PROCESS REDESIGN

Simplify Workflow:

PROCESS REDESIGN (Retail)

Enabling Enterprise

What is

Process Redesign? Published by SPRING Singapore 1 Fusionopolis Walk, #01-02 South Tower, Solaris Singapore 138628 Tel: 6278 6666 Fax: 6278 6667 www.spring.gov.sg © SPRING Singapore 2013 All rights reserved. No part of this publication should be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying or otherwise, without prior permission of the copyright holders.

Process redesign refers to changing or simplifying the steps in the key processes to remove wasteful activities that do not add value to customers, and focus on improving activities that do. An example is given here, where process redesign has reduced a 4-step process to a 2-step process.

Step 1

Whilst every effort has been made to ensure that the information contained herein is comprehensive and accurate, SPRING Singapore will not accept any liability for omissions and errors.

Step 2

Step 3

Step 4

Process Redesign

Step 1

Step 2

Step 3

Step 4

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Why

How

should I use

do I use

Process Redesign?

Process Redesign? Simplify workflow with process redesign.

Reduce

Process redesign begins with the management. Communicate the benefits of process redesign to all employees and demonstrate top management’s commitment to it. Identify processes to improve and use the 4-step approach to simplify each process. This approach is illustrated below, with examples included under each step.

Mistakes by employees and suppliers

Waste

Costs

1

STEP 1 List the steps in the current process

1

2

3

Sort inventory

Return or discard expired/spoilt products

Identify inventory sold

Increase

Employee morale

2

Efficiency

Revenue

6

5

4

Place order

Look for the right supplier

Decide products to be ordered

7

8

Receive and inspect products

Display products

I have 8 steps in one of the key processes in my retail shop.

3

2

STEP 2 Look out for the different types of waste and find out the causes of the waste in each step

Work with the employees involved in each step to identify the wastes.

Determine the wastes in each step

SPANNER

HAMMER

Use the Fish Bone Diagram and the 5 Whys to find out the causes of each waste. These are illustrated below: Step 1: Sort inventory

Fish Bone Diagram Employees are not aware of the defects Employees are complacent and negligent

Employees do not highlight the defects

Waste: Defects There is a recent change of supplier

Supplier Job roles has provided are not a batch of assigned defective products

Employees do not perform quality checks

A Direct Cause B Indirect Cause

On the diagonal lines A , write the direct causes of the waste. For example, if there are 3 direct causes to the waste, there should be 3 diagonal lines.

Step 2: Return or discard expired/spoilt products

On the short horizontal lines B , write the factors (indirect causes) that result in the direct causes of the waste.

Waste • Inventory - Messy and disorganised inventory • Movement - Unnecessary movements needed to reach the product Causes • No proper labelling and allocation of inventory storage space • Disorganised inventory, restricting movement

Waste • Defects - Effort and raw materials wasted in sorting defective products - Money spent on non value-added activities such as discarding defects • Waiting - Time wasted for rework or sorting of defective products • Inventory - Storage space occupied by defects that could be put to better use Causes • No quality checks on products • No SOPs • Customer specifications not communicated clearly

5 Whys Write down the waste and ask “why” five times to identify the causes. Example: Waste: Overprocessing Why? Employees are not clear of the specifications. Why? There is no communication or training provided to employees. Why? There are no standard operating procedures (SOPs). Why? Company is not aware of the importance of SOPs. Why? There is no benchmarking or survey done to assess current performance. Generally, by the fifth “why”, the company should be able to get to the real root cause of the waste. 4

Step 3: Identify inventory sold

Waste • Underutilised manpower - Inefficient manual counting process that is error-prone - Easily misplaced written records - Difficulty in performing analysis • Waiting - Time wasted during manual counting Causes • Unaware of availability of software for tracking purposes • Not enough knowledge of how to use technology to improve the step

5

Step 4: Decide products to be ordered

Step 5: Look for the right supplier

Waste • Underutilised manpower - Inefficient manual process of tabulating products • Waiting - Time wasted during manual process of tabulating • Inventory - Storage space occupied due to ordering of too much stock Causes • Unaware of availability of software for tracking purposes • Not enough knowledge of how to use technology to improve the step

Causes • No records of past defects for tracking purposes • No SOPs for checking and handling defects

Waste • Underutilised manpower - Inefficient manual process of searching namecards for contact information • Waiting - Time wasted during manual process of searching • Over-processing - Objective cannot be easily achieved in a simple step Causes • Unaware of availability of software for tracking purposes • Not enough knowledge of how to use technology to improve the step

Step 6: Place order

Step 7: Receive and inspect products

Waste • Underutilised manpower - Effort wasted on periodic checks with supplier on delivery status • Waiting - Time wasted calling supplier - Non real-time update from supplier • Over-processing - Repeated calls made to get update of status

Waste • Defects - Effort and raw materials wasted in sorting defective products - Money spent on non value-added activities such as discarding defects and providing feedback to supplier • Waiting - Time wasted reordering another product - Time wasted during delivery of product • Inventory - Storage space that could be put to better use while waiting for supplier to collect or exchange product

Step 8: Display products

Waste • Underutilised manpower - Effort needed to sort products for display - Effort needed to reprint and replace price tags with price changes • Waiting - Delay in accurate pricing • Inventory - Storage space taken up during process of displaying products Causes • Unaware of availability of software for tracking purposes • Not enough knowledge of how to use technology to improve the step • Lack of housekeeping knowledge

Causes • Unaware of availability of software for tracking purposes • Not enough knowledge of how to use technology to improve the step

6

7

3

STEP 3 Redesign the process I want to redesign my current process by combining steps to reduce waste.

Redesign the process by combining sequential steps that have the same causes. For any change that is considered, ask the following questions:

• What is the change?



• Who is involved in the change?



• How can the change be made?



• What are the costs of the change?



• Who bears the costs of the change?



• What are the benefits of the change?



• How can the benefits of the change be shared?



• Do the benefits outweigh the costs of the change?

SPANNER

HAMMER

Step 1: Sort inventory

Step 2: Return or discard expired/spoilt products

B A

A

Current + Future Benefits

B

Current + Future Costs

8

Process Redesign • Label inventory storage space with markings indicating space allocated for different types of inventory • Arrange inventory that is depleted quickly in more accessible places • Place heavy objects closer to the floor

Waste • Defects • Waiting • Inventory

Evaluate if the change is worth making by measuring the total current and future benefits of the change against the total current and future costs of the change. If the total current and future benefits exceed the total current and future costs, implement the change.

Waste • Inventory • Movement

Change!

Process Redesign • Analyse past sales to better understand customer demand and know how many items to order from supplier • Improve storage/display of products to minimise defects caused by mishandling

Waste • Inventory • Over-processing • Underutilised manpower • Waiting Step 3 -6: Integrated Point-of-Sales

Process Redesign • Use an integrated Point of Sales (POS) system that: - Records products sold - Automatically updates stock list - Performs customer demand forecast based on past sales - Places order with supplier when inventory is low relative to sales forecast 9

Waste • Waiting • Defects • Inventory Step 7: Receive and inspect products

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STEP 4 Implement the change

Process Redesign • Put more effort in inspecting products that have been recorded to have defects • Call the supplier to demand better quality management and advise the supplier to engage productivity consultants if products are frequently defective or if deliveries are often late

Waste • Underutilised manpower • Waiting • Inventory Step 8: Display products

4

Process Redesign • Heavier products should be arranged on the lower sections of the shelves • Use electronic LED price and product labels to change the price and name of products easily • Put products of the same category together so that customers know where to find them • Organise products properly to reduce time spent deciding where to display them • Display small, cheap and attractive products at the cashier to increase sales • Use adjustable shelves to accommodate sizes of different products

Talk to employees about the change you are going to implement

Make one small change at a time

Encourage employees to look for further improvement in their individual areas and give feedback

Celebrate successes along the way to improve employees’ morale

Reward good ideas and efforts in improving productivity

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After implementing process redesign, I have combined steps 3 to 6 into just 1 step and reduced wastes in the other 4 steps.

WHERE can I get

1

HELP?

Sort inventory

2 Return or discard expired/spoilt products

3 -6 Integrated Point-of-Sales

7 Receive and inspect products

8 Display products

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You can access the Process Redesign (Retail) tool online at www.waytogo.sg or approach advisors for assistance at any of the SME Centres. SME Centre@ASME Association of Small and Medium Enterprises T: 6513 0388 E: [email protected] W: www.smecentre-asme.sg SME Centre@SCCCI Singapore Chinese Chamber of Commerce and Industry T: 6337 8381 E: [email protected] W: www.smecentre-sccci.sg SME Centre@SICCI Singapore Indian Chamber of Commerce and Industry T: 6508 0147 E: [email protected] W: www.smecentre-sicci.sg SME Centre@SMCCI Singapore Malay Chamber of Commerce and Industry T: 6293 3822 E: [email protected] W: www.smecentre-smcci.sg SME Centre@SMF Singapore Manufacturing Federation T: 6826 3020 E: [email protected] W: www.smecentre-smf.sg

SPRING Singapore

1 Fusionopolis Walk, #01-02 South Tower, Solaris, Singapore 138628 Tel: 6278 6666 Fax: 6278 6667 www.spring.gov.sg