Why Retail Operations is like Air Traffic Controlby David Walton (No Comments )
Whether it is new ranges, POS roll-outs, staff training or store refits, the level of change in retail is increasing. Retail is a very competitive landscape and we have seen high-profile retailers come unstuck by a lack of investment in stores or poor implementation of change in retail stores.
Retailers cannot do everything that they would want so they must prioritise their projects and activities. This is a normal process in the budgeting and planning cycles. What is not often considered, however, is the phasing and timing of these activities and projects.
It’s not just a case of managing the pace of change in stores, but also while the change is being implemented, making sure the stores can operate effectively and are not overwhelmed by too much change.
Change initiatives can be costly and they are usually designed to improve performance so it is important that they are implemented successfully and as efficiently as possible. So why is this like air traffic control?
Air Traffic Control
The key objective for air traffic control is to land as many planes as quickly as possible without an accident. This is a tricky balance. You can almost guarantee no crashes if you land as few planes as possible, i.e. increase the intervals between the landings. However, if you look at Heathrow Airport, our local airport, and one of the world’s busiest airports, a plane is landing every 45 seconds. Heathrow only has 2 runways and, as a commercial enterprise, it has to maximize the number of safe landings.
Retailers have so much change to implement at stores, they cannot afford to have too big a time interval between the various initiatives. So retailers also have to ‘land changes’ in quick succession without any accidents!
Fortunately, an ‘accident’ in implementing change at a store is likely to be a failed IT implementation or a promotion that is poorly implemented. Similar to air traffic control, retail operations need to land as many changes as possible without accidents.
I can’t confess to have come up with this analogy myself. We were working with one of our clients implementing PM3 and their operations team was called Air Traffic Control (ATC). The analogy works well.
How Does PM3 help with ‘Retail ATC’?
Bestoutcome has worked with a number of organisations to deliver a solution that addresses the ATC of retail change. In the ATC analogy, the change initiative is the plane and the runway is the store, or more specifically, the people in the store.
The air traffic controllers have worked out that the maximum change (threshold) of the runway is 45 seconds. If you try and land planes at a faster rate, i.e. sub 45 seconds, a crash will not be too far away.
In retail, you need to work out your store threshold for absorbing new initiatives (planes). It could be that each store is similar in size and therefore the change threshold is the same. Alternatively, store size in terms of staff numbers may vary so that a large store (runway) can absorb more changes (planes) than a smaller store.
- Establish the level of change that a store can absorb in any given week. For a greater level of granularity you could establish the change threshold by key role. Initially, we would recommend establishing change thresholds at store level.
- Import the store estate into PM3, Bestoutcome’s tool for managing change in stores. Assign the threshold for change for each store. This threshold is usually expressed in hours per week, i.e. how many hours per week can be added to a store’s operational workload that will not affect the operations and leave ‘change space’ to carry out what is required for the change.
- Update the Calendar in PM3 with events, e.g. Mother’s day, Easter, etc. It is important to understand when change activities overlap with a significant trading event. You are likely to land less initiatives at stores during a key store event like Mother’s day.
- Input into PM3 an activity, e.g. promotion or a project activity. Assign resource estimates by role for these activities
- Roll-out these activities to the relevant stores.
- Use PM3 to show change spike by store, by brand or by region.
If a weekly change threshold is breached, take action to either defer change or to augment store’s resources to absorb the change.
Although implementing change in retail stores is not life or death as is landing planes on a runway, there are some similarities in the process of retail operations and air traffic control.
To ensure change is implemented in stores as quickly as possible, without any plane crashes, requires a tool like PM3 and a mindset that realizes that people like runways can only absorb so much change.