| Deploying LEAN in a retail environment: |
When it comes to Retail, the rule of the game is what the customer picks up from
the point of sale. The faster the information travels upward the value chain and
the same product is produced in the optimum quantity and delivered at the POS
(point of sale), the more will be your customer appreciation and profitability.
But, in most of the practical scenarios the POS are hundreds or thousands of miles
away from the production houses and hence the online replenishment becomes impossible.
So we help our customers in capturing the VOC right using the lean for service
principles and then transfer it to the production houses as fast as possible.
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We at ImpTek believe that, a client organization will benefit only if the
principles we preach are deployed practically and physically on the production
floor or the areas of operation. Extensive trainings are a waste of time and
effort and the return on investment is always ambiguous. According to the ImpTek
Lean philosophy, a company to be called “transformed” should have achieved a
bare minimum of:
- End to End lead time between 50 to 60 percent of Industry average
- Inventory turns greater than 24 times a year
- Productivity up by minimum of 2% every quarter
- Profit growth rate of 2 to 4 times of industry average
- Excellent responsiveness to market requirement
- Time to market for new products less than half of Industrial average.
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| At this juncture, ImpTek rolls out its exclusive deployment philosophy based
on the time-tested, proven and well known Kaizen approach. Kaizen is a Japanese
word that stands for improvement and can also be understood as continuous
improvement. In other words it is 'bias for action' philosophy
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| The ImpTek kaizen strategy:
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| A typical Lean deployment assignment starts with a Value Stream mapping exercise, which is nothing but
a comprehensive on-site Business transformation assessment of the value chain under consideration. Normally,
it is a one week activity but can vary according to the size of the company and the complexity of the value
stream. The first stage of value stream mapping is establishing the Current state map, which is a depiction
of both material and information flow, through the value chain with all allied operational and systemic parameters.
Once this is done, a future state map is created considering the business goals of the organization and the interests
of various stake holders. At the last phase of this exercise, the gap between the current state and future state
are identified and the same are converted into Kaizen Projects.
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| ImpTek rolls out a structured five day charter for a Kaizen event, at the end of which
tangible physical results are assured.
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| We very well understand that the business complexities and needs vary from company
to company and industry to industry. Hence we have modeled specialized
Kaizen events to cater to various industrial segments like Manufacturing,
Process, Service, Retail, and IT/ITES. We also offer these as customized solutions
based on the needs of the individual organization and sensibilities.
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| Deploying LEAN in a retail environment: |
| For a retail company, whether you are looking onto it from a brand-owner'
perspective or a chain outlet' perspective, we can help you in establishing a
pull system which will be triggered by the actual purchase of an end customer.
Further this system will be capable enough to bring the products from the
manufacturing centre to the POS shelf in the shortest possible lead time and
with minimum inventory in the logistic pipe line.
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| The lean tool kit for retail consists of an essential mix of transactional,
logistic and production kaizen events. For a brand retailing this is delivered
in a staggered manner of two stages.
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| The first stage will be optimizing the outbound channel which will mainly
include the trading office, the outbound logistics, distribution channels like
CFAs, C&Fs, distribution centers, distributors /dealers wherever applicable and
ending at POS
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| The second stage will focus on the inbound channel which will mainly include
the post production stage of the production unit and stages upto the trading office.
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| For a retail chain of outlets, the strategy slightly differs, wherein a
comprehensive action plan with necessary elements of both the above will be
used as applicable
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| When it comes to hands-on lean implementation we will start with transactional
kaizens that will help you in identifying and reducing unnecessary hand offs and
decision points and also in minimizing the transportation of materials through the
distribution network. Lean also helps you in minimizing the unnecessary documentation
that are normally an inevitable part of any retail enterprise.
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| Our methodologies using lean will also help you in having standard operations
for different stages of your value chain by which efficiency of the whole system
will improve dramatically.
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| If there are value additions that are happening to the product at different
stages in the value chain, like packing, tagging etc which normally happens at
distribution centers we will use production kaizen events to make those activities
more prudent and error free.
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| In addition to the time taken, transit or the transportation of materials will
lead to another major issue which is the transit damage. More than just damage,
this will also lead to partial deliveries and unaccomplished delivery schedules
(Both in terms of time and quantity) which may create a huge dent on customer
satisfaction. It is also not very un-common that some products live their life
in transit or becomes obsolete by the time it reaches the POS shelf. Logistic
Kaizens, the week long lean program offered by ImpTek, will help you in doing
away with these worries for ever.
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| It is actually the trading channel that pushes many manufacturing organizations
into batch production through unreal forecasts and demanding huge quantities for
seasonal sales. Lean will help you in doing way with long term fore casts and
will make you better equipped for seasonal sales by capturing VOC right and by
aiding you with prudent and efficient distribution systems.
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| Production Kaizens like break though 5S events can play a major role in creating
visibility and traceability at various stages of your value chain. Maintenance
kaizens can improve the efficiency of the whole value chain and reduce the lead
time taken by a considerable amount.
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| Super market and Kan ban concept will come handy in establishing and maintaining
the right stock in the logistic / distribution pipe line, which is nothing but
small enough not a load to system, but at the same time, big enough to ensure
the POS never runs out of stock and the customer is never turned down.
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| The impact of energy kaizens and spot kaizens are quite huge as any retail
chain will involve high amount of people and large operational premises.
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| Lean Enterprise – The future where you would like to be.. |
| Once you set your own house in order, to reap more benefits, you need to expand the scope of your value chain.
Take the value chain out of the four walls of your premises, by including your customers and suppliers into it.
The ideal way is to demonstrate your achievements and capabilities to them and prompt them to become lean. You will
get the full benefits of you being Lean only when your suppliers and customers are also behaving in the same manner.
ImpTek has a proven and systematic set of Lean based supplier development tools |
The major characteristics of a responsible Lean enterprise can be laid sown as follows:
- Inventory turns of minimum 36 times or more a year
- Capable to deliver any product mix in every delivery pitch
- End to end lead time less than 50% of Industry average
- Productivity going up by a minimum of 2% every quarter
- Profits grow at the double the rate of turnover growth
- Time from concept to market for new products less than half of industry average
- 100% uptime for equipments
- Production totally freed up from the clutches of forecasting and made more realistic
based on real time customer demand
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| How to get there? |
| As is the case in any major improvement initiative, the success of Lean implementation depends
on the commitment of the Top management. The first and the foremost step is to identify a full time
value stream manager and a team to work with him/her. Lean implementation has to be taken as a Leading
from the front initiative, where by the top management will demonstrate the commitment through their
actions. The next important step is the value stream mapping. You need to identify the appropriate and
right product family for this exercise. During the VSM process care need to be taken to ensure that,
the data collected are real and all corners are covered. While taking up Kaizen projects, you need to
make sure that, you start with the core line function operation than a supporting function. Making the
right implementation plan and scheduling the events without affecting the production are also pivotal
for a successful lean deployment. Sustaining the gains are as important as achieving them and hence you
need to ensure that the people concerned are trained to the appropriate levels. |
| Above all we need to understand the sensibilities of the people around and take them into confidence.
The barriers of attitude are the toughest to overcome and this can be achieved only through a systematic
change management approach. A lean deployment will become fully successful and bear the real fruits only if
seen as a cultural initiative. Hence a structured culture change initiative need to be in place which goes
hand in hand with the Lean implementation.
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| A successful business model. |
| A successful business model is one that keeps all the major stake holders of your business namely your customers,
your employees, your business partners and your share holders smiling and making considerable healthy profits.
Hence ImpTek rolls out a consulting model that perfectly aligns the objectives of Lean to the expectations of your
stake holders, there by making you a profitable enterprise. |
| Stake-Holders' Expectation Matrix |
| CUSTOMER |
Quality |
Price |
Delivery |
| EMPLOYEE |
Safety |
Remuneration |
Pride |
| BUSINESS PARTNER |
Long term interest |
Payments |
Good will |
| SHARE HOLDER |
Profits |
R O I |
On time pay backs |
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| The ImpTek Business-Consulting Model. |
| From the expectation matrix, try improvising the green boxes and you will understand
that the rest of them will automatically fall in place. In the current market, where prices
are squeezed day by day, the only way to cope-up is by reducing your cost of operation.
Hence or we strongly recommend that, your operational parameters that you monitor should be |
| Quality |
Cost |
| Delivery |
Safety |
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| Hence we recommend that Lean (and for that reason, any break through initiative that you undertake)
should be monitored and the results be measured using the above or their direct derivatives as the yard
sticks. We call this as the ‘Q-C-D-S’ matrix and our Unique Business consulting model aligns the classical
lean deployment philosophy to this.
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This Sate of the art model will definitely take you to new heights in business with high profits,
which should be used for strategic growth.
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