Front end optimization - simplified .ppt

Front end optimization

1. DRAFTDRAFT
Retail Front End Optimization Retail Front End Optimization

2. 2 ©IBM Corporation
Contents
Problem Definition and IBM Offering OverviewProblem Definition and IBM Offering Overview
ApproachApproach
Client ExamplesClient Examples
The Path ForwardThe Path Forward

3. 3 ©IBM Corporation
Today’s retail store environment is increasingly challenging due
to difficulties attracting and retaining staff, intensified
competition for customers and high operating costs
Employee turnover is among the top
ten challenges retailers face in
managing their business –average
employee turnover in the retail
industry is 200%
Multi-channel retailing and elevated
customer expectations have
intensified competition, making
customer loyalty and satisfaction
keys to success
Increasingly thin margins for many
retailers have put even greater
pressure to squeeze value out of
retail costs
Approximate Retail Cost Structure
COGS
SG&A
Promote
Distribute
Buy
•SG&A (store operations) consumes
between 12-20% of a retailer’s
Gross Profit Dollars
•Within SG&A, Labor represents the
single largest expense, (4-10%), of
which roughly one-third is expended
supporting front-end operations
problem definition
Source: IDC

4. 4 ©IBM Corporation
Optimized front end operations can dramatically improve store
level staff productivity while increasing customer satisfaction
and throughput and reducing operating costs
•What is the most effective way to identify, evaluate and
measure my store productivity issues?
•How are my competitors and other businesses leveraging
solutions and best practices to solve common business
problems?
•What business value can I create by improving processes,
technologies and creating new store operating practices?
•What are the key technologies and operations strategies I
should be considering as I change my business?
StrategyStrategy
BenchmarkBenchmark
BusinessBusiness
BenefitBenefit
TechnologyTechnology
Let IBM assist you in defining the following…Let IBM assist you in defining the following…
problem definition

5. 5 ©IBM Corporation
IBM’s Retail Front End Optimization Offering
DefinitionDefinition
Value Value
PropositionProposition
Pain PointsPain Points
•Increasing operational costs without corresponding revenue increases
•Escalating labor costs exacerbated by high staff turnover causing competitive
disadvantage
•Increasing customer desertion rate
•Inefficient POS layout and design
•Outdated POS functionality and capability unable to support today’s internal and
external demands
IBM’s Retail Front End Optimization will enable retailers to improve efficiency
and maximize their labor investment in the following key areas:
IBM offering overview
Improve customer satisfaction through more efficient
front end processes, appealing layout and design
and engaged staff.
Customer SatisfactionCustomer Satisfaction
Optimize store coverage with existing labor and
enable proactive identification of issues
Labor ManagementLabor Management
Minimize shrink associated with poorly defined and/or
improperly executed front end processes
Inventory Security / AccuracyInventory Security / Accuracy
Reduce time and costs associated with checkout,
enabling existing store staff to serve more customers
Customer ThroughputCustomer Throughput
A comprehensive evaluation of your front end operations to identify improvement A comprehensive evaluation of your front end operations to identify improvement
opportunities, incorporating business practices and policies, equipment, layout opportunities, incorporating business practices and policies, equipment, layout
and design, and supporting metrics to drive continuous improvement.and design, and supporting metrics to drive continuous improvement.

6. 6 ©IBM Corporation
The ability to identify, address and measure retail front end
improvement opportunities can have a dramatic impact on retail
front end operations
Increase Customer Satisfaction Increase Customer Satisfaction
Removing unnecessary items from checkout can improve customer experience through
better visual appeal and improved transaction time and scanning accuracy
Proper and prompt management of promotional/sale signage improves customer
experience and can reduce bottlenecks caused by customer confusion
Repositioning security deactivation pads to align with checkout process can reduce
instances of erroneous security alerts and improve customer experience
Implementing or redesigning signage, lights and other visual clues improves customer
satisfaction by ensuring customers know which checkout lanes are open
Reviewing policies, thresholds and procedures for price overrides can have a significant
impact on customer satisfaction by mitigating the necessity to wait for a response
Reviewing policies and procedures for “employee sales” to minimize approvals required
during customer selling periods, increases throughput and customer satisfaction
Source: Estimates based on IBM client engagements (multiple retail segments).
Note: These are representative results based on previous clients; actual results may vary.
IBM offering overview

7. 7 ©IBM Corporation
The ability to identify, address and measure retail front end
improvement opportunities can have a dramatic impact on retail
front end operations
Improve Customer ThroughputImprove Customer Throughput
Training customers to have ID’s ready for all non-cash transactions can improve
transaction time by 10-30 seconds
Empowering cashiers with ability to manually input or over-ride prices (up to a certain
threshold) can improve transaction time by 25-30 seconds in the 10% of transactions
requiring price lookups
Encouraging customers to retrieve tender while the cashier is scanning items can
minimize customer time spent “fishing” for cash, credit cards, etc.
Placing bags immediately after scanner and below counter height can eliminate 11-15
seconds of transaction time
Eliminating need to write on, staple or paper clip charge card slips can reduce transaction
time by 5-7 seconds
Physical work environment improvements can elevate cashier productivity by 2-15%,
primarily due to (a) change in style of checkout station and (b) change in arrangement of
equipment within checkout station.
Equipment and technology improvements and adjustments can positively impact
throughput (varies by equipment)
IBM offering overview
Sources: Various external industry studies; estimates based on IBM client engagements (multiple retail segments).
Note: These are representative results based on previous clients; actual results may vary.

8. 8 ©IBM Corporation
Downstream impacts of improving front end operations include
better ability to manage inventory and labor
Improve Inventory Security and AccuracyImprove Inventory Security and Accuracy
Implementing and monitoring consistent checkout processes minimizes negative
downstream effects on inventory (I.e., more accurate scanning at POS translates to better
inventory decrementing)
Training employees on product lines and assortment minimizes instances of shrink due to
inappropriate identification of merchandise
Assigning cashier cash / till accountability and use of video / surveillance systems can
reduce employee theft (estimated at $1,023 per year per employee)
Proper installation, use (procedures), and maintenance of Electronic Article Surveillance
(EAS) systems can reduce cashier “sweethearting” and consumer shoplifting.
IBM offering overview
Sources: Penn Sate University white paper; estimates based on IBM client engagements (multiple retail segments).
Note: These are representative results based on previous clients; actual results may vary.

9. 9 ©IBM Corporation
Downstream impacts of improving front end operations include
better ability to manage inventory and labor
Improve Labor ManagementImprove Labor Management
Better working environments can reduce staff and management turnover (estimated cost
per turnover occurrence is $2,500 per staff member and $25,000 per manager)
Revisions to labor management procedures, policies and new applications can identify
labor law violations and minimize chances of fines (estimated fine for labor law violations
is between $800 and $1,000 per occurrence)
IBM offering overview
Sources: Society of Human Resource Management; U.S. Department of Labor; Associated Press.
Note: These are representative results based on previous clients; actual results may vary.

10. 10 ©IBM Corporation
Contents
Problem Definition and IBM Offering OverviewProblem Definition and IBM Offering Overview
Approach
Client ExamplesClient Examples
The Path ForwardThe Path Forward

11. 11 ©IBM Corporation
1b. Assess 1b. Assess
Opportunities & Opportunities &
Best PracticesBest Practices
IBM Business Innovation Services follows a comprehensive
approach to achieving Retail Front End Optimization
0. Prepare & 0. Prepare &
PrioritizePrioritize
APPROACH and SAMPLE RESULTS
2-3 Weeks 2-3 Weeks 4-6 Weeks 4-6 Weeks
IBM approach
1a. Prepare for & 1a. Prepare for &
Conduct Store Conduct Store
VisitsVisits
1c. Conduct Detailed Video 1c. Conduct Detailed Video
Analysis Analysis
1d. Develop 1d. Develop
Pilot Pilot
RecommenRecommen
dationsdations
3a. Pilot Quick 3a. Pilot Quick
HitsHits
3b. Pilot Strategic Initiatives3b. Pilot Strategic Initiatives
3c. Implement 3c. Implement
New New
Operating Operating
ModelModel
Store ObservationsStore Observations
Estimated Timeline
4. Perform Change Management Activities4. Perform Change Management Activities
2c. Perform Data 2c. Perform Data
Discovery & Discovery &
Generate Generate
ReportsReports
2b. Perform Data 2b. Perform Data
Mapping Mapping
2a. ID Front End 2a. ID Front End
Productivity Productivity
Metrics & Metrics &
ReportsReports
2d. Pilot Initial 2d. Pilot Initial
Reports and Reports and
Data ModelsData Models
Productivity MetricsProductivity Metrics

12. 12 ©IBM Corporation
1b. Asse ss 1b. Asse ss
Opport uni tie s & Opport uni tie s &
Be st Pra cticesBe st Pra ctices
0. Pre pare & 0. Pre pare &
PrioritizePrioritize
1a . Pre pa re for & 1a . Pre pa re for &
Condu ct Store Condu ct Store
Visi tsVisi ts
1c. Condu ct De ta i le d Vi de o 1c. Condu ct De ta i le d Vi de o
Ana lysi s Ana lysi s
1d. De ve l op 1d. De ve l op
Pil ot Pil ot
Re comm e nRe comm e n
dationsdations
3a . Pil ot Quick 3a . Pil ot Quick
Hit sHit s
3b. Pi lot Stra te gic Ini ti a ti ve s3b. Pi lot Stra te gic Ini ti a ti ve s
3c. Im pleme nt 3c. Im pleme nt
Ne w Ne w
Ope ra ting Ope ra ting
Mode lMode l
Store ObservationsStore Observations
4. Pe rform Cha nge Ma na ge ment Acti vitie s4. Pe rform Cha nge Ma na ge ment Acti vitie s
2c. Pe rform Da ta 2c. Pe rform Da ta
Di scove ry & Di scove ry &
Ge ne ra te Ge ne ra te
Re port sRe port s
2b. Pe rform Da ta 2b. Pe rform Da ta
Ma pping Ma pping
2a . ID Front End 2a . ID Front End
Producti vi ty Producti vi ty
Me tri cs & Me tri cs &
Re port sRe port s
2d. Pi lot Ini tia l 2d. Pi lot Ini tia l
Re ports a nd Re ports a nd
Da ta Mode lsDa ta Mode ls
Productivity MetricsProductivity Metrics
We use a structured approach to gathering information from live
store environments and developing fact-based findings and
recommendations relative to improving front end operations
Performing store observations enables the project team to quickly validate
and / or identify front end related issues and opportunities
The observation work, areas of opportunity and retail best practices are used
to structure recommendations for clients relative to their retail environments
Recommendations are prioritized based on anticipated cost, time to
implement, resource requirements, etc. into Quick Hits and Strategic
Initiatives
1b. Assess 1b. Assess
Opportunities & Opportunities &
Best PracticesBest Practices
1a. Prepare for & 1a. Prepare for &
Conduct Store Conduct Store
VisitsVisits
1c. Conduct Detailed Video 1c. Conduct Detailed Video
Analysis Analysis
1d. Develop 1d. Develop
Pilot Pilot
RecommenRecommen
dationsdations
Store ObservationsStore Observations
IBM approach

13. 13 ©IBM Corporation
1b. Asse ss 1b. Asse ss
Opport uni tie s & Opport uni tie s &
Be st Pra cticesBe st Pra ctices
0. Pre pare & 0. Pre pare &
PrioritizePrioritize
1a . Pre pa re for & 1a . Pre pa re for &
Condu ct Store Condu ct Store
Visi tsVisi ts
1c. Condu ct De ta i le d Vi de o 1c. Condu ct De ta i le d Vi de o
Ana lysi s Ana lysi s
1d. De ve l op 1d. De ve l op
Pil ot Pil ot
Re comm e nRe comm e n
dationsdations
3a . Pil ot Quick 3a . Pil ot Quick
Hit sHit s
3b. Pi lot Stra te gic Ini ti a ti ve s3b. Pi lot Stra te gic Ini ti a ti ve s
3c. Im pleme nt 3c. Im pleme nt
Ne w Ne w
Ope ra ting Ope ra ting
Mode lMode l
Store ObservationsStore Observations
4. Pe rform Cha nge Ma na ge ment Acti vitie s4. Pe rform Cha nge Ma na ge ment Acti vitie s
2c. Pe rform Da ta 2c. Pe rform Da ta
Di scove ry & Di scove ry &
Ge ne ra te Ge ne ra te
Re port sRe port s
2b. Pe rform Da ta 2b. Pe rform Da ta
Ma pping Ma pping
2a . ID Front End 2a . ID Front End
Producti vi ty Producti vi ty
Me tri cs & Me tri cs &
Re port sRe port s
2d. Pi lot Ini tia l 2d. Pi lot Ini tia l
Re ports a nd Re ports a nd
Da ta Mode lsDa ta Mode ls
Productivity MetricsProductivity Metrics
The Productivity Metrics work effort provides retailers with the
ability to quickly and accurately measure the effectiveness of
their front end operations
IBM uses a Productivity Management tool to help retailers collect data and
analyze productivity by group or “entity”, enabling them to proactively manage
their operations
The Productivity Management tool is a cross-industry application that
combines powerful entity profiling, graphical drill-down reporting wizards,
exception reporting and data mining capabilities
Our approach streamlines the ability for retailers to begin measuring,
monitoring and reacting to their operations by using IBM’s pre-defined retail
metrics, reports, implementation templates and our familiarity with retail data
models
2c. Perform Data 2c. Perform Data
Discovery & Discovery &
Generate Generate
ReportsReports
2b. Perform Data 2b. Perform Data
Mapping Mapping
2a. ID Front End 2a. ID Front End
Productivity Productivity
Metrics & Metrics &
ReportsReports
2d. Pilot Initial 2d. Pilot Initial
Reports and Reports and
Data ModelsData Models
Productivity MetricsProductivity Metrics
IBM approach

14. 14 ©IBM Corporation
The Productivity Metrics work effort provides retailers with the
ability to quickly and accurately measure effectiveness of their
front end operations
Pha se 1 Me trics
De finition/Note s (to include 'w hy the
me tric is use d)
Is Da ta
Ava il a ble ?
Da ta Qua l ity?
Da ta Source
(e -journa l)
Units of Me a sure
($ / % / #)
Me a sure me nt
Ca lcula tion
Group: spe e d / a ccura cy / Contribution
(non fa ctore d w e ighti ng fa ctor)
Da ily Sa le s Tot al sales for t he day ; must be able to tot al Dollars Sales across Cont ribution: how much t hey personally
We e kly Sa le s Tot al sales for t he week; must be able to t ot al Dollars (ac ros s all Cont ribution: how much t hey personally
Monthly $ Sa le s Tot al sales for t he meas urement period Dollars (ac ros s all Cont ribution: how much t hey personally
# Cust Tot al # of cus tomers for the day; mus t be Units Cont ribution: how much t hey personally
# I te ms Tot al # of items for the day: must be able t o Units Cont ribution: how much t hey personally
Login Time (hr) Tot al time Cas hier is logged in; must be able Hours (two Cont ribution: how much t hey personally
Tra nsa ction Tim e (hr) Tot al time s canning and tendering items; Hours (two Speed
% Sca n Number items s canned/total it ems s old % Acc urac y
% Tra nsa ction Ti me Trans ac tion Ti me/ Login Time % Acc urac y
% Cl e a ra nce As a % of Daily Sales % Acc urac y
% UPC Book Usa ge As a % of Daily Sales % Acc urac y
% Gun Use As a % of It ems % Acc urac y (primary ) and Speed (sec ondary )
We start with a series of pre-defined productivity
metrics such as, “average transaction time”
FeatureValue Score
Feature 1 13 850
Feature 2 1250
Feature 3 1.5
FeatureValue Score
Feature 1 5 0
Feature 2 2375
Feature 3 1.1
Peer Group of Entities
Entities
Entity A Feature Values
Entity B Feature Values
A
B




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20
16
12
8
4
0
2 6 12 16
4 8 14
18
0
1000
800
600
400
200
0
B A
Feature 1 Entity Values
Scoring Curve
Then, using the pre-defined metrics plus sales
transaction data, we are able to profile performance.
Reports are automatically generated helping
store management easily track front end performance
and take necessary actions.
IBM approach

15. 15 ©IBM Corporation
1b. Asse ss 1b. Asse ss
Opport uni tie s & Opport uni tie s &
Be st Pra cticesBe st Pra ctices
0. Pre pare & 0. Pre pare &
PrioritizePrioritize
1a . Pre pa re for & 1a . Pre pa re for &
Condu ct Store Condu ct Store
Visi tsVisi ts
1c. Condu ct De ta i le d Vi de o 1c. Condu ct De ta i le d Vi de o
Ana lysi s Ana lysi s
1d. De ve l op 1d. De ve l op
Pil ot Pil ot
Re comm e nRe comm e n
dationsdations
3a . Pil ot Quick 3a . Pil ot Quick
Hit sHit s
3b. Pi lot Stra te gic Ini ti a ti ve s3b. Pi lot Stra te gic Ini ti a ti ve s
3c. Im pleme nt 3c. Im pleme nt
Ne w Ne w
Ope ra ting Ope ra ting
Mode lMode l
Store ObservationsStore Observations
4. Pe rform Cha nge Ma na ge ment Acti vitie s4. Pe rform Cha nge Ma na ge ment Acti vitie s
2c. Pe rform Da ta 2c. Pe rform Da ta
Di scove ry & Di scove ry &
Ge ne ra te Ge ne ra te
Re port sRe port s
2b. Pe rform Da ta 2b. Pe rform Da ta
Ma pping Ma pping
2a . ID Front End 2a . ID Front End
Producti vi ty Producti vi ty
Me tri cs & Me tri cs &
Re port sRe port s
2d. Pi lot Ini tia l 2d. Pi lot Ini tia l
Re ports a nd Re ports a nd
Da ta Mode lsDa ta Mode ls
Productivity MetricsProductivity Metrics
The two work efforts merge as results from the Quick Hits and
Strategic Initiatives pilots are measured; the new business model
then moves forward into implementation
3a. Pilot Quick 3a. Pilot Quick
HitsHits
3b. Pilot Strategic Initiatives3b. Pilot Strategic Initiatives
3c. Implement 3c. Implement
New New
Operating Operating
ModelModel
Front End Front End
OptimizationOptimization
Piloting the proposed changes enables retailers to reduce risk, measure
impact prior to full scale implementation, validate and formalize the changes
and better prepares the client for implementation
Measuring the results of both pilots is key for determining success metrics,
validating expected benefits and serves as input to business justification for
final approval and implementation
Change management activities are critical to creating awareness and buy-in
throughout the project, transitioning the project from recommendations to
pilot activities and helping the organization through implementation
4. Perform Change Management Activities4. Perform Change Management Activities
IBM approach

16. 16 ©IBM Corporation
The first step is to organize the project, assemble and energize the
project team and identify front end focus areas
APPROACH and SAMPLE RESULTS
IBM approach
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ApproachApproach
OutputsOutputs
•To organize and plan the project, including detailed
project plan, resource requirements and constraints
•To validate areas of focus to guide subsequent project
steps
•To understand and validate client’s business
environment
InputsInputs ActivitiesActivities
Organize project: identify client
and IBM resources, determine
time requirements and identify
constraints
Prepare project work plan
Conduct select interviews with
operations executives, directors,
etc. (validate focus areas,
understand customer
expectations, service guidelines
and productivity measurements)
Identify possible stores for
observations and pilot
Conduct kickoff meeting
Project plan template
Interview guides templates
Output from Scoping Work
Session
Detailed Project Plan *
Identified resources and
time commitments
Client’s key focus areas
*Project Deliverable
0. Prepare & 0. Prepare &
PrioritizePrioritize
1b. A sse ss 1b. A sse ss
Opport un itie s & Opport un itie s &
Be st Pra ctice sBe st Pra ctice s
0. Pre pa re & 0. Pre pa re &
Prioritiz ePrioritiz e
1a . Pre pa re for & 1a . Pre pa re for &
Co ndu ct Store Co ndu ct Store
Vi sit sVi sit s
1c. Con du ct De taile d Vide o 1c. Con du ct De taile d Vide o
Ana lysi s Ana lysi s
1d . De ve lop 1d . De ve lop
Pilot Pilot
Re comme nRe comme n
da ti onsda ti ons
3a . Pilot Quick 3a . Pilot Quick
Hit sHit s
3b. Pilot S tra te gic Ini tiative s3b. Pilot S tra te gic Ini tiative s
3c. Imp leme nt 3c. Imp leme nt
Ne w Ne w
Opera ting Opera ting
M ode lM ode l
Store ObservationsStore Observations
4. P e rform Cha nge Ma na ge me nt Activitie s4. P e rform Cha nge Ma na ge me nt Activitie s
2c. Pe rfor m Da ta 2c. Pe rfor m Da ta
Di scove ry & Di scove ry &
Ge ne ra te Ge ne ra te
Re portsRe ports
2b. Pe rform Da ta 2b. Pe rform Da ta
Ma p ping Ma p ping
2a . ID Front End 2a . ID Front End
Pro ductivit y Pro ductivit y
Me trics & Me trics &
Re port sRe port s
2d. P ilot In itia l 2d. P ilot In itia l
Re ports a n d Re ports a n d
Da ta Mod e lsDa ta Mod e ls
Producti vity M etricsProducti vity M etrics

17. 17 ©IBM Corporation
Conducting formal and informal store visits is key to gathering
data for validating pain points and identifying additional
opportunities for improvement
To prepare the project team for store visits
To gather formal (using video) and informal (using
observations) site visit data which will serve as inputs
to findings and opportunities
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ApproachApproach
APPROACH and SAMPLE RESULTS
IBM approach
OutputsOutputsInputsInputs ActivitiesActivities
Identify and schedule
observation sites, based on
geographic, seasonal and
demographic variances
Validate front end
processes and prepare
observation tools
(templates, video, etc.)
Conduct and document
formal (video) and informal
(observation) store visits
Generic store observation
templates
Client’s key focus areas
Front end process
documentation (if available)
Identified stores
Site visit schedule and
agenda
Customized store
observation templates
Store visit documentation
(observation data, raw
video data, POS transaction
logs)
1a. Prepare for & 1a. Prepare for &
Conduct Store Conduct Store
VisitsVisits
*Project DeliverableP
Deliverable / work product from prior step
1b. A sse ss 1b. A sse ss
Opport un itie s & Opport un itie s &
Be st Pra ctice sBe st Pra ctice s
0. Pre pa re & 0. Pre pa re &
Prioritiz ePrioritiz e
1a . Pre pa re for & 1a . Pre pa re for &
Co ndu ct Store Co ndu ct Store
Vi sit sVi sit s
1c. Con du ct De taile d Vide o 1c. Con du ct De taile d Vide o
Ana lysi s Ana lysi s
1d . De ve lop 1d . De ve lop
Pilot Pilot
Re comme nRe comme n
da ti onsda ti ons
3a . Pilot Quick 3a . Pilot Quick
Hit sHit s
3b. Pilot S tra te gic Ini tiative s3b. Pilot S tra te gic Ini tiative s
3c. Imp leme nt 3c. Imp leme nt
Ne w Ne w
Opera ting Opera ting
M ode lM ode l
Store ObservationsStore Observations
4. P e rform Cha nge Ma na ge me nt Activitie s4. P e rform Cha nge Ma na ge me nt Activitie s
2c. Pe rfor m Da ta 2c. Pe rfor m Da ta
Di scove ry & Di scove ry &
Ge ne ra te Ge ne ra te
Re portsRe ports
2b. Pe rform Da ta 2b. Pe rform Da ta
Ma p ping Ma p ping
2a . ID Front End 2a . ID Front End
Pro ductivit y Pro ductivit y
Me trics & Me trics &
Re port sRe port s
2d. P ilot In itia l 2d. P ilot In itia l
Re ports a n d Re ports a n d
Da ta Mod e lsDa ta Mod e ls
Producti vity M etricsProducti vity M etrics

18. 18 ©IBM Corporation
Sample Work ProductsSample Work Products: The site observation agenda ensures
consistency for the observations and IBM’s standard templates
are customized to include client-specific attributes
1
© 20 02 IB M Cor por ation
IBM Global ServicesIBM Global Services
The Queue Timing Template quantifies a customer’s total
transaction time as they move through the checkout process,
noting causes for irregularities and delays
IB M app roach
• Inte nt is to focus o n the overall process dura tion , especially as affecte d by post-scan activities.
• Sel ect a custo mer at r andom to fo llow thru th e checkout pro cess.
• Take no te of qu eue length, bo th at the entry and exit
• Usi ng stopwatch and persona l ob ser vation make no tations to the char t as app ropriate.  
• Comme nts are imp orta nt for g athe ring oth er miscellaneo us observations, such as reason for
a delay in the process.
• Note: The number of p eople in th e qu eue sh ould equal all those in line waiting fo r service p lus the
person eng aged with the cashier (in this case, two in line plus one). Howeve r, th is figure sh ould
not incl ude the customer you are tracking.
# Lane/Reg
# People in
Queue
(Enter Q) # Items
TIME
Enter
Queue
TIME
Start
Service
TIME
End
Service
# People in
Queue
(End Svc)
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Ex. 5 3 11 0:00 4:02 5:37 2
2
© 20 02 IB M Cor por ation
IBM Global ServicesIBM Global Services
The Transaction Observation Template captures qualitative
evidence of individual customers progressing through the
checkout process
IB M app roach
• Inte nt is to focus o n the ch aracter istics of the ch eckout process, pa rticular ly noting th e e ffect of
customer-d rive n choices.
• Sel ect a custo mer at r andom to fo llow thru th e checkout pro cess.
• Based on customer se lection s, n ote effe cts on prod uct scannin g method, handlin g b y th e cashier,
and tender method.
• In in stances of delay, it is imp orta nt to capture th e situational aspects (process, p roduct,
personn el, etc.) tha t co ntri bute to the occurrence.
Obs #
# in
que ue
Total
Ite ms# Scan# Gun
Qty Ke y
Use dSmallLarge
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Bag
He ad
Cashier
UPC
Book
Price
Che ck
T ill
Strip Comments
Ex. 2 7 5 1 1 4 3 X 2 l
Product M ix Type of Te nde r Use of following and #:Sizes
Friday
Start StopPerson 1 Person 2 Template
4pm 430pmArriv e at store, introduce to manager(s)
Identify Front End checkouts to observe.
Perform manager interview, if time (15 min). HD_Discussion Points - Store Manager. doc
Measure checkstand configurations, if possible HD_Tx_Observ_Template_v 3.xls
430pm 545pmQueue Timing, Front Line Trans Observation, Returns HD_Q_Time_Template.xls
545pm 600pmBreak Break
600pm 700pmLabor Utilization, Garden Labor Utilization, Front Line HD_Labor_Template.xls
700pm 800pmTrans Observation, Front Line (ss )Queue Timing, Garden HD_Tx_Observ_Template_v 3.xls
Saturday
Start StopPerson 1 Person 2 Template
8am 830amArriv e at store, introduce to manager(s)
Identify Front End checkouts to observe.
Perform manager interview, if time (15 min). HD_Discussion Points - Store Manager. doc
Perform cashier interview, if time (15 min). HD_Discussion Points - Cashier. doc
Measure checkstand configurations, if possible HD_Tx_Observ_Template_v 3.xls
830am 10amQueue Timing, Front Line Queue Timing, Garden HD_Q_Time_Template.xls
10am 1015amBreak Break
(perform interviews if time / they're av ailable)
1015am1130amTrans Observation, Front Line (ss )Trans Observation, Returns HD_Tx_Observ_Template_v 3.xls
1130am1230pmLunch Lunch
1230pm 2pm Queue Timing, Returns Queue Timing, Front Line (ss) HD_Q_Time_Template.xls
Sample Site Visit Agenda
Sample Observation Templates
IBM approach

19. 19 ©IBM Corporation
Sample Work ProductsSample Work Products: Store visit observations are compiled
into spreadsheets for analysis in subsequent project activities
Sample Observation Data
Store Dept. Time Lane/Reg
# People in
Queue
(Enter Q) # Items
TIM E
Enter
Queue
TIM E
Start
Service
TIM E
End
Service
# People in
Queue
(End Svc)
Transaction
$ Amount
PR Cont 6:45-8:15am 2 0 3 0:00:00 0:00:00 0:01:10 1 $21.00
PR Cont 6:45-8:15am 2 0 34 0:00:00 0:00:10 0:03:30 1 NA
PR Cont 6:45-8:15am 2 0 2 0:00:00 0:00:00 0:00:44 1 $5.12
PR Cont 6:45-8:15am 1 0 27 0:00:00 0:00:00 0:03:11 1 $203.20
PR Cont 6:45-8:15am 1 1 10 0:00:00 0:00:50 0:01:37 0 $38.22
PR Cont 6:45-8:15am 2 0 6 0:00:00 0:00:05 0:02:30 0 $142.20
PR Cont 6:45-8:15am 2 1 4 0:00:00 0:00:36 0:01:21 2 $56.02
PR Cont 6:45-8:15am 2 1 1 0:00:00 0:00:24 0:00:50 0 $6.37
PR Cont 6:45-8:15am 2 1 4 0:00:00 0:01:01 0:02:59 0 $22.37
PR Cont 6:45-8:15am 2 1 6 0:00:00 0:00:25 0:01:14 1 $15.01
PR Cont 6:45-8:15am 2 1 51 0:00:00 0:01:03 0:03:40 0 $155.20
PR Cont 6:45-8:15am 1 0 1 0:00:00 0:00:15 0:00:37 1 $3.00
PR Cont 6:45-8:15am 1 0 12 0:00:00 0:00:00 0:00:48 3 $41.99
PR Cont 6:45-8:15am 1 2 34 0:00:00 0:00:52 0:02:19 3 $135.63
PR Cont 6:45-8:15am 1 3 3 0:00:00 0:01:35 0:02:38 1 $27.10
PR Cont 6:45-8:15am 2 0 1 0:00:00 0:00:00 0:00:54 0 $10.49
PR Cont 6:45-8:15am 1 0 7 0:00:00 0:00:00 0:01:20 1 $25.91
1961Contractor7:00-8:00a 4 0 10 10:01:00 10:16:00 11:34:00 0 $86.10
1961Contractor7:00-8:00a 4 0 11 11:48:00 11:48:00 13:11:00 0 $77.95
1961Contractor7:00-8:00a 4 0 1 17:48:00 17:49:00 23:06:00 1 $19.49
1961Contractor7:00-8:00a 4 1 16 22:12:00 23:10:00 25:00:00 0 $232.30
1961Contractor7:00-8:00a 4 0 1 26:51:00 26:51:00 27:26:00 0 $15.15
Store
# City Time
Day
PartDay Loc.
# in
queue
Total
Items# Scan# Gun
#
Keyed
Sml
Item
Lrg
Item C
a
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JolietCHI 7:00 - 8:00 pmEV FriFront 7 8 0 8 0 4 4 x
JolietCHI 7:00 - 8:00 pmEV FriFront 5 4 4 0 0 5 0 x
JolietCHI 7:00 - 8:00 pmEV FriFront 5 6 0 6 0 5 0 x
JolietCHI 7:00 - 8:00 pmEV FriFront 3 1 1 0 0 1 0 x
JolietCHI 7:00 - 8:00 pmEV FriFront 3 7 2 5 0 0 7 x
JolietCHI 7:00 - 8:00 pmEV FriFront 3 3 3 0 0 3 0 x
JolietCHI 7:00 - 8:00 pmEV FriFront 4 3 3 0 0 1 2 x
JolietCHI 7:00 - 8:00 pmEV FriFront 3 3 3 0 0 3 0 x
JolietCHI 7:00 - 8:00 pmEV FriFront 3 5 5 0 5 0 5
JolietCHI 7:00 - 8:00 pmEV FriFront 4 4 0 4 0 0 4 x
JolietCHI 7:00 - 8:00 pmEV FriFront 6 6 6 0 0 6 0 x
JolietCHI 7:00 - 8:00 pmEV FriFront 5 2 2 0 0 2 0 x
JolietCHI 7:00 - 8:00 pmEV FriFront 4 4 4 0 0 4 0 x
JolietCHI 7:00 - 8:00 pmEV FriFront 2 6 6 0 0 1 5 x
JolietCHI 7:00 - 8:00 pmEV FriFront 5 4 4 0 0 4 0 x
JolietCHI 7:00 - 8:00 pmEV FriFront 5 3 0 3 0 0 3 x
JolietCHI 7:00 - 8:00 pmEV FriFront 6 2 2 0 0 2 0 x
JolietCHI 7:00 - 8:00 pmEV FriFront 5 2 0 2 0 2 0 x
JolietCHI 7:00 - 8:00 pmEV FriFront 3 3 0 3 0 0 3 x
JolietCHI 7:00 - 8:00 pmEV FriFront 2 2 2 0 0 2 0 x
Observation Profile Product Mix Type of Tender
IBM approach

20. 20 ©IBM Corporation
The project team assesses areas of opportunity and retail best
practices enabling us to challenge current thinking and evaluate
new alternatives
To outline key areas of opportunity, relative to front end
operations
To identify best practices appropriate to the client’s
business environment
APPROACH and SAMPLE RESULTS
IBM approach
1b. Assess 1b. Assess
Opportunities & Opportunities &
Best PracticesBest Practices
O
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ApproachApproach
OutputsOutputsInputsInputs ActivitiesActivities
Document findings from
observation data
Assess store visit findings
to identify key areas of
opportunity
Identify best practices
actually used in the client’s
environment and those
relative to their
improvement needs
Identify initial quick hit
recommendations
Store visit documentation
(observation data)
P
IBM Retail Best Practice
intellectual capital (ICAP)
Store Visit Findings and
Key Areas of Opportunity *
Best Practices Relative to
Key Areas of Opportunity *
Initial Quick Hits
*Project DeliverableP
Deliverable / work product from prior step
1b. A sse ss 1b. A sse ss
Opport un itie s & Opport un itie s &
Be st Pra ctice sBe st Pra ctice s
0. Pre pa re & 0. Pre pa re &
Prioritiz ePrioritiz e
1a . Pre pa re for & 1a . Pre pa re for &
Co ndu ct Store Co ndu ct Store
Vi sit sVi sit s
1c. Con du ct De taile d Vide o 1c. Con du ct De taile d Vide o
Ana lysi s Ana lysi s
1d . De ve lop 1d . De ve lop
Pilot Pilot
Re comme nRe comme n
da ti onsda ti ons
3a . Pilot Quick 3a . Pilot Quick
Hit sHit s
3b. Pilot S tra te gic Ini tiative s3b. Pilot S tra te gic Ini tiative s
3c. Imp leme nt 3c. Imp leme nt
Ne w Ne w
Opera ting Opera ting
M ode lM ode l
Store ObservationsStore Observations
4. P e rform Cha nge Ma na ge me nt Activitie s4. P e rform Cha nge Ma na ge me nt Activitie s
2c. Pe rfor m Da ta 2c. Pe rfor m Da ta
Di scove ry & Di scove ry &
Ge ne ra te Ge ne ra te
Re portsRe ports
2b. Pe rform Da ta 2b. Pe rform Da ta
Ma p ping Ma p ping
2a . ID Front End 2a . ID Front End
Pro ductivit y Pro ductivit y
Me trics & Me trics &
Re port sRe port s
2d. P ilot In itia l 2d. P ilot In itia l
Re ports a n d Re ports a n d
Da ta Mod e lsDa ta Mod e ls
Producti vity M etricsProducti vity M etrics

21. 21 ©IBM Corporation
Sample DeliverablesSample Deliverables: Store visit findings and key areas of
opportunity, combined with retail best practices help the team
begin to form recommendations and identify Quick Hits
Sample Store Visit Findings
14© 20 01 IB M Cor por ation
IBM Global ServicesIBM Global Services
The layout of Returns areas in most stores visited was not
accommodating to customer traffic and return volume
Over 40% of returns observed
involved multiple items
–Returns are a configura tion an d
orga nizatio n di d no t fa cilitate
customer tr affic – particularly
customers with ca rts a nd flatbeds
–Cashiers d id n ot consistently
orga nize re turn s and RTV
merchandise, l eaving the area
cluttere d an d h avin g li ttle customer
eye appeal
About 75% of Return were small
items – typically customers would
return 1 or 2 small items at a time
About 35% of Returns were large
items – typically customers would
return 2 or 3 large items at a time
–Larg e re turn items created additional
space i ssues i n al ready cramped
Returns are as
–Small items were retu rned wi th large
items
RTV shelv es
R
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Store Entrance
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Sp. Services
Desk
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Product Display Product Display
Fence
Wall
Wheelchairs
Department Returns Carts
Sign:
Authorize d
Personnel
Only
RTV Cart
Returns Customer
Tr affic Patterns
Philadelphia Returns ConfigurationPhiladelphia Returns Configuration
RTV shelv es
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Store Entrance
P
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Sp. Services
Desk
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Product Display Product Display
Fence
WallWall
Wheelchairs
Department Returns Carts
Sign:
Authorize d
Personnel
Only
RTV Cart
Returns Customer
Tr affic Patterns
Philadelphia Returns ConfigurationPhiladelphia Returns Configuration
Service Delays – Ret urnsService Delays – Ret urns
•Due to lack of counter space, r eturn and exchange i tems are handled many ti mes before getting pl aced
in the right cart, which leads to further delays and led to messy Returns ar eas
Sample Best Practices
Total Store
Structured store organization plan with career path orientation for
management personnel, including Assistant Manager positions with
accountability for Customer Service, Nonperishable, and Perishable
departments
Quarterly inventory schedule for all Perishable departments
Profitability reporting structure based on department contribution rather
than straight Gross Margin
Integrated labor management system including labor scheduling package
interfaced with Time & Attendance and HR systems
Scale management system used to ensure accurate retail pricing
Dedication of customer service associates separate from "task masters"
Automated cart retrieval system
Performance management climate established with key measures charted
by all department
Associate friendliness driven by empowerment and well executed rewards
and recognition program
IBM approach

22. 22 ©IBM Corporation
Sample DeliverablesSample Deliverables: Store visit findings and key areas of
opportunity, combined with retail best practices help the team
begin to form recommendations and identify Quick Hits
Sample Quick Hits
QUICK HITS
# Name Short Description Enablers
Expected Capabilities /
Benefits
Approx. Cost
Timeframe to
Implement
Impacted
Personnel
Impacted AreasOwner
1Manage Sales
Signage
a. Remove signs promptly after a sale ends.
b. Sale signage should prominently display the ending
date for the sale.
c. Use a single color for all sale signage for a given
time period. The sale signs for the next period should
be a different color. Rotate through several (i.e., 6-8)
colors over time. The “color” of the weekly sale could
be touted in advertising materials. E.g., weekly sales
flyers could state the sales “color” signage to look for.
Communication of sale
start / end dates to store
staff
Discepancies will be
dealt with on the sales
floor rather than at
checkout.
Higher customer
satisfaction due to less
confusion and neater
store appearance
Minimal 1 monthCashiers, Floor
Associates
Entire StoreS. Walton
2Sales Floor Staff
Coverage
Maintain adequate sales floor staff to be available and
easily found or called by shoppers if they
want to ask a question before checkout.
Defined roles &
responsibilities
Staff deployment
[Labor scheduling
application]
Higher customer
satisfaction
Improved throughput due
to minimized delays
caused by customer
questions
Possible
additional labor
2 monthsCashiers, Floor
Associates
Entire StoreM. Field
3Price Check
Review
Review all price checks for some period (e.g., a month)
to determine cause and typical amount under dispute.
For small disputed amounts, take the shopper’s word.
Over time, monitor the results of the dispute
resolutions to insure (a) that the practice is
implemented as desired and (b) that shoppers do not
take advantage of the store’s good faith.
Transaction Log dataImproved customer
satisfaction due to
reduced delays caused
by price checks
Improved throughput
Additional
labor and/or
consultants (if
use external
resources)
1 month Cashiers Checkout B. Marcus
IBM approach

23. 23 ©IBM Corporation
Assessing results from video taping activities enables the
project team to identify quantitative measurements, which serve
as additional inputs to recommendations and business
justification
To compile and summarize data collected during
formal site visits
To provide quantitative (objective) measurements of
front end productivity, which will be used as input to
recommendations
APPROACH and SAMPLE RESULTS
IBM approach
1c. Conduct 1c. Conduct
Detailed Video Detailed Video
AnalysisAnalysis
ApproachApproach
OutputsOutputsInputsInputs ActivitiesActivities
Summarize transaction
quantitative data
Benchmark existing
transaction times, primarily:
–Queue time
–Item Entry time
–Bagging time
–Tender time
–Delay time
–Help and misc. time
Compare client’s times
against other retailers
Document findings
Store visit documentation
(raw video data, POS
transaction logs)
P
Summary of Videotaped
Data and Analysis *
Qualitative Front End
Assessment *
*Project DeliverableP
Deliverable / work product from prior step
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1b. A sse ss 1b. A sse ss
Opport un itie s & Opport un itie s &
Be st Pra ctice sBe st Pra ctice s
0. Pre pa re & 0. Pre pa re &
Prioritiz ePrioritiz e
1a . Pre pa re for & 1a . Pre pa re for &
Co ndu ct Store Co ndu ct Store
Vi sit sVi sit s
1c. Con du ct De taile d Vide o 1c. Con du ct De taile d Vide o
Ana lysi s Ana lysi s
1d . De ve lop 1d . De ve lop
Pilot Pilot
Re comme nRe comme n
da ti onsda ti ons
3a . Pilot Quick 3a . Pilot Quick
Hit sHit s
3b. Pilot S tra te gic Ini tiative s3b. Pilot S tra te gic Ini tiative s
3c. Imp leme nt 3c. Imp leme nt
Ne w Ne w
Opera ting Opera ting
M ode lM ode l
Store ObservationsStore Observations
4. P e rform Cha nge Ma na ge me nt Activitie s4. P e rform Cha nge Ma na ge me nt Activitie s
2c. Pe rfor m Da ta 2c. Pe rfor m Da ta
Di scove ry & Di scove ry &
Ge ne ra te Ge ne ra te
Re portsRe ports
2b. Pe rform Da ta 2b. Pe rform Da ta
Ma p ping Ma p ping
2a . ID Front End 2a . ID Front End
Pro ductivit y Pro ductivit y
Me trics & Me trics &
Re port sRe port s
2d. P ilot In itia l 2d. P ilot In itia l
Re ports a n d Re ports a n d
Da ta Mod e lsDa ta Mod e ls
Producti vity M etricsProducti vity M etrics

24. 24 ©IBM Corporation
Sample Qualitative Assessment
Number of Items per Transaction
0
10
20
30
40
50
60
70
06121824303642485460
0%
20%
40%
60%
80%
100%
120%
Frequency Cumulative %
Sample Videotaped Analysis
Sample Deliverables:Sample Deliverables: Detailed analysis of video observations
helps validate and enhance findings from informal site visits,
prioritize opportunities, and can serve as business case inputs
Sample Videotaped Transaction Data Summarized
Transaction Analysis -- Observations from 08/24/2001 - 08/26/2001
Rec
Num
Tx
Num Date StoreCashier
Tx
Type
Tx Time
Total
# Items
Sold
# Scan
Items
Sold
#
Keyed
Items
Sold
Total
Item
Time
Total
Bag
Time
Total
Delay
Time
Total
Help
Time
Total
Misc
Time
Total
Help +
Misc
Time
Count (Actual Entries only) 504 504 500 35 504 486 340 6 504 504
Count (All Tx) 504 504 504 504 504 504 504 504 504 504
Frequency of Occurrence: % Tx (by Count)100.0% 100.0%96.4%67.5% 1.2%100.0%100.0%
Average Dur or Num (Actual Entries only)89.0 4.7 4.5 0.1 19.7 15.5 25.5 86.3 1.2 2.2
StdDev Dur or Num (Actual Entries only) 61.5 5.3 5.2 0.8 25.6 17.0 32.2171.5 2.5 19.7
Frequency Weighted Avg for all Tx: Average (over All Tx)89.0 4.7 4.5 0.1 19.7 15.0 17.2 1.0 1.2 2.2
Frequency Weighted S.D. for all Tx: StdDev (over All Tx)61.5 5.3 5.2 0.8 25.6 16.9 29.0 19.5 2.5 19.7
% of Avg Total Tx Duration100.0% 22.1%16.8%19.4% 1.2% 1.3% 2.5%
Sum Dur or Num 44871.72349.02283.0 66.09931.37553.18683.1518.0586.61104.7
Max Dur or Num 549.2 50.0 50.0 16.0199.1152.6303.4434.9 31.9437.8
Min Dur or Num 17.7 1.0 0.0 0.0 0.0 0.6 0.9 3.9 0.0 0.0
Median Dur or Num 71.9 3.0 3.0 0.0 10.8 9.6 17.5 12.8 0.7 0.7
IBM approach

25. 25 ©IBM Corporation
Prioritized recommendations incorporate both qualitative and
quantitative findings and opportunities, as well as leading
practices to outline new and better ways of doing business
To outline specific improvement recommendations relative
to process, equipment, roles & responsibilities, layout, etc.
To prioritize recommendations for Pilots
To outline an initial pilot plan to take the recommendations
forward for approval
APPROACH and SAMPLE RESULTS
IBM approach
1d. Develop Pilot1d. Develop Pilot
RecommendationsRecommendations
ApproachApproach
OutputsOutputsInputsInputs ActivitiesActivities
Develop recommendations,
based on observational
data
Revise recommendations
as necessary, based on
results of video analysis
Prioritize recommendations
into Quick Hits and
Strategic Initiatives
Prepare pilot plan (e.g.,
number of pilot stores, pilot
approach)
Store Visit Findings and
Key Areas of Opportunity
P
Best Practices Relative to
Key Areas of Opportunity
P
Qualitative Front End
Assessment
P
Prioritized Pilot
Recommendations *
Initial Pilot Plan *
*Project DeliverableP
Deliverable / work product from prior step
O
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1b. A sse ss 1b. A sse ss
Opport un itie s & Opport un itie s &
Be st Pra ctice sBe st Pra ctice s
0. Pre pa re & 0. Pre pa re &
Prioritiz ePrioritiz e
1a . Pre pa re for & 1a . Pre pa re for &
Co ndu ct Store Co ndu ct Store
Vi sit sVi sit s
1c. Con du ct De taile d Vide o 1c. Con du ct De taile d Vide o
Ana lysi s Ana lysi s
1d . De ve lop 1d . De ve lop
Pilot Pilot
Re comme nRe comme n
da ti onsda ti ons
3a . Pilot Quick 3a . Pilot Quick
Hit sHit s
3b. Pilot S tra te gic Ini tiative s3b. Pilot S tra te gic Ini tiative s
3c. Imp leme nt 3c. Imp leme nt
Ne w Ne w
Opera ting Opera ting
M ode lM ode l
Store ObservationsStore Observations
4. P e rform Cha nge Ma na ge me nt Activitie s4. P e rform Cha nge Ma na ge me nt Activitie s
2c. Pe rfor m Da ta 2c. Pe rfor m Da ta
Di scove ry & Di scove ry &
Ge ne ra te Ge ne ra te
Re portsRe ports
2b. Pe rform Da ta 2b. Pe rform Da ta
Ma p ping Ma p ping
2a . ID Front End 2a . ID Front End
Pro ductivit y Pro ductivit y
Me trics & Me trics &
Re port sRe port s
2d. P ilot In itia l 2d. P ilot In itia l
Re ports a n d Re ports a n d
Da ta Mod e lsDa ta Mod e ls
Producti vity M etricsProducti vity M etrics

26. 26 ©IBM Corporation
Customer Service
Baseline Findings
Sample
Recommendations
Inconsistent greetings create
bottlenecks at the menu board and
front counter
- Construct a service manual which defines standard customer greeting
procedures
- Continually reinforce crew training
- Post signs by registers with standardized greetings and suggestive selling
Employee multi-tasking, training,
staffing, & deployment contributed
to delays at menu board, pay
window, PUW, front counter register
- Construct a service manual which defines daypart staffing and deployment
guidelines, staffing roles and responsibilities, and service standards
- Continually reinforce crew training
- Create "teams" within the restaurants at both the front counter and
drive-thru to create enthusiasm
Inconsistent execution of change
making procedures create
bottlenecks at the pay window &
front counter register
- Construct a service manual which defines standard change making
procedures
- Continually reinforce crew training
- Design and post a card/poster with "change recipes" to facilitate change
making process
POS functionality contributes to
bottlenecks at the menu board and
register
- Reduce the number of keys required & improve keyboard maneuvering
Menu complexity causes
bottlenecks at the menu board and
registers
- Make menu headings a different color form the menu items and
standardize
throughout the system
Product delays were due to product
build complexity and assembly
issues
- Continually reinforce crew training
- Eliminate delay in items appearing on VDU (kitchen monitors)
- Implement training to improve communications between sandwich maker
and grill person
- Pre-package condiments unique to each product group
Sample DeliverablesSample Deliverables: Pilot recommendations and the related
project plans are prioritized as Strategic Initiatives and Quick
Hits
Sample Pilot Project Plan
Sample Pilot Recommendations
Initiate pilot
Identify pilot stores and time frames
Comm. pilot objectives to impacted stores
Identify technology / infrastructure rqmts.
Document process changes
Document role & resp. changes
Define feedback plan
Define cut-over plan
Comm. pilot details to impacted stores
Train pilot store(s) staff
Perform equipment / layout changes
Conduct pilot
Solicit and document feedback
Revise recommendations
0 2 4 6 8 10 12 14 16 18 20Weeks
Strategic Initiative
IBM approach

27. 27 ©IBM Corporation
Working with internal business and technical experts is key to
establishing initial cashier productivity metrics and reports for
measurement and evaluation
APPROACH and SAMPLE RESULTS
IBM approach
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ApproachApproach
OutputsOutputs
•To review required functionality
•To validate the pre-defined of productivity metrics and
associated weight factors for data modeling
•To establish metrics baselines for initial scoring and
subsequent actions
•To review and validate productivity reports
InputsInputs ActivitiesActivities
Interview business and
technical subject matter
experts to confirm required
functionality
Facilitate metrics and
reports workshop to review
and validate:
–pre-defined metrics
–best practice baseline
metrics
–best practice reports
–recommended pilot
approach
Interview Guides
Best Practice Productivity
Reports and metrics
Best Practice metrics
baselines
Documented productivity
metrics and reports *
Key findings from
interviews*
Confirmation of pilot stores
and high level training
requirements
*Project Deliverable
2a. ID Front End 2a. ID Front End
Productivity Productivity
MetricsMetrics
1b. A sse ss 1b. A sse ss
Opport un itie s & Opport un itie s &
Be st Pra ctice sBe st Pra ctice s
0. Pre pa re & 0. Pre pa re &
Prioritiz ePrioritiz e
1a . Pre pa re for & 1a . Pre pa re for &
Co ndu ct Store Co ndu ct Store
Vi sit sVi sit s
1c. Con du ct De taile d Vide o 1c. Con du ct De taile d Vide o
Ana lysi s Ana lysi s
1d . De ve lop 1d . De ve lop
Pilot Pilot
Re comme nRe comme n
da ti onsda ti ons
3a . Pilot Quick 3a . Pilot Quick
Hit sHit s
3b. Pilot S tra te gic Ini tiative s3b. Pilot S tra te gic Ini tiative s
3c. Imp leme nt 3c. Imp leme nt
Ne w Ne w
Opera ting Opera ting
M ode lM ode l
Store ObservationsStore Observations
4. P e rform Cha nge Ma na ge me nt Activitie s4. P e rform Cha nge Ma na ge me nt Activitie s
2c. Pe rfor m Da ta 2c. Pe rfor m Da ta
Di scove ry & Di scove ry &
Ge ne ra te Ge ne ra te
Re portsRe ports
2b. Pe rform Da ta 2b. Pe rform Da ta
Ma p ping Ma p ping
2a . ID Front End 2a . ID Front End
Pro ductivit y Pro ductivit y
Me trics & Me trics &
Re port sRe port s
2d. P ilot In itia l 2d. P ilot In itia l
Re ports a n d Re ports a n d
Da ta Mod e lsDa ta Mod e ls
Producti vity M etricsProducti vity M etrics

28. 28 ©IBM Corporation
After identifying a retailer’s productivity metrics, we obtain sales
transaction data and begin the discovery and modeling phase to
develop initial scoring profiles
APPROACH and SAMPLE RESULTS
IBM approach
2b. & 2c. Perform 2b. & 2c. Perform
Data Mapping & Data Mapping &
Data DiscoveryData Discovery
O
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ApproachApproach
OutputsOutputs
•To confirm data requirements to support productivity
metrics
•To receive and test retailer’s data in required format
•To perform data discovery and create productivity
models
•To produce reports for evaluation
InputsInputs ActivitiesActivities
Receive sample data set in
required format
Perform data discovery
Produce initial reports
Review test reports for
accuracy
Productivity Metrics and
associated calculations and
weight factors
Sales transaction data
Documented data
requirements *
Initial Productivity Reports *
Finalized metrics table *
*Project Deliverable
1b. A sse ss 1b. A sse ss
Opport un itie s & Opport un itie s &
Be st Pra ctice sBe st Pra ctice s
0. Pre pa re & 0. Pre pa re &
Prioritiz ePrioritiz e
1a . Pre pa re for & 1a . Pre pa re for &
Co ndu ct Store Co ndu ct Store
Vi sit sVi sit s
1c. Con du ct De taile d Vide o 1c. Con du ct De taile d Vide o
Ana lysi s Ana lysi s
1d . De ve lop 1d . De ve lop
Pilot Pilot
Re comme nRe comme n
da ti onsda ti ons
3a . Pilot Quick 3a . Pilot Quick
Hit sHit s
3b. Pilot S tra te gic Ini tiative s3b. Pilot S tra te gic Ini tiative s
3c. Imp leme nt 3c. Imp leme nt
Ne w Ne w
Opera ting Opera ting
M ode lM ode l
Store ObservationsStore Observations
4. P e rform Cha nge Ma na ge me nt Activitie s4. P e rform Cha nge Ma na ge me nt Activitie s
2c. Pe rfor m Da ta 2c. Pe rfor m Da ta
Di scove ry & Di scove ry &
Ge ne ra te Ge ne ra te
Re portsRe ports
2b. Pe rform Da ta 2b. Pe rform Da ta
Ma p ping Ma p ping
2a . ID Front End 2a . ID Front End
Pro ductivit y Pro ductivit y
Me trics & Me trics &
Re port sRe port s
2d. P ilot In itia l 2d. P ilot In itia l
Re ports a n d Re ports a n d
Da ta Mod e lsDa ta Mod e ls
Producti vity M etricsProducti vity M etrics

29. 29 ©IBM Corporation
Productivity Metrics Sample Reports:Productivity Metrics Sample Reports: Pre-defined retail front end
optimization metrics and reports assist in quick implementation
Report Dashboard displays all of the productivity reportsReport Dashboard displays all of the productivity reports
IBM approach
The report dashboard
helps the store
manager and the head
office quickly select
the appropriate
report(s).

30. 30 ©IBM Corporation
Sample Deliverables:Sample Deliverables: Our use of best practices relative to front
end productivity metrics allow the team to effectively reuse
existing reports without the need to “reinvent the wheel”
Exception reports include “Average Scores by Department” Exception reports include “Average Scores by Department”
•This report displays total
scores for each cashier
by department for a
given time period.
•It is useful for showing
how well business is
being conducted within
each business area.
IBM approach

31. 31 ©IBM Corporation
Sample Deliverables:Sample Deliverables: Our use of best practices relative to front
end productivity metrics allow the team to effectively reuse
existing reports without the need to “reinvent the wheel”
Alert Reports are key to proactive store managementAlert Reports are key to proactive store management
Alert reports help store managers
and the head office to quickly
pinpoint problem areas and take
action to alleviate bottlenecks in
front end operations.
IBM approach

32. 32 ©IBM Corporation
During the initial pilot, we assist retailers in evaluating the model
and reports; revisions are sometimes necessary to achieve
accurate measurements
APPROACH and SAMPLE RESULTS
IBM approach
O
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ApproachApproach
OutputsOutputs
•To evaluate reports and metrics in a live pilot store
•To add new metrics and reports if required
•To refine initial models if required
•To work with pilot stores to review the reports and
recommend appropriate actions
InputsInputs ActivitiesActivities
Produce reports for the pilot
store(s)
Work closely with pilot store
managers and review
reports and recommended
actions
Add metrics and reports if
required
Metrics
Reports
Trained Pilot Store(s) users
Pilot store reports *
Documented pilot results *
Documented list of revised
metrics and reports if
added*
*Project Deliverable
2d. Pilot Initial 2d. Pilot Initial
Reports and Reports and
Data ModelsData Models
1b. A sse ss 1b. A sse ss
Opport un itie s & Opport un itie s &
Be st Pra ctice sBe st Pra ctice s
0. Pre pa re & 0. Pre pa re &
Prioritiz ePrioritiz e
1a . Pre pa re for & 1a . Pre pa re for &
Co ndu ct Store Co ndu ct Store
Vi sit sVi sit s
1c. Con du ct De taile d Vide o 1c. Con du ct De taile d Vide o
Ana lysi s Ana lysi s
1d . De ve lop 1d . De ve lop
Pilot Pilot
Re comme nRe comme n
da ti onsda ti ons
3a . Pilot Quick 3a . Pilot Quick
Hit sHit s
3b. Pilot S tra te gic Ini tiative s3b. Pilot S tra te gic Ini tiative s
3c. Imp leme nt 3c. Imp leme nt
Ne w Ne w
Opera ting Opera ting
M ode lM ode l
Store ObservationsStore Observations
4. P e rform Cha nge Ma na ge me nt Activitie s4. P e rform Cha nge Ma na ge me nt Activitie s
2c. Pe rfor m Da ta 2c. Pe rfor m Da ta
Di scove ry & Di scove ry &
Ge ne ra te Ge ne ra te
Re portsRe ports
2b. Pe rform Da ta 2b. Pe rform Da ta
Ma p ping Ma p ping
2a . ID Front End 2a . ID Front End
Pro ductivit y Pro ductivit y
Me trics & Me trics &
Re port sRe port s
2d. P ilot In itia l 2d. P ilot In itia l
Re ports a n d Re ports a n d
Da ta Mod e lsDa ta Mod e ls
Producti vity M etricsProducti vity M etrics

33. 33 ©IBM Corporation
Piloting the proposed changes enables retailers to reduce risk,
measure impact prior to full scale implementation and validate
and formalize the changes
To test recommended Quick Hits in a live store
environment
To test recommended Strategic Initiatives in a live store
environment
APPROACH and SAMPLE RESULTS
IBM approach
3a. & 3b.. Pilot3a. & 3b.. Pilot
Quick Hits and Quick Hits and
Strategic Strategic
InitiativesInitiatives
ApproachApproach
OutputsOutputsInputsInputs ActivitiesActivities
Establish pilot program
agreement and objectives
Review and measure pilot
results
Revise new models as needed
Identify technical dependencies
Define business constraints
and priorities (timing,
resources, funding)
Prepare implementation plan(s)
Gain approval for
implementation
Quick Hits:
–Job Roles, Responsibilities &
Competencies
P
–New Operating Procedures
P
–Performance Management
System and Rewards
P
Pilot Objectives
Pilot Results
Revisions to Change
Management Strategies
and Tactics (if necessary)
High Level Implementation
Plan *
*Project DeliverableP
Deliverable / work product from prior step
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1b. A sse ss 1b. A sse ss
Opport un itie s & Opport un itie s &
Be st Pra ctice sBe st Pra ctice s
0. Pre pa re & 0. Pre pa re &
Prioritiz ePrioritiz e
1a . Pre pa re for & 1a . Pre pa re for &
Co ndu ct Store Co ndu ct Store
Vi sit sVi sit s
1c. Con du ct De taile d Vide o 1c. Con du ct De taile d Vide o
Ana lysi s Ana lysi s
1d . De ve lop 1d . De ve lop
Pilot Pilot
Re comme nRe comme n
da ti onsda ti ons
3a . Pilot Quick 3a . Pilot Quick
Hit sHit s
3b. Pilot S tra te gic Ini tiative s3b. Pilot S tra te gic Ini tiative s
3c. Imp leme nt 3c. Imp leme nt
Ne w Ne w
Opera ting Opera ting
M ode lM ode l
Store ObservationsStore Observations
4. P e rform Cha nge Ma na ge me nt Activitie s4. P e rform Cha nge Ma na ge me nt Activitie s
2c. Pe rfor m Da ta 2c. Pe rfor m Da ta
Di scove ry & Di scove ry &
Ge ne ra te Ge ne ra te
Re portsRe ports
2b. Pe rform Da ta 2b. Pe rform Da ta
Ma p ping Ma p ping
2a . ID Front End 2a . ID Front End
Pro ductivit y Pro ductivit y
Me trics & Me trics &
Re port sRe port s
2d. P ilot In itia l 2d. P ilot In itia l
Re ports a n d Re ports a n d
Da ta Mod e lsDa ta Mod e ls
Producti vity M etricsProducti vity M etrics

34. 34 ©IBM Corporation
The final step in the project is implementing the new business
model, measuring actual results and integrating continuous
improvement into the company’s culture
To implement the changes into the retailer’s business
model and integrate a culture of continuous
improvement
APPROACH and SAMPLE RESULTS
IBM approach
3c. Implement New 3c. Implement New
Operating ModelOperating Model
ApproachApproach
OutputsOutputsInputsInputs ActivitiesActivities
*Project Deliverable
Implement new procedures,
roles and responsibilities,
equipment / technologies
and layouts
Develop continuing
improvement strategy and
plan
Change Management
Strategies and Tactics
P
High Level Implementation
Plan
P
Implementation results
Continuing improvement
strategy and plan
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1b. A sse ss 1b. A sse ss
Opport un itie s & Opport un itie s &
Be st Pra ctice sBe st Pra ctice s
0. Pre pa re & 0. Pre pa re &
Prioritiz ePrioritiz e
1a . Pre pa re for & 1a . Pre pa re for &
Co ndu ct Store Co ndu ct Store
Vi sit sVi sit s
1c. Con du ct De taile d Vide o 1c. Con du ct De taile d Vide o
Ana lysi s Ana lysi s
1d . De ve lop 1d . De ve lop
Pilot Pilot
Re comme nRe comme n
da ti onsda ti ons
3a . Pilot Quick 3a . Pilot Quick
Hit sHit s
3b. Pilot S tra te gic Ini tiative s3b. Pilot S tra te gic Ini tiative s
3c. Imp leme nt 3c. Imp leme nt
Ne w Ne w
Opera ting Opera ting
M ode lM ode l
Store ObservationsStore Observations
4. P e rform Cha nge Ma na ge me nt Activitie s4. P e rform Cha nge Ma na ge me nt Activitie s
2c. Pe rfor m Da ta 2c. Pe rfor m Da ta
Di scove ry & Di scove ry &
Ge ne ra te Ge ne ra te
Re portsRe ports
2b. Pe rform Da ta 2b. Pe rform Da ta
Ma p ping Ma p ping
2a . ID Front End 2a . ID Front End
Pro ductivit y Pro ductivit y
Me trics & Me trics &
Re port sRe port s
2d. P ilot In itia l 2d. P ilot In itia l
Re ports a n d Re ports a n d
Da ta Mod e lsDa ta Mod e ls
Producti vity M etricsProducti vity M etrics

35. 35 ©IBM Corporation
Change management activities help create awareness and buy-in
throughout the project and are key for implementation success
To help impacted store staff understand the need for
transformation and gain their involvement and insights
To create understanding of & commitment to the new
model
To provide employees the capabilities to make needed
adjustments
APPROACH and SAMPLE RESULTS
IBM approach
4. Perform Change 4. Perform Change
Mgmt. TasksMgmt. Tasks
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ApproachApproach
OutputsOutputsInputsInputs ActivitiesActivities
Secure executive sponsorship
Perform Change Readiness
Assessment
Identify major change areas and
impacted roles
Update job roles and rewards
structures
Identify training requirements
incorporate changes into
training and operating manuals
Create / execute communication
strategy and plan
Create transition plan
Client’s business strategy
Key client sponsors
Deliverables throughout the
project
Client’s store operating
policies and procedures
manual(s)
Client’s organization
chart(s)
IBM Change Management
Tools and Approach
Change Readiness
Assessment *
Job Roles, Responsibilities &
Competencies
New Operating Procedures
Performance Management
System and Rewards
Education & Training
Strategy *
Communication Strategy &
Plan *
Transition Plan *
Change Leadership Plan*
*Project DeliverableP
Deliverable / work product from prior step
1b. A sse ss 1b. A sse ss
Opport un itie s & Opport un itie s &
Be st Pra ctice sBe st Pra ctice s
0. Pre pa re & 0. Pre pa re &
Prioritiz ePrioritiz e
1a . Pre pa re for & 1a . Pre pa re for &
Co ndu ct Store Co ndu ct Store
Vi sit sVi sit s
1c. Con du ct De taile d Vide o 1c. Con du ct De taile d Vide o
Ana lysi s Ana lysi s
1d . De ve lop 1d . De ve lop
Pilot Pilot
Re comme nRe comme n
da ti onsda ti ons
3a . Pilot Quick 3a . Pilot Quick
Hit sHit s
3b. Pilot S tra te gic Ini tiative s3b. Pilot S tra te gic Ini tiative s
3c. Imp leme nt 3c. Imp leme nt
Ne w Ne w
Opera ting Opera ting
M ode lM ode l
Store ObservationsStore Observations
4. P e rform Cha nge Ma na ge me nt Activitie s4. P e rform Cha nge Ma na ge me nt Activitie s
2c. Pe rfor m Da ta 2c. Pe rfor m Da ta
Di scove ry & Di scove ry &
Ge ne ra te Ge ne ra te
Re portsRe ports
2b. Pe rform Da ta 2b. Pe rform Da ta
Ma p ping Ma p ping
2a . ID Front End 2a . ID Front End
Pro ductivit y Pro ductivit y
Me trics & Me trics &
Re port sRe port s
2d. P ilot In itia l 2d. P ilot In itia l
Re ports a n d Re ports a n d
Da ta Mod e lsDa ta Mod e ls
Producti vity M etricsProducti vity M etrics

36. 36 ©IBM Corporation
Sample DeliverablesSample Deliverables: Since change management activities focus
on preparing and assisting the company throughout the change,
deliverables are traditionally assessment, strategy and planning
Sample Communications Plan
[TBD]
Go Live Date 9/1/2000
Communications Task Owner Vehicle Audience Message Ideal Timing Start Date
End/Pub
Date
5/5
HR trng. schedules/rosters DACG Email HR Directors Provide HR trng. schedules/rosters 6 weeks prior to go live 5/5/20007/21/2000
BPO mtg Ron Clark Meeting Randy Smith & Nita
Sanders
Bi-weekly project status Every 2 weeks or as
needed
5/5/2000 multipleXXXXX
XXXXX
XXXX
Trng. DACG Classroom HR team members End-users Pilot Project system task One month prior to go
live
5/5/20008/4/2000
Demo. Ops Manual Peggy Lane Meeting Randy Smith, Doug
Anderson
Review Ops Manual layout and
content
One month prior to go
live
5/5/20008/4/2000
Cutover procedures Change
Management
Email HR team members Communicate that nothing will
change during cutover. The process
will remain the same.
3 weeks prior to go live 5/5/20008/11/2000
Brown Bag meeting(s) Change
Management
Meeting HR team members Provide users with a basic
understanding of why Pilot Project,
what Pilot Project means to them, as
well as an opportunity to ask
questions
2 - 3 weeks prior to go
live
5/5/20008/11/2000
Overview conference call Ralph
Santosuosso
Conference Call Field HR team
members
Provide users with a basic
understanding of why Pilot Project,
what Pilot Project means to them, as
well as an opportunity to ask
questions
2 - 3 weeks prior to go
live
5/5/20008/11/2000
Sample Excerpt from Change Readiness Assessment
IBM approach
Q-Mart /IBM Confidential
13
Because of some functional overlap with ParentCo and
resource limitations, the current organizational design could
impact availability of resources for a transformation project
Issues
1.Q-Mart is has organizational overlap with ParentCo P
(i.e. shared resources and reporting structure)
2.Q-Mart lacks resource depth across most functional
units which may impact project staffing
3.Some employees will have to perform double duty
during the Front End Optimization project
4.Other projects in progress may stretch or limit project
resources in 2000
5.Key business leaders in Store Operations are not in
place
6.Current roles and responsibilities are not documented
and training is not consistently executied
7.Future outsourcing considerations of certain functional
responsibilities will alter the design of the organization
Issues
1.Q-Mart is has organizational overlap with ParentCo P
(i.e. shared resources and reporting structure)
2.Q-Mart lacks resource depth across most functional
units which may impact project staffing
3.Some employees will have to perform double duty
during the Front End Optimization project
4.Other projects in progress may stretch or limit project
resources in 2000
5.Key business leaders in Store Operations are not in
place
6.Current roles and responsibilities are not documented
and training is not consistently executied
7.Future outsourcing considerations of certain functional
responsibilities will alter the design of the organization
Issue Resolution Recommendations
•Coordinate a company-wide kick-off meeting to explain
the reasons for change into Q-Mart
•Where possible, dedicate Q-Mart resources to the project
•Shift responsibilities or bring in temporary help where
necessary to supplement Q-Mart resource commitments
to the project
•Execute the system project with no outsourcing
decisions in mind (i.e. view Q-Mart as a stand-alone)
•Within the Organizational Change Management
component allow for new/changed positions to be
developed without ParentCo or current Q-Mart
requirements
Issue Resolution Recommendations
•Coordinate a company-wide kick-off meeting to explain
the reasons for change into Q-Mart
•Where possible, dedicate Q-Mart resources to the project
•Shift responsibilities or bring in temporary help where
necessary to supplement Q-Mart resource commitments
to the project
•Execute the system project with no outsourcing
decisions in mind (i.e. view Q-Mart as a stand-alone)
•Within the Organizational Change Management
component allow for new/changed positions to be
developed without ParentCo or current Q-Mart
requirements
Benefits
•Demonstrates Q-Mart management commitment to
business transformation
•Avoids message confusion on project purpose
•Develops permanent core team of Front End
Optimization system users
•Prepares the organization for significant change
•Assures the organization is in line to successfully
operate in the new environment
Benefits
•Demonstrates Q-Mart management commitment to
business transformation
•Avoids message confusion on project purpose
•Develops permanent core team of Front End
Optimization system users
•Prepares the organization for significant change
•Assures the organization is in line to successfully
operate in the new environment

37. 37 ©IBM Corporation
The IBM Services DifferenceThe IBM Services Difference
Identify top priority operational areas for focus during the project
Use of proven tools, frameworks and retail store operations best
practices to streamline project activities
Hypothesis driven approach to identify and prioritize business process
optimization opportunities
Formal and informal observation techniques to identify opportunities
and quick hits which serve as input to business case justification
Metrics based approach to quickly measure effectiveness and
implement changes
DEFINITION
Our approach and proven tools enable us to quickly identify and
assess a retailer’s front end operations and outline the most
appropriate actions to achieve results
IBM approach

38. 38 ©IBM Corporation

Performance Metrics Team
Client Lead
IBM Lead
Org. Change Management
Client Lead
Program Oversight Team
Client Program Manager
IBM Engagement Manager
Store Observation Process Team
Client Lead
IBM Lead
(2) Process Analysts- IBM
(1) Process Analyst- Client
Business SME-Client
IT SME Legacy & Arch.
Client
Business SME-IBM
IT Architect- IBM
IBM SME
Our approach is to collaborate with teams of our client’s best
people as our experience has shown this delivers a higher quality
result in less time
Client Provides:
Executive sponsorship
•Business Direction and Strategy
Insight
•Business Process and Operational
Knowledge
•Existing technology and
application knowledge
•Access to documentation,
operations management and
users
IBM Provides:
•Proven methodology tailored to
meet client’s objectives to
assure consistent, high quality
results
•Proven analytical approaches
•Facilitation of work sessions
•Industry subject matter experts
•Project planning and
management
•Results-oriented
recommendations
•Customer satisfaction focus
IBM approach

39. 39 ©IBM Corporation
Sample Project Work Plan
0. Prepare &
Prioritize
1a. Prepare for & Conduct
Store Visits
2a. ID Productivity
Metrics & Reports
2c. Perform Data
Discovery
2b. Perform Data Mapping
1d. Develop Pilot
Recommendations
2d. Pilot Initial Reports and Data Models
1b. Assess Opportunities
& Best Practices
1c. Conduct Detailed Video Analysis
3a. Pilot Quick Hits
3b. Pilot Strategic Initiatives
3c.
Implement
0 2 4 6 8 10 12 14 16 18 20
Weeks
4. Perform Change Management Activities
IBM approach

40. 40 ©IBM Corporation
To perform a Retail Front End Optimization project, the cost for
consulting hours can range between $250,000 and $2 million
Factors impacting project cost include:
–Client resource availability and expertise
–Client’s current use of a productivity metrics tool or similar application
–Current level of definition of client’s retail metrics and reports
–Client’s desire to perform both Productivity Metrics and Store Observation work
simultaneously (each can be performed independently)
–Level of detail deemed necessary (by client and IBM) for Store Observation work
–Other initiatives performed related to front end optimization
–Client timeframes (e.g., budgets, board meetings)
–Number of desired store observations
–Condition and readiness of client’s sales transaction data
Cost estimate includes consulting hours for activities through pilots (steps 3a and
3b), not including implementation (3c)
Note: The above cost range is for budget and planning purposes only and does not represent a formal Proposal or Statement of Work.
Cost does not include travel and living expenses, which are traditionally estimated at 15-20% of consulting price.
IBM approach

41. 41 ©IBM Corporation
Contents
Problem Definition and IBM Offering OverviewProblem Definition and IBM Offering Overview
ApproachApproach
Client Examples
The Path ForwardThe Path Forward

42. 42 ©IBM Corporation
Our store operations experience encompasses many retail
industry segments
Specialty
Hardlines
Specialty
Softlines
Consumer
Electronics
Department
Stores
Drug
Stores
Discount
Stores
Eating and
Drinking
Grocery
Stores
Client ValueClient Value
client examples

43. 43 ©IBM Corporation
ChallengeChallenge
ReasonReason
VisionVision
ProjectProject
ResultResult
IBM analyzed Frank’s Nursery & Crafts front-end
configuration, recommending changes to existing and
future design plans
To Identify the best combination of process and technology solutions to optimize
front end efficiency and configuration
Frank’s Nursery & Crafts had older POS equipment and cash wrap concerns with their
current store layout, inhibiting both cashier motions and customer throughput at checkout.
They sought improvements to existing workstations and suggested configurations for
future stores.
To craft a front-end design and technology solution that incorporates proper ergonomic and
efficiency design, best suited for specialty nursery, hardware and crafts retailing.
The project team utilized in-store video and direct observation to document the current
status, focusing on these key areas:
Procedures
•Queuing
•Scanning
•Bagging
•Tender
•General
Equipment
•Printers
•Phones
•Scanners
Configuration
•Equipment and housing layout
The project team identified multiple areas for improvement and provided competitive
benchmarks in all areas. Combining cross-industry best practices with the limitations of the
space availability, IBM created a portfolio of design and technology solutions and a
cost/benefit analysis for each.
client examples

44. 44 ©IBM Corporation
ChallengeChallenge
ReasonReason
VisionVision
ProjectProject
ResultResult
Blockbuster commissioned IBM to help them improve their
check out process through video analysis and identification
of process bottlenecks
To optimize the checkout process using detailed video analysis and manual observations,
identifying process bottlenecks and offering improvement recommendations.
Blockbuster was seeking to improve customer throughput and minimize checkout
inefficiencies caused by a variety of transaction types, store layouts, tender methods, and
service-time activities
To improve the overall in-store experience for customers in the checkout process, addressing
aspects of queue time point-of-sale activities.
The project team visited nine Blockbuster stores during peak weekend hours, gathering
data on transaction activities, process and practice information, and customer queue
information via the following methods:
•Videotape of the checkout queue and front-end registers
•Direct observation and manual data recording
•Informal discussions/interviews with store personnel
•Exit surveys with customers to document perceptions
Detailed analysis of data was directed at recommending improvements to the front-end
register workstations and procedures that would result in cost savings or productivity gains.
From observations and analysis, the project team identified three main bottlenecks in the
Blockbuster checkout process: customer ID verification, credit, debit and gift card tender, and
miscellaneous delays. IBM outlined a detailed set of recommendations to address each of
the problem areas, designed to alleviate both real and perceived impediments to the
checkout process. IBM also worked with Blockbuster to incorporate feedback and comments
from customers and store personnel into the design of future business processes.
client examples

45. 45 ©IBM Corporation
ChallengeChallenge
ReasonReason
VisionVision
ProjectProject
ResultResult
Canadian Tire Corporation asked IBM to review its existing
checkstand designs and assess the productivity of its
front-end Point of Sale (POS) register workstations
To Identify best practices in checkout processes and store design to optimize
customer throughput and enhance overall front end appearance and functionality.
Canadian Tire was concerned about customer service desk procedures and front-end
transaction and queuing times versus other retailers. In addition, workstation configuration
was limiting both cashier efficiency and customer flow.
To design a new front end strategy, employing best practices from a broad array of retailers
in checkstand design, cashier behavior, customer education, and technology applications.
Using videotape analysis and direct observation, the project team documented the “As Is”
processes around existing checkout workstations and the service/returns desk, intending
to provide recommendations on the following:
•Customer Experience
•Cash Lane Footprint
•Transaction Processing
•Security
•Navigational Aids
Using detailed videotape analysis, the project team provided insight into the nature and type
of problems around checkstand design and POS productivity. Recommendations were
clustered around each problem area, incorporating new technology where appropriate to
quicken transactions, improve customer service and improve item pricing integrity.
•Hardware Layout and Configuration
•Peak Sales Management
•Process Delay Management
•Training Needs
•Technology
client examples

46. 46 ©IBM Corporation
Contents
Problem Definition and IBM Offering OverviewProblem Definition and IBM Offering Overview
ApproachApproach
Client ExamplesClient Examples
The Path Forward

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the path forward
The work session will include:
•Review of IBM’s project approach
•Review of required inputs and key outputs
•Review of existing documentation of your processes,
reports and metrics
•Documentation and validation as we conduct the session
Preparation will ensure value for all participants, thus we ask that you provide
responses to specific questions (next page) prior to the work session.
For Example:For Example:
How do you currently measure front end productivity? How do you currently measure front end productivity?
Do you use labor standards and/or a scheduling application for cashiers?Do you use labor standards and/or a scheduling application for cashiers?
Do you use a standard method to roll new processes and policies to the stores?Do you use a standard method to roll new processes and policies to the stores?
To begin [CLIENT]’s Front End Optimization project, we recommend
conducting a collaborative work session to establish project
parameters, gather data and construct a high level project plan
Front end performance
Productivity
Customer Satisfaction

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It is important to include resources closest to and most knowledgeable
about [CLIENT’S] retail operations to achieve work session objectives
Retail Operations, VP and Director Level
Retail Field Management
Retail Store Management (all levels)
Retail Store Training Staff – Front End
Customer Service
Store Level IT Support Staff
the path forward

49. 49 ©IBM Corporation
During our work session, we will use your responses to the following
points to identify areas needing additional data and consideration, and
as input to begin project activities
Retail chains and types to be included in the
project
Total number of stores by chain
Number and descriptions of different front end
prototypes included
If applicable, average number of lanes per
store by chain
Number of cashier areas within the store to be
studied (are there “satellite” areas to be
included?)
Approximate number of cashiers per store (full
vs part time) by chain
Front end payroll expense, by chain as a % of
sales (by function: cashier, customer service
desk, etc)
Cashier turnover statistics (full vs. part time, by
chain;other important statistics if captured, i.e.
turnover by tenure)
Cost of on-boarding a new cashier (hiring,
training, etc.)
POS solution by chain: hardware, peripherals,
application(s) and version
Use of transaction log (t-log) data, including
method to poll to central location and data
storage
Use of Shrink Prevention solution(s) by chain
Use of Labor Scheduling and Time &
Attendance applications (version, platform,
integration points, etc)
Current labor standards for cashiers and how
derived (if used)
Samples of cashier productivity reports,
exception reports and other performance
metrics provided to store management
Peak sales hours and days of week
Methods used to roll out new processes and
policies to the stores
Other current / future initiatives related to this
effort
Black-out dates applicable to project activity
the path forward