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Lean Retail is a systematic approach to eliminating all kinds of non-value adding activities in the processes with the creative involvement of all employees.
The retail industry is going through a challenging phase. With the advent of technology, the consumer has a better understanding of products and services in the market. This awareness among consumer coupled with exposure to international market causes shorter product life cycles. Inadequate retail space, shortage and retention of trained manpower bring profit levels down. 51% of FDI in the retail industry will redefine market boundaries and bring stiffer competition from global giants in the coming years. This could also bring profits down as over the past few years’ discounting is becoming an accepted practice. These challenges influence the true potential and growth of this sector and impact the bottom line.
Adopting Lean Practices will help retailers significantly improve operations for doing the right things for customers in the long run.
Why Lean Retail!
Lean Retailing makes it faster, easier and less expensive to respond to customer’s needs. It is an operational strategy that aims to identify and reduce wastes of time and resources. Implementation of Lean in retail processes removes bottlenecks enabling free flow of product to the customer. Inculcating a culture of continual improvement in the organisation results in small improvements throughout the value chain.
Lean Retail optimises processes by identifying waste in the process which causes customer dissatisfaction.
The areas of waste identified in a retail industry are:
- Waste of Defects – Stocking commodities which are in bad quality, are rejected or need rework
- Waste of Overproduction – Keeping merchandise more than customers’ needs items block cash flow
- Waste of Waiting –Customers or staff unnecessarily waiting for information of material due to delays in delivery or being out of stock.
- Waste of Transportation –Unnecessary movement of commodities due to bad quality(exchange or return); useless moving of items between warehouse and store;
- Waste of Inventory – Bringing in large quantities of merchandise without matching demand creates excess inventory and blocks cash flow; Materials in transit, items kept in shelves or for seasonal demand cost a lot of space and effort.
- Waste of Motion – Staff unnecessarily moving, bending to pick or locate merchandise as per customer requirement
- Waste of Over-Processing – such as duplication of materials, invoices etc cause delay and rework.; not following schedule or setting up displays as per plan
- Waste of Employee Potential –Sales people are mostly engaged in menial tasks rather than up selling; not making improvements but wandering at workplace
In Lean distribution, only a customer order triggers a pull-based operation. The operations are optimized using lean tools & techniques by managing inventories, simplifying packing, inventory management, material flow, handling and optimum usage of space. Lean distribution alleviates the month end syndromes and helps the staff in managing the distributions centres, warehouses etc. Our objective is to create takt-time based material flow where the product are directly pushed to shipping docks in minimum handoffs.