Power has shifted from manufacturers to lean retailers Benefits of Lean in Retail: Low shelf space requirement Reduced carrying cost Reduced Through Put Time of products in value Chain Improved Profitability through Inventory Management

1. Solving
Retail
Problems
Lean Retail Management-Desktop
Research

2. 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)


3. Tesco’s 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.

4. What is Lean Thinking?
Value
Empowered
People
Value
Stream
Perfection
Flow &
Pull

5. What is Lean Retail?
 The Lean Retail approach centers on a number of Lean
techniques:
 Simplifying work design
 Using pull to drive replenishment
 Removing bottlenecks throughout the supply chain
 Eliminating wasted:
 Effort
 Time
 Materials
 Motion
Womack, 2006

6. Lean Retail

Tools from the Lean
Concept translate well into
the retail industry

The Lean principles remain
the same but the
application may change

Focus on the value stream 
Get aligned

Get everyone engaged

Start with the customer

Creativity is the greatest
resource

Silos are the greatest
obstacle

8. Contents From :Lean_Retail_sample.ppt - Lean
Why Lean Retail?
Lean is all about identifying and eliminating waste
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 waste
actually refers not to the physical
material but rather the relationship of
the resource to the end customer
In Lean, waste is measured in consumption
of resources – time and capital

16. Benefits of Lean Retail
Myths About Retail Operations
Lean Retailing Perspectives
It is impossible to provide better
customer service without increasing
labor costs
Lean retail improves customer service
and frontline employee satisfaction
without increasing labor costs
We can’t predict customer demand,
so we must be ready for anything
Overall demand are highly variable,
many parts of it are predictable
Product availability can only be
improved through increased amounts
of inventory on hand
Lean retail will reduce inventory and
out-of-stocks
We would need a lot of capital to
invest because this program may not
pay back for years
Lean Retail requires very little capital
investment and consistently delivers
substantial impact through sales
increases and cost reductions
By giving stores more control, I lose
network wide consistency and
standardization
Lean retail increases consistency and
standardization while empowering
local management
McKinsey & Company

17. Implementing Lean Retail
Causes of Waste and Noise
Promotion
Layout/Plannograms
Category Mgmt
Route Planning
WFM & Efficiency
Product Focus
Guidon Performance Solutions 2009

18. 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:

19. 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
© 2011 SAP AG. All rights reserved.


20. Process Flow Diagram
Retail Sales Person
Retail Warehouse Specialist
Warehouse and DC Management (Lean WM)
Create Purchase
Order
Create Inbound
Delivery
Posting Rough
Goods Receipt
Goods Receipt
with Reference to
Rough Goods
Receipt

21. Process Flow Diagram
Retail Warehouse Specialist
Warehouse and DC Management (Lean WM) – Return Deliveries (Optional)
Article
document for
goods receipt
© 2011 SAP AG. All rights reserved.
Create Return
Delivery
Output of
article
document as
goods issue
slip

22. Process Flow Diagram
Retail Warehouse Specialist
Warehouse and DC Management (Lean WM) – Goods Issue Processing
Create
Outbound
Delivery
© 2011 SAP AG. All rights reserved.
Create transfer
order as
picking
document
Alternative 1:
Confirmation
without
differences
Alternative 2:
Confirmation
with fifference
Post goods
issue
Mass
processing of
outbound
deliveries

23. Process Flow Diagram
Retail Warehouse Specialist
Warehouse and DC Management (Lean WM) – Warehouse Physical Inventory (Optional)
Create physical
inventory
document
Process
physical
inventory
Clearing
differences
Analyse
physical
inventory
Alternative 1:
Manual creation
of physical
inventory
© 2011 SAP AG. All rights reserved.
Alternative 2:
Creation of
physical
inventory via
batch-input

24. Document Flow in the Warehouse
PO
Inb. Delivery
Rough GR
GOODS RECEIPT
PUTAWAY
TRANSFER ORDER
There is no stock
keeping in Lean-WM,
but just recording
of movements using
transfer orders.
GOODS ISSUE
FIXED
STORAGE
BIN
PICKING
TRANSFER ORDER
Outb. Del.

25. Inventory Management - IM vs.
WM
Inventory Management on article
level
Fixed storage bin can be
maintained in the article master
Site
(text field)
Storage Location
Whose number
Storage type
No additional level of stock keeping
below IM.
Warehouse number and type are
just used for the recording of
stock movements using the
transfer order, but no stock
posting is triggered when moving
merchandise at this level.

26. Using Lean WM
When you implement Lean WM, inventory management takes place solely
at storage location level. The system does not update the stock data at
storage bin level using the quants like the Warehouse-ManagementSystem (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: you
work 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 among
the staff in your warehouse.
You can use mass processing functions based on the transfer order (for
example wave picks).
© 2011 SAP AG. All rights reserved.

27. Mass Processing of Deliveries
Delivery
Delivery
Delivery
Delivery
Delivery
Manual creation in the outbound delivery
monitor using selection by:




Shipping point
Picking date
Route, carrier ...
Free selection
Delivery
Delivery
Group of Outbound
Deliveries
or
Wave Pick
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
...

28. Mass Processing of Deliveries
Delivery
Delivery
Delivery
Delivery
Delivery
Delivery
Delivery
Group of Outbound
Deliveries
or
Wave Pick
© 2011 SAP AG. All rights reserved.
Collective Follow-On-Processing:
 Create transfer order
 Confirm transfer order
 Post goods issue

29. Rough Workload Estimate
Planned
Goods Issue
Delivery
Delivery
Delivery
Delivery
Delivery
Calculation of
workload using:
 Logistics Load Category
 Unit of Measure
 Whse no. / storage type
 Warehouse process
Estimated
Workload in:
 Quantity
 Weight
 Volume
 Execution time
Information on:
 needed manpower
 needed transport
capacity

30. Processes Goods Receipt and
Return Deliveries

31. Processes Picking and Goods
Issue
© 2011 SAP AG. All rights reserved.

32. Process Physical Inventory

33. References




SAP
CISCO
Lean Manufacturing in World
Other Internet Reports and searches on Lean
Reatil

34. Email
IM
amitkgarg22@gmail.com
Phone 09880641822
amitkgarg22 (Skype)
Amit Garg
Sr. Retail Functional Consultant
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
dependencies