Increase productivity and improve customer service in retail environment
In the 12 months prior to the project’s start, the customer base that supported the farm stores experienced an economic downturn. The base customers, rural farmers, experienced drought conditions causing their worst harvest in years. Oil & gas and construction customers who spurred a period of retail store expansion over the previous few years were set back by a general retrench of the global economy. The result for the farm stores: sales had declined 27%, but the cost structure had not adjusted.
The sales decline exposed deficiencies in both labor planning and customer service. Labor through the peaks and valleys of the year were largely static with high full-time to part-time ratios and a high administrative burden not allowing them to be more flexible. Customer service was not previously given much consideration, as it was thought that the merchandise would sell itself. At a time when every sale became important, it became apparent that there was no defined sales process and a sales culture that was passive, not active. These conditions were the impetus for embarking on a project with Carpedia.
Some of the changes that generated improvement include:
- Developing a performance plan that translated a store’s weekly budget into required resources and facilitating proactive hiring decisions.
- Building store models that identified core versus noncore positions in-store to identify true full-time versus part-time needs.
- Centralizing administration by region instead of building dedicated administrative activities into each store.
- Tie staffing to hourly customer flow patterns (developed during the project), helping store managers plan resources to ensure appropriate coverage throughout each day of the week.
- Reducing time spent searching for product by standardizing product descriptions in the Point-of-Sales system, developing a rigorous zero on shelf process and re-organizing back room operations.
- Establishing a formal sales process and training store personnel
The Results
Specific results included:
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The project exceeded targeted savings expectations with a 320% return on project fees.
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17% improvement in labor productivity
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Ongoing savings will be realized through an improved Management Operating System and a highly engaged management group.
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