Discount Retailer Discovers Efficiencies in Stocking, Replenishment, and Recovery

A Discount Retail Leader operating over 1,400 brick-and-mortar storefronts across the US.

27%

efficiency Improvement

$1.08M

annual direct cost savings

Challenge

Despite being in a highly competitive industry in steady decline over the last 5 years, this company posted record numbers last year. Due to continued growth and an expansive store network, this client was struggling to allocate labor hours properly to inventory stocking, replenishment, and recovery activities. With no defined and documented standards in place, labor was allocated in lump sum amounts based on store size.

Discovery

We engaged with 10 stores over the course of a 12-week pilot study, interviewing staff and performing time and motion studies to establish a baseline for performance. Having collected 10,000+ data points, we built a labor model to more accurate predict required labor hours. We then identified and tested solutions in several areas:

Eliminated excessive labor hour allocation by determining required time to complete activities based on volume and other factors
Increased process efficiencies by defining standard operating procedure and roles and responsibilities
Eliminated unnecessary steps taken with the introduction of new processing equipment and reorganization of the stockroom layout, streamlining the inventory management process

These solutions were validated and subsequently rolled out network-wide to more than 70 high-volume stores, realizing pilot efficiencies at scale.

Value Created

As result of this pilot initiative, our client realized immediate financial benefits and efficiency improvements:

$1.08M in annual direct labor savings, a 12% Cartons Per Hour (CPH) improvement attributed to process redesign and labor modeling
27% efficiency improvement in stocking, replenishment, and recovery activities

Additionally, the client maintained a better in-stock position and reduced “stock-outs through improvements to stockroom organization and layout.