retail lean management

7/23/2019 Retail Lean Management

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Lean Retail Management

Solving

Retail

Problems


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Amit GargSr. Retail Functional Consultant

Email [email protected]

Phone 91-9880641822

IM amitkgarg22 (Skype)


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Topics

What is Lean Thinking?

What is Lean Retail?

Why Lean Retail?

What does customer value

Waist in retail store

Customer store experience

Benefits of Lean Retail

Implementing Lean Retail

Principles of Lean Retail Execution

Retail Scenario-SAP

Warehouse and DC Management (Lean WM)


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Tescos 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.


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What is Lean Thinking?

Value

Stream

Empowered

People

Value

Perfection

Flow &

Pull


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What is Lean Retail?

The Lean Retail approach centers on a number of Leantechniques:

Simplifying work design

Using pull to drive replenishment

Removing bottlenecks throughout the supply chain

Eliminating wasted:

Effort Time

Materials

Motion

Womack, 2006


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Lean Retail

Tools from the LeanConcept translate well intothe retail industry

The Lean principles remainthe same but theapplication may change

Focus on the value stream -

Get aligned

Get everyone engaged

Start with the customer

Creativity is the greatestresource

Silos are the greatestobstacle


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Waste is seen differently in Lean:

One of the stumbling blocks to Lean

is understanding the concept of

waste. Traditionally waste has been viewed

as an object. It is very easy to

envision a barrel of scrap and identify

it as waste

In Lean thinking the term wasteactually refers not to the physical

material but rather the relationship of

the resource to the end customer

Lean is all about identifying and eliminating waste

In Lean, waste is measured in consumption

of resources time and capital


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Myths About Retail Operations

McKinsey & Company

Lean Retailing Perspectives

It is impossible to provide better

customer service without increasing

labor costs

We cant predict customer demand,so we must be ready for anything

Product availability can only beimproved through increased amounts

of inventory on hand

We would need a lot of capital toinvest because this program may not

pay back for years

By giving stores more control, I losenetwork wide consistency and

standardization

Lean retail improves customer service

and frontline employee satisfaction

without increasing labor costs

Overall demand are highly variable,

many parts of it are predictable

Lean retail will reduce inventory andout-of-stocks

Lean Retail requires very little capitalinvestment and consistently delivers

substantial impact through salesincreases and cost reductions

Lean retail increases consistency andstandardization while empowering

local management


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Implementing Lean Retail

Causes of Waste and Noise

Pro

ductFocus

WFM

&Efficiency

RoutePlanning

Categ

oryMgmt

Layout/Plannograms

Prom

otion

Guidon Performance Solutions 2009


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Principles of Lean Retail

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

eliminate obstacles such as extra handling and improve processes

that are inhibited by poor workflow design.

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

moving goods through the system, all the way to the customer. Activities that add no value should be eliminated.

Make the process flow. Redesign processes that prevent the free

flow of products to the customer.

Pull from the customer. Lean execution requires a clear

understanding of demand and current inventory, pulling

merchandise to stores and to the shelf based on what customers

want.

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

and again, and again.

James Womack and Daniel Jones, authors of

Lean Thinking:


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Retail Scenario-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.

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

Tools and Workbenches 2011 SAP AG. All rights reserved.


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Process Flow Diagram

Warehouse and DC Management (Lean WM)

Create PurchaseOrder

Goods Receiptwith Reference to

Rough GoodsReceipt

RetailSalesPerson

RetailWarehouseSpecialist

Posting RoughGoods Receipt

Create InboundDelivery


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Warehouse and DC Management (Lean WM) Return Deliveries (Optional)

Articledocument for

goods receipt


Output ofarticle

document as

goods issueslip

Create Return

Delivery

2011 SAP AG. All rights reserved.


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Warehouse and DC Management (Lean WM) Goods Issue Processing

CreateOutboundDelivery

Alternative 2:Confirmationwith fifference


Alternative 1:Confirmation

withoutdifferences

Create transferorder aspicking

document

Post goodsissue

Mass

processing ofoutbounddeliveries



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Warehouse and DC Management (Lean WM) Warehouse Physical Inventory (Optional)

Create physicalinventorydocument

Processphysicalinventory

RetailWare

houseSpecialist

Clearingdifferences

Alternative 1:Manual creation

of physicalinventory

Alternative 2:Creation ofphysical

inventory viabatch-input

Analysephysicalinventory



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Document Flow in the Warehouse

GOODS ISSUE

GOODS RECEIPT

FIXEDSTORAGEBIN

PUTAWAYTRANSFER ORDER

PICKING

TRANSFER ORDER

Outb. Del.

POInb. Delivery

Rough GR

There is no stockkeeping in Lean-WM,

but just recordingof movements usingtransfer orders.
http://localhost/var/www/apps/conversion/current/tmp/scratch6156//Dwdf032/disk_d/Pictures/_/public/RETAIL/96_0001a.html


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Inventory Management - IM vs.

WM

Storage Location

Site

Inventory Management on article

level

Fixed storage bin can be

maintained in the article master

(text field)

No additional level of stock keepingbelow IM.

Warehouse number and type arejust used for the recording of

stock movements using thetransfer order, but no stockposting is triggered when movingmerchandise at this level.

Whose numberStorage type
http://localhost/var/www/apps/conversion/current/tmp/scratch6156//Dwdf032/disk_d/Pictures/_/public/RETAIL/96_0001a.html


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Using Lean WM

When you implement Lean WM, inventory management takes place solelyat storage location level. The system does not update the stock data atstorage bin level using the quants like the Warehouse-Management-System (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: youwork 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:

You can reprint transfer orders at any time.

You can split transfer orders and thus distribute the workload better amongthe staff in your warehouse.

You can use mass processing functions based on the transfer order (forexample wave picks).



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Mass Processing of Deliveries

Manual creation in the outbound delivery

monitor using selection by: Shipping point

Picking date

Route, carrier ...

Free selection

Automatic generation using selection by: 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

...

Group of Outbound

Deliveries

or

Wave Pick

Delivery

Delivery

Delivery

Delivery

DeliveryDelivery

Delivery


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Mass Processing of Deliveries

Collective Follow-On-Processing:

Create transfer order

Confirm transfer order

Post goods issue

Group of Outbound

Deliveries

or

Wave Pick

Delivery

Delivery

Delivery

Delivery

DeliveryDelivery

Delivery



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Rough Workload Estimate

Information on:

needed manpower

needed transport

capacity

Estimated

Workload in:

Quantity

Weight Volume

Execution time

Calculation of

workload using:

Logistics Load Category

Unit of Measure

Whse no. / storage type Warehouse process

PlannedGoods Issue

Delivery

Delivery

Delivery

Delivery

Delivery

G


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Processes Goods Receipt and

Return Deliveries

P Pi ki d G d


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Processes Picking and Goods

Issue



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Process Physical Inventory


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References

SAP

CISCO

Lean Manufacturing in World


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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

Amit GargSr. Retail Functional Consultant

Email [email protected]

Phone 09880641822

IM amitkgarg22 (Skype)

retail lean management

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