February 4, 2008
GHQ: Making the connection
By Suzanne Vita Palazzo
Through a special arrangement, what follows is an excerpt of a current article from Grocery Headquarters magazine, presented here for discussion.
The recent surge of product recalls highlights the importance of fast and efficient communication between headquarters and the stores. However, the swift execution of product recalls is not the only retail task that stands to benefit from streamlined communication. Plenty of day-to-day activities –from promotional planning to workforce management — can benefit from more efficient communication.
“The use of uncoordinated, multiple communication channels require management in headquarters, field and stores to have to go to a variety of different places to find out what they are supposed to do,” said
David Andrews, director of marketing communication for Reflexis Systems. Traditional
methods for disseminating data — voicemail, e-mail, employee newsletters and
three-ring binders — don’t provide a central source for the most current information
and can get lost in a sea of other messages.
Mr. Andrews notes that a fragmented
approach to communication can lead to frustration at many levels of the organization.
“Every department in HQ thinks their project is the most important,” he said. “This leaves store managers to prioritize on their own, and store managers’ priorities and particular skill sets may not be aligned with the goals of the retailer.”
Portal solutions, such as those provided by Reflexis, effectively combine key performance indicators with task management applications to distribute messages that can be tracked to completion.
By using technology to open up the channels of communication, retailers can increase store compliance with time-sensitive weekly and seasonal promotions.
“Today, with the number of items that are in play, it’s very difficult for retailers to give each item the right attention to make sure that it’s effective and drives at the business objectives of the given promotion,” said Kevin Sterneckert, senior director of strategy, merchandise planning, optimization and supply chain for retail at Oracle. “So what most retailers do is they follow the law of averages. They work on the very important items and then they do a copy from last year and expect similar behaviors that they realized a year ago for the same time period.”
For retailers that remain skeptical that investing in bundled communicative
solutions will result in a tangible benefit to their bottom lines, additional
data from the Gartner report just may sway their stance. According to the
research, one large supermarket chain reported a 3.47 percent improvement
in same-store sales during the first 90 days of implementation of the task
management solution. Moreover, the chain also reported a $30 million reduction
in printing, copying and distribution of materials to stores.
“These solutions can actually deliver true value to the enterprise. Once you get the business involved, you can really identify the true requirements needed for those solutions,” said Joanna Kennedy, senior marketing analyst for Tomax. “I feel like a lot of companies fall into that trap of thinking that it’s not a business solution but that it’s a necessary evil.”
Discussion Question: What do you think of the potential of these emerging portal solutions for improving task management at the store level? What will be the challenges in their execution?
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Responding to one-off situations like product recalls is probably the least interesting facet of this approach. Every-day, effective merchandising implementation is the name of the game. This is much more than a top-down command structure that ensures orders are delivered to store-level underlings. It should incorporate an active, real-time, communications network that connects plan to action, detects gaps, and makes shelf conditions visible.
In-store implementation is the challenge of our era. For two decades, this has been the missing link in category management; the overlooked factor in promotion planning; the unseen “elephant in the room” behind out of stocks and inventory voids. Outfitting store level folks with Blackberries so they can get more emails faster won’t make their decisions better or lighten their ridiculous implementation workloads. But tuning the system to provide real-time status, accountability, and intelligent loss of work will work wonders.
Any communication program that can relieve the store manager from time-consuming “back room paper, screen and phone work” and permit him/her time to greet customers as they come into the store’s front room would be a blessing to retailing.
Portal solutions that could combine key performance indicators desired by home office with task management applications at store level, and can be tracked to effective compliance, would be worthwhile. And if Reflexis can reduce the time and work punch into the store manager’s solar plexus via a faster, more efficient communications process (as well as to other store department heads), it would be a winner. But as Frank said, it would have to be controlled.
The discontinuities across today’s retail organization extend beyond just home office to store communications, which are legend. They also extend across the home office. Ever met a retailer who thought the company has a unified merchandise plan? Ever met a logistics VP or director who was definitive on when merchandise was going to arrive in the distribution center?
On one level, the problem is straightforward and simple. Retailers have just gotten too big, and thus too stove piped. Yes, the root problem is the notion that “this is the way they’ve always done it” but in days gone by, one department could sort of “sniff out” what another was up to and play catch-up. Having worked for small retailers at the end of my CIO days, I found that to be the case often. Hallway conversations were an invaluable source of information. That was the way we used to do it.
Now, we need proxies for those conversations. My opinion? Retail Operations Management should run across the entire enterprise, not just home office to store.
These are the right tools for the right time. The opportunity is huge.
I have never met a store manager who claimed he had too little paper work. One reason store managers spend so little time on the floor is they are reading e-mails, completing forms and replying to a long list of questions. This is above and beyond basics like labor scheduling, promotional ordering, etc.
Years ago, an EVP once told me he would never allow CPG sales representatives into his stores if he was sure the stores were executing the plan.
Better digital communications are only part of the solution. Control of this process is greatly needed. Every communication to the store should have both a priority and time estimate. This time estimate includes reading and responding. Establish a maximum per day for store management. For example the store manager should not spend more than two hours a day on paper/electronic work. Department managers may have an hour maximum.
Headquarters must control this process. Everyone at headquarters believes they have the most important issue. Store managers know otherwise.
This approach makes a ton of sense if people in the field use it. Most retailers overwhelm the field with communications and the result is lackluster attention (or ignoring much of it completely). The comment on including the field in the design of the ultimate solution is a great one, as if they’re involved in how it comes together according to their needs, they’re much more likely to buy into it and use it.
First, a disclaimer: I used to work for StorePerform, now RedPrairie, another provider of this type of solution. I’ve seen the same type of results cited in the article, and seen the same organizational barriers as well. The biggest barrier is “we’ve always done it this way,” followed by the challenge of coordinating across multiple departments at a corporate level to make life easier for the stores–merchandising, marketing, operations, finance, and HR all have to get together and coordinate their communications to stores for task management to be successful. Otherwise it just becomes one more thing “corporate is doing to” the store manager.
Optimization is certainly the buzzword of the day, but it amazes me how often corporate departments underestimate the impact of the store as the bottleneck, and neglect to ‘optimize’ around that bottleneck. There are only so many hours in a day, and so many people available to do the work in the store. Without something like task management to act as a reality check at the corporate level, and a critical tool for prioritizing, organizing, and tracking work that needs to be done at the store level, the best laid retail strategies are only so much shouting into the wind.
A simple task that will convince any senior manager that something needs to be done about store communication used to be sampling the store mail. We set up a “ghost” store in the mail room one time and collected every piece of mail that was distributed to the stores. It was very revealing how many unnecessary and conflicting instructions went to the store. The challenge today is that all that communication is hidden in emails, weekly promotion “portals,” and via direct conversations over the internal VOIP network. Store personnel are more accessible than ever, and probably more confused.
Everyone keeps their “A, B, C, File”…the list of things you must do, will do without being reminded, and the ones you have no time for and will only get to if the boss repeats their request. For the stores, this is a real challenge because often there are multiple bosses–operations wants to minimize labor costs, merchandising wants to maximize display setup, and the customer wants a speedy checkout.
It takes a good supervisor to help the store work through the priorities. Technology can almost be an enemy in this effort because it can make it too simple to reach the store. Supervisors have to maintain contact with the central departments to avoid or raise awareness of the conflicts quickly so that mixed messages are avoided or cleared up quickly.
Many organizations have reduced the supervisory layer, so they need to make sure the central staff has clear messages themselves. If the senior management can direct the central staff with messages that reflect the needs of the store, then they can avoid the avalanche of confusion at store level.
If you could create a top ten list of gripes from managers in the retail industry, communication would be in the top 5. How many times have I heard “I didn’t know that” or “I never received that memo.” Getting the manager a blackberry or some other communication device would really streamline the communication cycle.
I am starting to see that in the retail industry but what shocks me is that some of the managers are using their own personal phone or device to communicate with corporate. Companies should invest the money and get their managers ‘wired’. It would increase productivity and eliminate communication snags.
Retail chains who aren’t managing their communication to and from store personnel aren’t measuring the cost or benefit of the store workload. They’re just asking for poor compliance.
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Responding to one-off situations like product recalls is probably the least interesting facet of this approach. Every-day, effective merchandising implementation is the name of the game. This is much more than a top-down command structure that ensures orders are delivered to store-level underlings. It should incorporate an active, real-time, communications network that connects plan to action, detects gaps, and makes shelf conditions visible.
In-store implementation is the challenge of our era. For two decades, this has been the missing link in category management; the overlooked factor in promotion planning; the unseen “elephant in the room” behind out of stocks and inventory voids. Outfitting store level folks with Blackberries so they can get more emails faster won’t make their decisions better or lighten their ridiculous implementation workloads. But tuning the system to provide real-time status, accountability, and intelligent loss of work will work wonders.
Any communication program that can relieve the store manager from time-consuming “back room paper, screen and phone work” and permit him/her time to greet customers as they come into the store’s front room would be a blessing to retailing.
Portal solutions that could combine key performance indicators desired by home office with task management applications at store level, and can be tracked to effective compliance, would be worthwhile. And if Reflexis can reduce the time and work punch into the store manager’s solar plexus via a faster, more efficient communications process (as well as to other store department heads), it would be a winner. But as Frank said, it would have to be controlled.
The discontinuities across today’s retail organization extend beyond just home office to store communications, which are legend. They also extend across the home office. Ever met a retailer who thought the company has a unified merchandise plan? Ever met a logistics VP or director who was definitive on when merchandise was going to arrive in the distribution center?
On one level, the problem is straightforward and simple. Retailers have just gotten too big, and thus too stove piped. Yes, the root problem is the notion that “this is the way they’ve always done it” but in days gone by, one department could sort of “sniff out” what another was up to and play catch-up. Having worked for small retailers at the end of my CIO days, I found that to be the case often. Hallway conversations were an invaluable source of information. That was the way we used to do it.
Now, we need proxies for those conversations. My opinion? Retail Operations Management should run across the entire enterprise, not just home office to store.
These are the right tools for the right time. The opportunity is huge.
I have never met a store manager who claimed he had too little paper work. One reason store managers spend so little time on the floor is they are reading e-mails, completing forms and replying to a long list of questions. This is above and beyond basics like labor scheduling, promotional ordering, etc.
Years ago, an EVP once told me he would never allow CPG sales representatives into his stores if he was sure the stores were executing the plan.
Better digital communications are only part of the solution. Control of this process is greatly needed. Every communication to the store should have both a priority and time estimate. This time estimate includes reading and responding. Establish a maximum per day for store management. For example the store manager should not spend more than two hours a day on paper/electronic work. Department managers may have an hour maximum.
Headquarters must control this process. Everyone at headquarters believes they have the most important issue. Store managers know otherwise.
This approach makes a ton of sense if people in the field use it. Most retailers overwhelm the field with communications and the result is lackluster attention (or ignoring much of it completely). The comment on including the field in the design of the ultimate solution is a great one, as if they’re involved in how it comes together according to their needs, they’re much more likely to buy into it and use it.
First, a disclaimer: I used to work for StorePerform, now RedPrairie, another provider of this type of solution. I’ve seen the same type of results cited in the article, and seen the same organizational barriers as well. The biggest barrier is “we’ve always done it this way,” followed by the challenge of coordinating across multiple departments at a corporate level to make life easier for the stores–merchandising, marketing, operations, finance, and HR all have to get together and coordinate their communications to stores for task management to be successful. Otherwise it just becomes one more thing “corporate is doing to” the store manager.
Optimization is certainly the buzzword of the day, but it amazes me how often corporate departments underestimate the impact of the store as the bottleneck, and neglect to ‘optimize’ around that bottleneck. There are only so many hours in a day, and so many people available to do the work in the store. Without something like task management to act as a reality check at the corporate level, and a critical tool for prioritizing, organizing, and tracking work that needs to be done at the store level, the best laid retail strategies are only so much shouting into the wind.
A simple task that will convince any senior manager that something needs to be done about store communication used to be sampling the store mail. We set up a “ghost” store in the mail room one time and collected every piece of mail that was distributed to the stores. It was very revealing how many unnecessary and conflicting instructions went to the store. The challenge today is that all that communication is hidden in emails, weekly promotion “portals,” and via direct conversations over the internal VOIP network. Store personnel are more accessible than ever, and probably more confused.
Everyone keeps their “A, B, C, File”…the list of things you must do, will do without being reminded, and the ones you have no time for and will only get to if the boss repeats their request. For the stores, this is a real challenge because often there are multiple bosses–operations wants to minimize labor costs, merchandising wants to maximize display setup, and the customer wants a speedy checkout.
It takes a good supervisor to help the store work through the priorities. Technology can almost be an enemy in this effort because it can make it too simple to reach the store. Supervisors have to maintain contact with the central departments to avoid or raise awareness of the conflicts quickly so that mixed messages are avoided or cleared up quickly.
Many organizations have reduced the supervisory layer, so they need to make sure the central staff has clear messages themselves. If the senior management can direct the central staff with messages that reflect the needs of the store, then they can avoid the avalanche of confusion at store level.
If you could create a top ten list of gripes from managers in the retail industry, communication would be in the top 5. How many times have I heard “I didn’t know that” or “I never received that memo.” Getting the manager a blackberry or some other communication device would really streamline the communication cycle.
I am starting to see that in the retail industry but what shocks me is that some of the managers are using their own personal phone or device to communicate with corporate. Companies should invest the money and get their managers ‘wired’. It would increase productivity and eliminate communication snags.
Retail chains who aren’t managing their communication to and from store personnel aren’t measuring the cost or benefit of the store workload. They’re just asking for poor compliance.