The operation process reengineering for retailer

Abstract

The main objective of this study is to improve retailer’s operation process in term of quality, cost and delivery when compare with average. The consequence of those improvements will lead to higher customer satisfaction. The second objective is to demonstrate tools for avoiding pitfalls in retail’s new design process. This research demonstrates the steps of applying consolidated business process reengineering methodology with retailer’s operation reengineering. The redesign team study, measure performance and analyze 8 as-is processes including; Stock Arrangement, Out of Shelf Checking, Price Label Changing, Goods Receive, Replenish from warehouse, Stock Request, Selling Via Sales Order, Selling Via POS, and replenish from DC. The redesign team initiates 7 redesign projects to improve operation process performance including; Overall Business Process Activity Redesign from Replenishment Vendor, Goods Receive, Price Label Changing, Selling Via POS, Selling Via Sales Order, to Out of Stock Checking. The 7 new redesign processes are developed and implemented at Case Study Company. The data from before and after process transition is compared to analyze the new design processes. The action practices are developed to prevent new design processes from pitfalls. The results indicated that operation’s performances have significant positive linear improvement. By eliminating the activity of price change list printing, exist labels checking, and keying price change item, the average claim for incorrect price after process transition in every branch is reduced more than 40%. The calculated activity costs based is reduced more than 28.54%. As a result from the new replenishment and out of shelf checking process, the average out of shelf rate after process transition in every branch is reduced more than 36.93%. The practices to prevent redesign process’s risks, from experiences of first two months after process transition, are suggested. The analysis also reveals some important strategies to improve operation process reengineering such as human errors, hardware failure risk, incorrect program parameter, and unexpected result from SAP.