Operations

We help boost operational excellence in purchasing, end-to-end supply chain, stores, and omnichannel strategy

What we do

We help retailers attain superior strategy through reliable and efficient fulfillment that ensures customer satisfaction. Simultaneously, we work with clients to closely manage operational costs and protect profits.

Purchasing excellence

We apply advanced analytics to assess performance improvement in indirect spending (including capital-expenditure, or capex, projects) as well as sourcing strategies, such as supplier and partnership selections.

End-to-end supply chain excellence

We use advanced analytics for logistics performance improvement and network optimization within retailers’ supply chains. This enables us to assess demand planning and inventory management in order to manage multichannel order-fulfillment costs while ensuring profitability.

Next-generation store operations

We integrate digital solutions and a lean-operations approach to help clients enhance the in-store customer experience.

Examples of our work

Enhancing savings and customer satisfaction through indirect spend optimization

We worked with a retailer to help lower its store-cleaning costs through an augmented procurement tool kit, a robust assortment of benchmarking and pricing tools, and deep category expertise. This resulted in a 25 percent cost reduction, improved cleaning standards and frontline operations, accelerated business strategy implementation, and fewer customer complaints.

Driving end-to-end supply-chain improvement and inventory reduction with advanced demand planning and inventory analytics

We worked with a national retailer—with more than 5,000 stores challenged by poor merchandise availability—to help with the resulting loss in sales, high supply-chain costs, excess inventory, and significant number of write-offs. By applying advanced demand planning and inventory analytics, we reallocated stock to high-demand stores and set up sustainable targets while monitoring progress over time. This led to $1 billion in inventory savings, a more than 3 percent increase in sales, improved customer-service levels from 96 to 98 percent, and a 20 percent overall reduction on end-to-end supply-chain costs.

Transforming store performance

We helped design a new operating model for a major multinational retailer experiencing years of stagnating sales and poor customer satisfaction. With a sales-growth target of 20 percent, we implemented new management, workforce, stockroom, fitting-room, and checkout processes across the store and achieved our desired target.

Omnichannel supply chain transformation

We helped an iconic fast-growing consumer brand transform into an omnichannel operator with world class direct to customer capabilities. We took a holistic definition of future consumer requirements and future supply chain strategy to design the omnichannel warehouse solution. This enables revenue growth to double, improve speed to market, with next day and same day capabilities at the same time as reducing the cost per unit in the warehouse.

Featured Capabilities

Over the course of more than 400 operations-focused projects in 5 years, we have developed proven tools to help retailers quickly assess their operations, prioritize improvement initiatives, and boost their end-to-end performance. Examples include:

Lean-retail diagnostic

Offers in-store diagnostic tools to identify and quantify waste and test the impact of pilot improvement efforts

Lean-retailing tool kit

Combines more than 30 individual tools to assess and boost frontline performance

Supply-chain-management tool kit

Helps retailers identify weaknesses across the entire supply chain and target areas for improvement

Network-optimization and design tool

Models the flow allocation to optimize the number and location of platforms (distribution centers and warehouses, for instance)

Labor-scheduling tool

Calculates a store's workload based on factors that include size and layout, operating hours, and backroom configuration. This enables retailers to schedule merchandizing and administrative activities, assign staff accordingly, and control costs for an optimal customer experience.

Featured Experts

Frank Sänger
Senior Partner, Cologne
Leads the consumer-goods and retail sector work in Austria, Germany, and Switzerland, and our global work in retail-operations,...
Tomohiko Funaishi
Partner, Tokyo
Supports retail, consumer-packaged-goods, and retail-banking industries across strategy, operations, marketing, and organization...
Praveen Adhi
Senior Partner, Chicago
Transforms retail-store operations, supply chains, and procurement processes through an approach grounded in advanced analytics

Related insights

Expertise

Modern Retail Collective
Issue

Future of retail operations: Winning in a digital era
Article

How to untap the full potential: An integrated—not isolated—view on cost
Article

Next-generation supply chain—transforming your supply chain operating model for a digital world
Article - McKinsey Quarterly

When subpar operations threaten margin growth

How we help clients

Back to practice overview

Connect with our Retail Practice

Contact