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  • Retailing

    Maximising operational excellence

  • Retailing – Maximising operational excellence

     An introduction to Collinson Grant 2

     Typical ‘headaches’ for retail managers 5

     Aligning the buy side and sell side 10

     Finding opportunities to improve the supply chain 11

     Finding opportunities for savings at head office 13

     Finding opportunities for savings in procurement 15

     Making it happen – programme management 17

     Our skills and expertise in retailing 20

    1

    Contents

    Page

  • Retailing – Maximising operational excellence

    An introduction to Collinson Grant

    Our approach

    Collinson Grant focuses on sustainable results

    We work on

    Real insight

    Client’s close involvement

    Pragmatic approach

    Organisation

    Acquisition, business integration, restructuring, organisational design, roles and accountabilities, and employee relations

    Costs

    Direct costs, overheads, supply chain and operations, working capital, procurement, and managing complexity and performance

    Business Process

    Business process re-engineering, managing change programmes, Lean and Six Sigma, exploiting ERP, and installing business controls

    Small teams

    Seasoned consultants

    General managerial perspective

    Economic Value

    2

  • Retailing – Maximising operational excellence 3

    What we do – the varying scope of our work

    1 Improving service at lower cost by using Lean, Six Sigma and good managerial practice throughout supply chain operations

    2 Cutting costs and applying good practice throughout the supply chain, designing better processes and contracting out

    3 Making changes to the business model by defining the customer proposition, restructuring operations, and supporting acquisitions

    C Improving productivity

    Reducing complexity

    Reducing the number of sites

    Optimising distribution

    Restructuring the organisation and reducing overhead cost

    S tr

    e a m

    lin in

    g

    b u si

    n e ss

    -w id

    e

    p ro

    ce ss

    e s

    S u p p o rtin

    g a

    cq u isitio

    n s

    w ith

    o p e ra

    tio n a l d

    u e d

    ilig e n ce

    Defining and developing the customer proposition

  • Retailing – Maximising operational excellence

    Our consultants’ experience in retailing

    4

  • Retailing – Maximising operational excellence

    Emptier high streets – 14% of

    shop space is vacant

    5

    Typical ‘headaches’ for retail managers …

    Excess stocks and obsolete inventory

    Increased risk, deteriorating

    performance by customers and

    suppliers

    Deteriorating terms from suppliers

    Inaccurate forecast and demand

    planning

    Lack of ownership and accountability

    for profit performance

    Expansion of ‘value retailing’

    Managing complexity across

    products, channels, and formats

    Lack of transparency on contribution of indirect staff

    Rising property and staff costs

    Proliferation of stock keeping units

    Internet eliminates former ‘category

    killers’

    Deteriorating working capital

    metrics

    Deteriorating customer service

    Slowing stock turn More, not less, regulation

    Lack of connectivity

    between online and store trading

    strategies

    Falling productivity from store space

    Proliferation of suppliers

  • Retailing – Maximising operational excellence

    Revenue

    Costs

    Working capital

    Fixed capital

    Shareholder value

    Profitability

    Invested capital

    - The shareholder value tree -

    Cost of goods sold (COGS)

    Asset productivity

    Cost of business operations

    Manufacturing, conversion and sourcing costs

    10 - 15% costs

    Inventories of raw, part-finished and finished products

    Order-to-cash cycle time

    10 - 20% inventory

    Physical assets – plants, warehouses, trucks, office and support locations 10 - 20%

    assets

    Market share

    Gross margins

    Customer service

    Fewer lost sales

    1 - 2% margin

    -Typical targeted benefits -

    - Supply chain impact -

    Driving up shareholder value

    6

  • Retailing – Maximising operational excellence 7

    Defining the retail offer

    Number of customers

    Amount purchased by each customer

    Number of stores

    Store locations

    Store layout

    Product adjacencies

    Price points

    Reducing stockouts

    Trading format

    Merchandise assortment and variety

    Merchandise assortment and variety

    Promotions

    Reducing purchase risk

    Trade-up merchandising

    Loyalty programmes

    Changes to the range

    Pricing policies

    Merchandise presentation

    Trading hours

    Product information

    Price positioning

    Brand positioning

    Space allocation

    Selling skills

    Cross merchandising

    Impulse purchases

    Promotions

    Retention programmes

    Promotions

    Merchandise assortment and variety

    Remote shopping

    Seasonal merchandising

    Pinpointing activities that add value

  • Retailing – Maximising operational excellence 8

    Making it happen - turning the retail offer into reality

     Often, the attributes of the stores do not support the personality the retailer hopes to convey

     The visioning pyramid is a way of capturing all the main elements of a personality and tying them together to highlight gaps, inconsistencies and relationships

    Proud to wear the T-shirt

    Personality

    Customers’ values

    Rational benefits

    Emotional benefits

    Attributes

    Build customers’ confidence

    Fun

    Service that flexes to customer needs

    Inspiration

    Meet customers’ needs

    Feel staff really care

    Provide solutions

    Ease of shopping

    In-store excitement

    Stimulated to buy things I didn’t know I wanted

    Customers consider us their tutor

    Depth of range

    Good relationship between price and quality

    Always in stock

    No-quibble return policy

    Interactive in-store displays and demonstration areas

    Post-sale service

    Ease of paying

    A place to bring the family

    Store recognised as best service provider in the UK

    Store laid out around projects

    Trade and customer balance

    Easy to find products

    Proud to tell people I got it here

    Where dreams become real

  • Retailing – Maximising operational excellence

    Defining requirements for staffing – the rules we apply

     Specific skills required in each department

     Number of experts and customer advisers

     Number (and percentage) of full-time and part-time employees

     Expected salary ranges for given skills

     Expected ratio of staff cost to sales

    9

    Clarifying the offer and delivering the goods

  • Retailing – Maximising operational excellence

    Supply

    Source/buy Move/store

    Suppliers (tiers 1-n) Wholesalers Distributors

    Logistics providers

    Transform

    Manufacture Assemble

    Move/store

    Contract manufacturing Co-packers

    Manufacturing plants Logistics providers

    Deliver

    Move/store Order fulfillment Final operation

    Customer segmentation

    Channel partners Logistics providers

    Distributors

    Customer service and support

    Break/fix/repair Spares logistics

    Managing returns Reverse logistics

    Channel partners Logistics providers

    Third-party maintenance

    C u

    s to

    m e

    rs

    C o

    n s u

    m e

    rs

    C h

    a n

    n e

    ls

    Supply chain execution and visibility

    Demand and supply management

    Buy side Sell side

    New product development P

    ri v a

    te l

    a b

    e l

    s u

    p p

    li e

    rs

    C h

    a n

    n e

    ls

    B ra

    n d

    e d

    s u

    p p

    li e

    rs

    Making it happen – aligning the buy side and sell side

    10

  • Retailing – Maximising operational excellence 11

    Finding opportunities to improve the supply chain

    An understanding of the competitive landscape

    + Insight into the retailing business

    + Knowledge of best practice in th