Business process redesign and cost reduction programme – health & beauty retailer Ukraine

Business process redesign private label FRC

The challenge

A leading household and beauty retailer in the CEE became aware of far lower staffing levels of a similar concept store in Western Europe.

Concern emerged that Western European competition would be capable of market entry with potentially greater retail efficiencies and a resulting lower retail pricing position. This competitive edge posed a great threat to the client.

The strategy

A detailed analysis of the client’s retail operation was set up and the results mapped against global best practice.

All processes were carefully documented and translated into a graphic format, to allow both management and our own consultants to easily search out efficiency failings.

The method

Through detailed workshops involving representatives from all levels of retail operations, the retail organisation was reconstructed to increase efficiency. Processes were completely overhauled. Unnecessary bureaucracy was challenged and new job descriptions resulted. Performance-related pay initiatives were introduced to incentivise on-going improvement.

The results

The result was a 35% reduction in labour hours!

Staff and management reported a feeling of greater empowerment and motivation (a great result for a staff reduction programme!). Remaining staff and management could earn up to 20% more and this drastically reduced labour turnover. Retaining talent and the reduced cost of training new employees was a welcome side effect.
Together with the performance-related pay structure the refocused retail operations department produced 47% higher productivity, 24% lower costs and a halving of its store personnel turnover rate.