Cutting Costs & Driving Customer Satisfaction for a High Street Giant

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Our client is a household name and leading department store in the UK. Founded in the early twentieth century, the client has re-invented itself, adapted to the changing economic times, and emerged as one of the most prominent global businesses. Known to have both a large online presence and retail estate of 50+ stores across the UK, they offer customers a diverse range of products, from grocery to fashion and furniture.

MIGSO-PCUBED were engaged with the client through our strategic partnership as a trusted supplier of Project Management as a Service (PMaaS). PMaaS is an adaptable consulting service that allows clients to hire project management capability to fulfil their project and programme needs. It provides a more efficient and value driven approach to clients, allowing project management capabilities to be utilized quickly.

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Operational costs & customer challenges

As an industry, retail has faced significant challenges, particularly around the changes to customer behaviours due to the cost-of-living inflation and post-COVID normalisation. To counter these, retailers have had to maximise margin opportunities by having efficient operational processes whilst keeping up a positive public perception regarding customer satisfaction and value for money causing a more competitive market environment. Due to this set of challenges, our client had issues with reaching in-year sales volume targets as a result of market volatility. In 2022, in order to improve their margins, they needed to task their fulfilment centres with removing multi-million pounds of operating costs whilst maintaining customer performance.

At the same time, the client was in a difficult situation, parting ways with their existing partner organisation who were providing the end-to-end ecommerce fulfilment services. One of the key metrics which was important to the client was measuring complete fulfilment – where items that are ordered are delivered to a customer without substitution or non-fulfilment. Due to the fractious circumstances, the client was unable to meet these targets averaging 17% complete orders vs the competitors’ average of 75%. This had detrimental consequences for customer satisfaction which also had a substantial commercial knock-on effect, costing the client around £150M per annum in lost revenue.

Photo by The Nix Company on Unsplash

Driving transformational solutions

MP supported the client with a range of business solutions to overcome the critical challenges they were facing.

Project Management as a Service (PMaaS)

As part of our Project Management as a Service (PMaaS) capability, we embedded our consultants within the client’s team and environment. PMaaS being an adaptable model, means our clients could address their own project management needs whilst we maintained the responsibilities on the project performance. Our MP consultant was responsible for working closely with them, and by utilising the team’s specialist knowledge, we were able to pull together an operational cost reduction program which suited the retailer’s desired outcomes. Throughout the process, MP facilitated workshops to identify, categorise and assign benefit targets to each initiative using elements of our Lean Innovation Toolkit.

Following the successful implementation of our Lean Innovation toolkit, we introduced a program framework to deliver change whilst maintaining the client’s operational performance.

After quickly mobilising the programme, it resulted in a 95% on track delivery indicator by end of Q1 2022. This then led to an operational cost removal of £2.1M in H1 2022, reaching around £3.5M by year end.

Consultant PMO
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Applying Lean in Retail

MP utilised elements of the Lean Innovation Toolkit to facilitate sessions with the client to identify root causes and common themes impacting the complete fulfilment orders metric. We define Lean Innovation as a holistic solution that can deliver innovation by continuously re-engineering process, services or products to reduce waste, optimize performance and maximise benefits. While similar to Lean Six Sigma, a business improvement methodology, with shared core principles, our Lean Innovation provides a blended framework with tools and techniques that are also underpinned by Change Management principles by ensuring the organisations readiness to adopt change is taken into consideration.

Establishing Project Portfolio Management

We also applied PPM (project portfolio management)  mobilisation techniques to define a roadmap of change activity and performance targets for complete orders over a 2-year period. Once this was defined, MP agreed on a transformation roadmap with the client’s leadership team. This included addressing a behavioural change plan, operational processes, reporting, and any IT capability development. 

The two plans were issued focusing on nurturing the behaviours across all retail leadership and staff within branches, as well as delivering a clear roadmap to achieve complete fulfilment of 35% in 2022 and 65% by 2024​.

The Benefits

Overall, by deploying a variety of tailored solutions, MP significantly helped the client deliver their objective of reducing the operational costs down by £2.1M in H1 2022, and £3.5M by the end of 2022. We identified and engaged with the various communities within the process flow to ensure they (1) could identify with the need for change, (2) understood how the changes would impact their day-to-day and behaviours and (3) embracing the change by championing and demonstrating the right engagement. Likewise, the learnings taken from the transformational programs put them on the right track to reach their fulfilment targets by having leaders within the organisation promoted champion self-start initiatives to develop a continuous improvement culture. 

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