STORES Magazine - April 2008 - (Page 60)

See six moves ahead — and you’ve won. While it's difﬁcult to anticipate six moves ahead in the strategic game of chess, the world's retailers are having an exceedingly tough time executing their own game winning strategies. Retailers and manufacturers have spent the past couple of decades gaining visibility and control over supply chain execution, and after investing millions of dollars on IT and logistics are now reaping enormous beneﬁts. These solutions can deliver product from far off manufacturing plants to the store quickly and efﬁciently, but they've failed in one regard: they ignored the last yard – from the dock, through the stockroom and right onto shelves. The CPG and retail industries can no longer afford to ignore this problem, and there are various process and IT changes that have the capacity to shore up these ﬁnal holes in the demand chain. So why is the last yard so problematic? As labor budgets shrink, retailers often struggle to execute on new operational requirements with a much smaller workforce. Store associates are the face of the store, and as demands on their limited time increase, stores risk losing touch with customers. Often it's a choice between completing operational tasks like merchandising and stocking, or spending time with consumers. It doesn't have to be an either/or decision, however. While most retailers have focused exclusively on optimizing the number of hours worked within each store, many now realize they must also examine how to make more efﬁcient use of their associates' time. At the root of this problem, are shrinking labor budgets and disorganized processes between store headquarters and individual locations. Retailers currently send instructions and orders down from multiple departments at headquarters—HR, ﬁnance, marketing, legal, merchandising—without accounting for one another, or the workload and available labor at the store level, often overwhelming managers and individual stores in the process. Store managers must root through voicemail, email, binders, Intranet and other communications to prioritize these requests, but this can result in mismanaged tasks and workload distribution, including overtime non-compliance. Unfortunately, the complexity of the Fair Labor Standard Act (FLSA), individual state overrides, and the increasingly punitive nature of the regulations, make it critical that store managers maintain work schedules that are compliant with the law. Otherwise, retailers are vulnerable to enormous risk of non-compliance, resulting in possible million dollar ﬁnes. The potential risk of ﬁnes and other labor and task difﬁculties can have a pronounced impact on the retail bottom line. For one, the expense of getting the product to the ﬂoor can often reach unbelievable levels. A European retailer admitted it cost more to deliver a bottle of wine from the stock room to the shelf than it did to ship a case of wine halfway around the globe. Additionally, that inability is the chief cause of daily and promotional stockouts. On a daily basis, these problems result in nearly 10 percent stockout rates across the industry. Promotional items, which are a chief customer enticement, go out of stock at a nearly 25 percent rate. And when those items aren't there, almost 50 percent of customers will leave to ﬁnd products at another store. They don't forgive the retailer and buy another product; they simply walk out of the store! And wherever highly manual efforts like stocking shelves must occur, time and labor costs accumulate quickly if run inefﬁciently. Again, the most expensive portion lies in the manual processes currently involved in coordinating labor and the movement of products from the backroom to the shelf. Changes to those processes not only keep shelves full, but cut costs within the entire retail enterprise. To do so, retailers can utilize a fully integrated task and workforce management solution that optimizes all task and trafﬁc driven labor needs, while building automated schedules that are compliant with the law. Typically web-based, these solutions give managers and headquarters a complete view into sales and trafﬁc driven labor needs, as well as all tasks and requests made on store locations. This allows headquarters to set workload and priorities, and managers to easily build compliant work schedules and assign tasks. And because compliance communication is built into these applications, all the links of the demand chain can be given visibility of when shelves are full and when they are empty, when store work schedules are overloaded or when they have excess capacity. As retailers and their supply partners made the supply chain amazingly efﬁcient through better visibility and control, they ignored a ﬁnal link in that chain. It remains a costly oversight, but in changing the processes by which stores operate, retailers can maximize the productivity of their stores through optimized task and workforce management, reducing expenses and ensuring they have a winning strategy to stay in control of the game. Visualize Success 877-733-7724 | www.redprairie.com Advertorial http://www.redprairie.com

Table of Contents Feed for the Digital Edition of STORES Magazine - April 2008

STORES Magazine - April 2008 Contents Executive Editor's Page President's Page More Retailers Bagging Monthly Comp-Store Reports Time-Warner Center's Economy-Defying Results What Shoppers Think 10 Things You May Have Missed Numbers Worth Counting Full Price/Markdown Retail People Eating Locally Grocery Concept2Watch Restaurants Online Services Marketing Human Resources Product Lifecycle Management E-Commerce: Peer Reviews Drive Online Buyers Kiosks Recycling Operations Payment Systems POS Logistics E-Commerce: Getting Personal Website Management LOEB Retail Letter Arts Update Point of View NRF News Retail Industry Calendar Last Laugh

STORES Magazine - April 2008

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