Operational Process Improvements and Methods Analysis
Methods analysis through the development of standardized work and engineered labor standards leads to reduced operating costs and improved customer service levels. While methods analysis is common practice in manufacturing, it is recently being employed in the retail industry. The chart below illustrates how methods analysis has impacted the time required to deliver bicycles from the backroom assembly area to the retail floor within a retail environment. This significant reduction in the cycle time results in over $3k savings annually, assuming the savings will be directly transferred to value-added work.
The first step in the process improvement process is to standardize the task and develop a work instruction on the current method. The original method involved the manual transfer of the bicycle from the backroom assembly area to the retail floor, positioning of the bicycle to the to the rack, and returning to the assembly area. The total time required to complete these steps is illustrated to the right; click on this image to see the work instruction which was developed.
Now that the current method has been documented, brainstorming sessions can be conducted and should identify the waste within the process. The transportation of the bicycle to the retail floor and the excess motion of walking back to the assembly area were identified as the ideal areas for improvement. The process improvement developed was to design and implement a bicycle cart (shown at right) which is capable of transporting five bicycles simultaneously. This significantly reduces the travel time required to deliver the bicycles to the retail floor.
It is now time to develop a work instruction representative of the improved process. The time required to transport a bicycle to the retail floor is illustrated to the right, and once again the full image can be shown by clicking. Although there are more elements being performed in the new procedure (loading and unloading the bicycle to the cart is now included) the overall cycle time saves still more than three minutes compared to the original method.
Scalability is a tremendous factor when it comes to process improvements in the retail industry. When these savings can be immediately implemented in all of the stores throughout the entire chain the dollar value of the savings grows very rapidly. The table below quantifies the savings from the process improvement idea presented above as it relates to the entire chain. In this case, there are 3,800 stores nationwide and if all of them can benefit from these types of savings nearly $13M in savings will be realized.
While the example presented above represents an especially lucrative case, several thousand dollars in annual savings per store is not uncommon. PMC has the necessary skills to facilitate the process.