Delivering Efficiency

By Nicole Giannopoulos
Morrisons, a U.K. grocery retailer with more than 450 stores, 132,000 employees and 11 million customers per week, wanted to address operations efficiency as it continues to grow. As one of the largest grocers in the U.K., Morrisons prides itself on being passionate about food, freshness and quality to a unique level. The retailer also operates its own manufacturing unit for vertical integration. What became evident was that many processes were outdated, inefficient and could be improved.

The retailer’s profit recovery team had specifically identified the newspapers and magazines division as an initial focus for profit opportunities and set the goal to significantly increase profits over the course of the current year. The idea being, if significant progress could be made in this division, imagine the impact of a full rollout.

Morrisons was in need of a solution that would serve two key functions: first, to collect data on what processes weren’t working, why, and how they could be fixed; second, to analyze the data in order to address efficiency, profit loss and profitability.

Morrisons solved the problem by using a Profitect module for data analysis, and a three-month pilot of the Profitect Delivery and Receiving module was rolled out across all Morrisons store locations in the newspapers and magazines division.

Profitect provides profit amplification software that enables retailers to discover untapped growth and profit opportunities across the value chain. Increased revenue and reduced costs are achieved by identifying opportunities with prioritized actions throughout the organization, providing scalability, sustainability and accountability.

The retailer began to use the solution to amplify profits within its delivery and receiving processes, and set a goal of returning significant amounts to the bottom line within six months of the project’s go-live date.

The solution was able to quickly identify measurable opportunities within the organization for increasing profit. It also discovered methods for improvement around timing of stock received, recorded and how long it’s in the warehouse. The longer items were in the warehouse, the more unproductive the process.
The findings prompted the retailer to further investigate when stocking was taking place and how long it took. This data then created a better understanding of its top and bottom performing stores. Finding patterns against established benchmarks gave Morrisons insight into which stores were performing well, and what percentage of stores were not.

The availability of data to analyze on a regular basis is now a part of day-to-day operations. Finding or acting on opportunities has provided Morrisons with strong data on not only how the receiving process is performing, but also how individuals are performing at their jobs. Other results include improvement of key KPIs, awareness, compliance and accountability.

The team continues to find opportunities for making the newspapers and magazines division more profitable and plans to expand the Delivery and Receiving module with other categories.

“Morrisons sees Profitect as a strong partner for amplifying our profit opportunities,” said Peter Haste, head of finance (system development) for Morrisons. “We are leveraging the Profitect Suite software solution for a rapid, dynamic and comprehensive approach to amplifying profit opportunities identified in our newspapers and magazines division. If successful in newspapers and magazines, we will look to roll out Profitect’s solution to additional categories.”