptance of the results by all levels of staff, their representatives and management and the successful implementation of the recommended changes. The approach outlined in this case study is equally applicable to all other sectors of industry and commerce and has been successfully implemented in many other companies.