Is Lean applicable in retail and wholesale?

Traditionally, the retail industry has been focusing on early technology adoption as a major driver to improve its bottom line.

• In the 1980s, unique packaging codes/barcodes together with point-of-sale systems were implemented to boost efficiency and accuracy.
• In the 1990s more complex planning tools for forecasting, merchandising, smart warehousing/distribution and pricing were introduced to retail operations.
• In the 2000s, cross channel integration, ERP platforms, online stores, and pricing/ markdown tools were implemented.

Still missing, until now, are major improvements/investments in inventory management processes between central warehouse/depots to retail stores/outlets and within retail stores (in-house logistics) themselves.

Process and organisational improvement through Lean is capable of addressing most challenges in the retail merchandise life cycle while creating significant and tangible value for retailers through continuous satisfaction and overachievement of customer needs.

5 key steps to delivering Lean Retail

1 – Define value

That is, value to the Customer – it’s not just about price, it can be convenience, personalisation, speed, being listened, being valued, etc. A retailer can do this by truly engaging with their customers understanding what really matters to them.

2 – Review the end-to-end life of a product, identifying every part of the process (systems and people) that does not add any value.

It is very important to follow the full product life cycle, as opposed to siloed parts of the business or process, otherwise the waste may simply shift to another part of business.

A good example of this might be the process of design through to order placement.?How are the designs created and communicated to the supplier? How is this process finalised and the order placed? Maybe there are a lot of unnecessary phone calls and emails, or a rough order is sent manually initially followed by an electronic firm order.

3 –?Remove processes that add no value and create processes that require less effort, space, and cost with less chances of defects (human or technology)

Following the last example, an over engineered new product development could be simplified and implemented to map the process and remove unnecessary manual communication between the Buyer and Supplier, unnecessary samples done because the supplier is guessing and buyer haven't defined properly his demands related products.

4 – Ensure the systems and people process are mirrored and continuous

Whilst tracking the ‘As Is’ people process, the systems process needs to mapped alongside, and then the ‘To Be’ process designed with both in mind.

Multiple Buying and Merchandising and Supply Chain systems that have been purchased by Retailers over the years, resulting in duplicate systems processes or, conversely, processes that are not connected from one system to the next.

5 – Review the culture and the ways of working within the organisation, including external contacts such as suppliers and supply chain third parties. A Lean culture associates change with improvement.

A Lean culture has a Lean strategy, with unified KPIs and deliverables running through from the top down. It promotes trust, working as one team, a data-driven approach to every decision, and continuous improvement throughout.

In short, Lean Retail requires a Lean Process, Lean Culture and Lean Technology. Same as in manufacturing, supply chain or healthcare...same as in any business.