Retail Lean Management

Solving Retail Problems Lean Retail Management

 Amit Garg Sr.. Retail Functional Consultant Sr Email Phone IM

[email protected] 91-9880641822 amitkgarg22 (Skype)

Topics What is Lean Thinking? What is Lean Retail? Why Lean Retail? Retail? What does customer value Waist in retail store Customer store experi experience ence Benefits of Lean Retail Retail Implementing Lean Retail Principles of Lean Retail Execution Execution Retail Scenario-SAP Warehouse and DC Management (Lean WM)          

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.

W ha hatt is Lean Thinking T hinking? ? Value

Empowered People

Value Stream

Perfection

Flow & Pull

What is Lean Retail? 

The Lean Retail approach centers on a number of Lean techniques: 

Simplifying work design

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Using pull to drive replenishment

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Removing bottlenecks throughout the supply chain

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Eliminating wasted: 

Effort

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Time

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Materials

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Motion

Lean Retail 

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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

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Get everyone engaged

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Start with the customer 

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Creativity is the greatest resource

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Silos are the greatest obstacle

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.

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Traditionally waste has been viewed Traditionally as an object. It is is very easy to envision a barrel of scrap and identify it as waste

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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

Myths About Retail Operati Operations ons

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,

Overall demand are highly variable, many parts of it are predictable

so we must be ready for anything 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

Implementing Lean Retail Causes Cause s of Wa Waste ste and Noise

P  r   o  d   u  c  t   F   o  c  u  s

W F  M  & E  f   f   i    c i    e n  c  y

R   o  u  t    e P  l    a n n i   n  g

 C   a  t    e  g  o r   y M  g m  t  

L   a  y  o  u  t    /   P  l    a n n  o  g r   a m  s

P  r   o m  o  t   i    o n

Principles of Lean Retail Execution 

If your customers expect products to be delivered on trend, then

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eliminate obstacles such as extra handling and improve processes

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that are inhibited by poor workflow design.

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Plot the value stream. Identify and map all the steps involved in

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moving goods through the system, all the t he way to the customer.

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 Activities that add no value should be eliminated.

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Make the process flow. Redesign processes that prevent the free

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flow of products to the customer. customer.

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Pull from the customer. Lean execution requires a clear 

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understanding of demand and current inventory, inventory, pulling

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merchandise to stores and to the shelf based on what customers

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want.

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Pursue perfection. Root out any remaining r emaining waste. Then do it again,

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and again, and again.

James Womack and Daniel Jones, authors of  Lean Thinking: 

Retail ScenarioScenario-Warehouse 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.  –

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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

Process Flow Flow Diagram Diag ram Warehouse and DC Management (Lean WM)    t   s    i    l   a    i   c   e   p    S   e   s   u   o    h   e   r   a    W    l    i   a    t   e    R

  n   o   s   r   e    P   s   e    l   a    S    l    i   a    t   e    R

Create Purchase Order

Create Inbound Delivery

Posting Rough Goods Receipt

Goods Receipt with Reference to Rough Goods Receipt

Process Flow Flow Diagram Diag ram Warehouse and DC Management (Lean WM)

   t   s    i    l   a    i   c   e   p    S   e   s   u   o    h   e   r   a    W    l    i   a    t   e    R

Article document for goods receipt

Create Return Delivery

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Return Deliveries (Optional)

Output of article document as goods issue slip

Process Flow Flow Diagram Diag ram Warehouse and DC Management (Lean WM)

   t   s    i    l   a    i   c   e   p    S   e   s   u   o    h   e   r   a    W    l    i   a    t   e    R

Create Outbound Delivery

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Goods Issue Processing

Create transfer order as picking document

Alternative 1: Confirmation without differences

Alternative 2: Confirmation with fifference

Post goods issue

Mass processing of outbound deliveries

Process Flow Flow Diagram Diag ram Warehouse and DC Management (Lean WM)

   t   s    i    l   a    i   c   e   p    S   e   s   u   o    h   e   r   a    W    l    i   a    t   e    R

Create physical inventory document

Process physical inventory

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Warehouse Physical Inventory (Optional)

Clearing differences Analyse physical inventory

Alternative 1: Manual creation of physical inventory

Alternative 2: Creation of physical inventory via batch-input

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.

Inventory Management 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.

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-ManagementWarehouse-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: 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: •

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You can reprint transfer orders at any time. You can split transfer orders and thus distribute the workload workload better among the staff in your warehouse. You can use mass processing functions f unctions based on the transfer order (for  example wave picks).

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

 Automatic generation using selection by:   

Group of Outbound Deliveries or  Wave Pick

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 ...

Mass Processing of Deliveries Delivery Delivery

Delivery Delivery Delivery Delivery Delivery

Collective Follow-On-Processing:   

Group of Outbound Deliveries or  Wave Pick

Create transfer order  Confirm transfer order  Post goods issue

Rough Workload Estimate Planned Goods Issue Delivery Delivery

Delivery Delivery

Calculation of  workload using:

Estimated Workload in:

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Logistics Load Category  Unit of Measure  Whse no. / storage type  Warehouse process

Quantity  Weight  Volume  Execution time 

Delivery

Information on:  

needed manpower  needed transport capacity

Processes Goods Receipt and Return Deliveries

Processes Picking and Goods Issue

Process Physical Inventory

References 

SAP

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CISCO

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Lean Manufacturing in World

Email IM

[email protected] Phone 09880641822 amitkgarg22 (Skype)

 Amit Garg Sr.. Retail Functional Consultant Sr 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