This assignment consists of 2 parts.
Part 1 describes a retail grocery chain that has implemented lean operations. Part 2? You'll just have to read it.
Common goals, among others, of lean operations are:
1. Flexibility
2. Reduced inventory
3. Time efficiency
4. Reduction in direct costs
For Part 1, describe how the company achieves each of the above four goals. Some of your responses may contribute to more than one goal. Be specific and be thorough. Do not generalize. (Bullets and numbered lists would be great.)
Part 1
Byco opened its first retail store in Denmark in 1938. 75 years later, the company is a reputable retailer with more than 8,000 stores in Europe, Scandinavia and the U.S. During the past 20 years, Byco's strategy has been to provide products that are anywhere from 10% to 25% cheaper than its competitors with no compromise in quality.
Employees at Byco undergo extensive employee training on a continuing basis which enables most employees to be very knowledgeable about all departments and all aspects of store operations. Wages are significantly higher and turnover is significantly less than the industry standard.
Byco has established win-win relationships with its suppliers. The company continuously improves its product offering by hiring highly paid and experienced buyers. Byco carries a limited number of varieties of its products, relative to its competitors; however, their products are high quality and exceed standards set by consumer legislation. Byco's suppliers deliver products in display-ready packages. Each store has a large loading platform where forklifts transport incoming products directly to the sales floor.
All stores are open from 9am to 7pm, Monday - Saturday and 11am to 5pm on Sunday. Grocery carts are located at the entrance to the store. Customers pay a deposit for use of a cart by dropping 50¢ into an automated till. The 50¢ is returned to the customer when the customer returns the cart to a locked position in the queue of grocery carts. At any point in time, a store manager can determine the approximate number of shoppers in the store by getting a read-out of the number of in-use carts.
Customers queue up in a single line to be checked out by the next available cashier. Products display multiple bar codes. After all items are scanned, they are returned to the shopper's cart. The shopper then proceeds to a bagging station where the shopper bags his/her products. The shopper can either provide his/her own bags or purchase large recyclable bags at the bagging station for $1 each.
Byco's major competitors have profit margins of about 1.7%. Byco has managed to achieve about a 2% profit margin while passing on a 10%-25% cost savings to its customers.
Part 2
We've all been in a situation where we've had to deal with inefficiency or waste that is costly, maddening or both. It may have been at work or dealing with a company as a customer. Describe the situation, point out how it fails at least one "lean operations" characteristic and what you'd do to remedy the situation. No more than 1⁄2 page please.
Example: At a recent visit to a facility that was to perform a stress test, the check-in queue was very long, leading to an excessive wait for those of us wanting to check in. I noticed another person behind the desk and asked if she could open up the other station to check in patients. She responded "I check patients out." Not a single person was waiting to be checked out. Cross training of workers (flexibility) could have greatly eliminated the non-value added activity of customer wait time.