How is Six Sigma driving the Retail Industry?

Retail Industry

The retail Sector is one of the largest and the biggest drivers of any economy.  In the US, the retail sector alone employees approximately 42M people and contributes $2.6T annually to the country’s GDP.

The retail sector comprises of several dynamic parts which consequently leaves an umpteen room for optimization. Here is where Six Sigma comes to play. Six Sigma methodologies aspire to reduce waste and variability in product and services, thereby, improving the product quality. 

Read Also: Lean Six Sigma: Top tips worth remembering

There are several processes included in the retail sector such as stocking, employee management, merchandising, project displays, stocking etc.  Lean Six Sigma ensures cost reduction in the in-store operations by improving cost management and customer satisfaction.

 Challenges Faced by Retail Sector

Have a look at some of the common challenges faced by the retail giants in the economy of any nation.

Constantly changing inputs from Multiple Departments

Retail Stores constantly receive requests for improvements or modifications from multiple departments simultaneously.  So, the store manager has to make the decision which things are to be left, prioritized or postponed.  This sensitive decision making can even turn the simplest of problems into complex ones and may affect the relation between the managers and employees. 

Tight Budget of Labor Hours

In order to maintain the profitability, the store managers generally manipulate the employee hours which reduces the labor cost. This really makes the things turn worse with the associates as they need to work on the process improvements without affecting the store operations. As a result, process improvement technique is further pushed to the bottom of the priority list.

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High Turnover Due to Inexperience

In the retail industry, the employee turnover rate is 9% higher than other sector industries which directly impact the sustainability of the process improvements. As per quality management trends 2018, the average age of the employees working in the retail sector is between 19 and 25 and their inexperience is the biggest reason causing high turnover rates. This makes the mangers even more cautious while assigning the responsibilities or freedom to make independent decisions.

Constantly Evolving Consumer Demographics

In order to meet the demand of continually changing consumer demographics, the retail stores are forced to make the changes. This result in creating varied experiences for the customers that ultimately leads to confusion.  

Six Sigma and Process Improvement

Now, let’s see how retail sector is evolving by lean six sigma workflow optimization:

Checkout Process

The checkout process is the most critical and crucial customer facing process that happens in the retail sector. For a higher customer loyalty and satisfaction, it is very important to offer an incredible checkout experience. The key processes involved are personnel empowerment, customer engagement, offering personalized services, collecting information in a most effective manner, predicting demand and ensuring customer satisfaction. 

The Six Sigma methodologies are totally customer focused and when they are combined with lean tools, they offer a powerful approach to solving customer focused problems.

Freight Processing

The main aim of freight processing is to drive the sales by keeping inventory levels up and full. The Lean Six Sigma techniques which can prove helpful in improving freight processing are the value work-balancing, stream analysis, streamline tasks, time and motion studies and standard Lean principles.

Planogram Completion

Planogram means the visual model of the product displayed in the retail store so as to attract the customers.  An effective planogram not only helps the customers in making impulsive buying decisions but boosts sale as well for any retail store.

Read Also: The Lean Journey: Taking First Few Steps

Winding Up

Apart from delivering a high-quality experience, businesses now days are under constant pressure to provide top-notch customer satisfaction as well. If customers are on a fixed budget, they tend to be more selective in their choices. Lean Six Sigma Green Belt certification helps to improve the businesses processes, thereby, developing strong customer relationship which is based on quality, professional service and respect.   

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