Recent Successes from the SD Retail Team

• SD Retail worked with a major hard goods retailer to redesign their distribution network. With the declining demand for the client’s core products, the number of distribution facilities needed to be rationalized to reflect the current and forcasted business climate. SD Retail recommended a shift from three to two DC’s to properly support the business and redesigned DC network processes to eliminate a legacy pricing system. SD Retail modeled the improved network, working capital and labor reductions to achieve savings in excess of $60M.

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• A regional apparel chain consisted of approximately 50 stores and had emerged from bankruptcy. Our client wanted a review of all operations to see potential for improvements in store operations and upstream effects of supply chain and merchandising requirements. SD Retail developed a budgeting system that allocated hours and payroll dollars in relation to store and customer needs. Eliminated duplicate and superfluous tasks through implementation of new methods and processes. SD Retail solutions identified in-store savings/re-deployment opportunities totaling 6% of store payroll.

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• A national car care retailer with 1000+ stores lacked training, tools, processes, structure and controls to systematically focus store labor on demand.  SD Retail teamed to assess current state, including staffing and operational limitations, change management challenges and to develop a scheduling time/attendance and reporting process to support testing and to impact quantification of three updated staffing models. Results included a 6.7% improvement in sales, identified labor reallocation opportunities in excess of 10%, and short to medium term sales opportunities in excess of 10%.

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• A 120+ store retailer was not leveraging its multi-channel resources effectively. High volume of store transfers had limited controls and drove excessive costs. SD Retail documented baselines for sell-through rates, costs, labor impact and customer satisfaction. We defined a future process flow for leveraging central inventory and for fulfilling customer requests and created SOPs for new processes. Results included increased omni-channel sales from in-store customers by more than 20 while driving positive comp sales.

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• A luxury apparel chain was struggling with high store labor costs. Non-sales support staff roles were not defined or measured and payroll parameters were not consistently aligned with store characteristics or volumes. SD Retail reviewed all store activities and established baseline productivity measures. In addition, SD Retail analyzed staffing and payroll by store, calculated workload drivers and defined roles for non-sales staff. Results included a reduction of non-sales store payroll by over 10%.

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• A multi-billion dollar, multi-channel sporting goods retailer with various store formats was challenged to accurately allocate labor across stores and consistently manage overall labor needs. SD Retail reviewed all in-store processes and developed labor standards for all activities performed at store level. SD Retail developed a bottoms-up labor budgeting model to allocate labor across stores and departments and implemented process improvements throughout stores to increase productivity and efficiency of staff.  Results included the reduction of the client’s total labor expense by 2.2% and the redeployment of another 2% of labor through enhancements to labor budgeting and scheduling process. Labor redeployment was an enabler to enhance the in-store customer experience.

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• A national $4 billion sporting goods mass merchant with nearly 500 stores struggled to effectively manage freight at store level. SD Retail led an assessment to understand current state challenges, including staffing, physical and operational limitations, identify likely change management challenges  and quantify anticipated impact of consistent, efficient receiving, prep, stocking and overstock management processes. Partnered with client team to develop a standardized door-to-floor and BOH process to improved freight flow. Results included: productivity gains of over 30% in freight management, redeployment of approximately 7.5% of total store labor and improved assessment scores.  The roll out strategy developed resulted in an effective, on-schedule implementation chain-wide. The SD Retail approach throughout the project has now become the clients standard for development and implementation of all field initiatives.

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• A 6,800 store retailer with annual sales of $4.7B was initiating a major workforce transformation initiative and needed experienced partner to help manage workforce opportunities including: Time and Attendance, Labor Scheduling, and Workforce Development. SD Retail managed an Executive level PMO to provide thought-leadership to each workstream. SD Retail led the implementation of Kronos Time and Attendance, developed a rigorous Gatekeeper governance model to clearly define all communication flows and designed and implemented a Task Management solution. Total financial impacts of the project are estimated  at $10M - $20M annually.

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• A regional hardware retailer with over 80 stores and nearly $1 billion in sales was experiencing year over year sales decreases and pressure on the payroll expense line. SD Retail conducted a store operations assessment to evaluate all operational areas within the four walls of the store and determine productivity improvement opportunities. SD Retail led a large, multi-functional team through development and implementation of initiatives that reduced labor required to complete a series of operational tasks allowing the client to repurpose 8.4% of total labor investment. SD Retail’s tools and processes also improved alignment of store labor to customer traffic by 39% and revitalized client’s customer engagement and selling approach.

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• An international paint manufacturer required a new operating model to support the deployment of their sales force in the 1700 stores of their largest client. SD Retail developed several operating models and the associated job descriptions including reporting and ideal spans of control. For each model, specific costs, impact and potential risks were identified and quantified including: variations in costs ranging from a 42% reduction to 20% increase  in investment, staffing designs that varied from a 45% reduction in total associate population to an expansion in coverage based upon the introduction of nearly 1300 part time associates.

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• A luxury retailer’s e-commerce channel had been initially built into available space at an existing DC facility, creating inefficient flows and capacity constraints. The project goal was to improve efficiency, cost and same day shipping percentage very quickly to achieve improvements in time for Q4 without capital expenditure. SD Retail reviewed DC processes and layout to identify short term opportunities. Results included: payroll savings of 13% of total facility hourly wages, reduced shipping costs through review of scheduling and service requirements by 3%, cut dock to stock time by 50% (from 3-4 days to 1-2 days).

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• A 1,500+ store national retailer needed a quick and effective labor scheduling solution to support customer service improvement objectives. Baseline analysis had indicated a great opportunity to more effectively allocate hours by day of week and time of day. SD Retail partnered with a third party to build a low-cost web-based labor scheduling solution based on client requirements. Created initial wire frame of application in only four weeks and initial pilot version was created in only eight weeks and a chainwide rollout of the application in only seven months. SD Retail’s solution supported redesigned in-store selling and repair service capabilities and drove improved JD Power Customer Service ranking from last to second place in 3 years for the mobile communications industry. The new service model continues to deliver a superior in-store customer experience.

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• A specialty retailer retained SD Retail to assess store operating processes and review labor metrics. Company was allocating labor based on contribution in tops down method and wanted to establish baseline for bottoms-up labor budgeting and allocation. SD Retail provided visibility to refreshed associate time use and identified new key focus areas for improvement. Results included improved focus of store staffs: retail employee Idle time was reduced from 21% to 11% and store manager coaching time increased from 5% to 17%.

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• A luxury apparel department store with 3 business channels (full line, off price and e-commerce) and 2 distribution centers on opposite coasts required assistance defining the optimal number and locations of distribution center facilities to accommodate the planned 10 year growth and transportation cost targets. SD Retail leveraged software provided by its partner, Llamasoft, to model and optimize several distribution network scenarios based on different growth projections. Results included: improved service levels across the chain (up to 33% reduction in delivery time), reduced overall Supply Chain costs by 25%, a budgeted savings of $8M, improved efficiencies in product flow to save over $1M in DC operations costs.

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• A national off-price retailer with over 250 stores had significantly reduced SG&A expenses over recent years and was challenged to improve sales floor and management effectiveness; over 55% of store labor hours were used for the execution of general operational tasks resulting and very little labor was dedicated to customer selling on the sales floor. SD Retail conducted an in-depth review of all in-store processes, tools, and roles and responsibilities. SD Retail identified over 60% of store labor being utilized on task work and developed 20 week program to redeploy up to 12% of total labor to customer facing activities. Redeployment of labor will be an enabler to successfully deliver a superior customer experience.

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• A 7,000 + store retailer  was challenged with managing execution levels across 7,000+ sites and was looking to implement a task management system that would streamline communications, improve execution and manage workload capacity. The retailer engaged SD Retail to lead project management efforts to implement an execution management solution with capacity management and communications governance processes for the retail operations planning team. SD Retail teamed with client personnel to clearly define and implement communications governance and capacity management processes to ensure that store workload is carefully managed, timed and supported with corresponding payroll funding. The client achieved over 95% adoption rate within first two weeks of rollout.

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• A national specialty fashion retailer was implementing a workforce management solution and needed an experienced consulting partner to identify in-store activities and corresponding labor requirements. SD Retail built a store activity dictionary aligning like tasks to reduce time needed per activity and establish effective task ownership. SD Retail defined opportunities to streamline tasks, clarified manager’s updated role requirements and corresponding scheduling needs and designed & configured WFM application to meet the complex needs of four separate brands. Results include an additional 15 hours per week per store reallocated to customer facing activities and a vastly improved customer experience.

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• A large regional C-store retailer with over 1,600 stores was challenged with providing consistent customer through-put at point-of-sale (POS). SD Retail conducted an in-depth review of all in-store and store management processes and POS tools and applications at over 30 stores across 6 regions. SD Retail developed and implemented initiatives that improved POS transaction speed by 13%, and streamlined in-store processes and labor management capabilities, and enabled redeployment of 12% of weekly labor to customer facing activities.

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• A $26 billion international, multi-brand, off-price retailer needed an experienced consulting partner to help them develop and implement a workforce management (WFM) system across each of its six divisions. SD Retail developed and implemented a multi-division change management strategy for the WFM system focused on preparing each division for pilot and rollout in consideration of store and home office processes, scheduling practices. SD Retail’s process engaged leadership, field management and store teams early and often to ensure development of a quality solution and to drive high levels of user acceptance. SD Retail delivered an operational readiness program and a pilot strategy that was implemented by each division. Engaged district and store managers effectively, yielding high excitement to begin the pilot process. Initiative was completed on time, on budget, and client realized projected benefits of a world class Workforce Management solution. By placing the right associate, in the right place, at the right time, our client has been able to deliver a world-class customer engagement model.

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• A $60billion+ national drugstore chain’s front end (all non-pharmacy areas) labor productivity lagged relative to competitors for consistent execution of in-stock, pricing accuracy, selling & customer service. Client was looking for a tool to provide visibility to the root causes. The retailer engaged SD Retail to develop an activity-based labor model designed to properly budget labor for in-store customer service and store support. Results included immediately realized savings in excess of $10M with potential recurring savings in excess of $100M annually.

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• SD Retail Consulting partnered with the executive team of a top 20 US big box retailer to identify over $30 million dollars in annualized, recurring expense reduction and productivity improvement opportunities in the corporate headquarters. The changes provided critical savings while improving service levels to the stores and customers. Initial savings were realized within 30 days of the engagement, providing immediate impact to the enterprise and shareholders.

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• SD Retail Consulting recently assisted a major office supplies retailer in streamlining store operational processes in order to reduce store payroll costs and re-allocate hours from tasks to customer facing activities. The SD team reorganized the way store stock was maintained and re-engineered all stock handling processes including receiving, put away, shelf stocking and recovery. In addition, numerous up stream opportunities related to supply chain processes were identified that led to streamlining store tasks. Recurring bottom line improvement: Over $40 million.
  

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• A major east coast arts and crafts specialty retailer determined the need to review current retail pricing by Stock Keeping Unit (SKU). SD Retail Consulting was retained to determine high-level customer impressions of everyday chain-wide pricing and analyze weekly and peak-seasonal promotional performance for three key sub-categories. SD consultants constructed a high-level pricing elasticity index for assigned sub-categories based on the company's actual scan data and incorporated relative performance for everyday base pricing and various promotional pricing campaigns; to maintain base prices competitive with primary competition and determine which weekly promotional pricing tactics should increase total performance and customer traffic. The engagement resulted in increased revenue of 11% and 500 basis point improvement in margin for the combined 3 sub-categories. Pilot results lead to increased analysis on all categories of their business.
  

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• SD Retail Consulting worked with a $5 billion international apparel retailer that was reducing its brand portfolio and needing to streamline headquarter organization and reduce costs. By reviewing corporate functions, cross departmental activities and store support levels, the SD team was able to reduce headcount by 10 – 40% across departments and save over $20 million in costs.
  

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• A major entertainment retailer retained SD Retail Consulting to drive down operating costs throughout its business. SD Retail systematically moved through the organization to identify, test and implement solutions in stores, operations/labor, merchandising, marketing, accounting/finance, visual/communications, IT, etc. Recurring bottom line improvement: $17-20 million.
  

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• A national marine products retailer retained SD Retail Consulting to evaluate processes, tools and organization of the Merchandising and Planning & Replenishment Groups. SD Consultants identified, tested and implemented solutions to reduce expenses and increase revenues through shortened cycle times, inventory reductions and improved sell-through. Recurring bottom line improvement: $20 million.
  

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• Based on previous successful consulting engagements in all main business units for this retailer, an international footwear retailer asked SD Retail Consulting to identify store payroll savings opportunities in the areas of store staffing and scheduling improvements. The goal was to increase time for associates to focus on customer service activities without increasing store payroll. The engagement resulted in labor savings/reallocation of more than 6% while increasing customer facing time from the sales staff.
  

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• SD consultants developed a customized training program for managers, assistant managers and other key store personnel for a regional grocery retailer. The training was designed to improve ad planning, store signage, in-store displays and cross-merchandising. SD Retail Consulting led the development and implementation of a cross-merchandising initiative that increased overall sales and market basket/transaction size. The training program enabled store managers to build more effective displays and improved signage in a de-centralized environment.
  

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