Case Study Of SONAE MC’s Implementation Of Lean In Food Retail Provisions

Overview of Lean Practices in Food Retail Provisions

This case study offers a conversation of in what way SONAE MC, the major food retailer shop in Portugal, has accomplished the application of lean applies in its food retail provisions. Though lean was established in manufacturing backgrounds, in current years numerous facility organizations have underway to approve lean application (Bianchi-Aguiar et al, 2016). Lean’s emphasis on concurrently dipping waste and refining customer pleasure is particularly good-looking in the present business atmosphere in which companies required to amended costs, nevertheless still want to please each demanding consumers. Applying lean is a composite responsibility because: (1) it involves key enterprise and culture variations; (2) numerous of the obligatory variations are counter-intuitive; (3) application in facility settings needs version from regular manufacturing methods. In this framework, sufficiently handling the alteration process is important (Lozano, 2013). The case comprises three key segments: (1) a explanation of the business and the processes in a store; (2) a serious explanation of the procedure of applying lean, comprising experiments faced, means that were recycled to overwhelmed those experiments and presentation influences; (3) an design of the request of lean applies to front-office procedures precise to retail; these procedures are worthy examples of facility procedures in that operation essential to directly reflect the occurrence of the consumer in the process. This report will include the introduction of lean process in the Sonae MC store and its objective for the implementation of lean process in the store. Then it will include the process life cycle used for implementing this lean process in the store in number of phases (Ribeiro Cardoso and Carvalho Pinto, 2010). This report will also include the challenges faced by the Sonae MC in implementing the lean operation in their existing operation. This report will then focus on the importance of lean principles in the customer flow process along with some new ideas. Finally it will include the motivation by which Sonae MC can maintain lean process in its operation.

Subsequent a altering competitive atmosphere, Sonae MC understood that it would either do the whole thing further efficiently, or the margins may not be sufficient to survive the occupation results – it was the establishment of this Lean initiatives and extra effective procedures (at the period no one spoke around lean or continuous improvement): Sonae MC in progress seeing for more applicable approaches, for means to decrease stock and managing, to abridge the supply chain, the period and capacity of the goods (Glanz, Bader and Iyer, 2012). A main upgrading in that era was the concentration of merchandise that not only relieved the occupation for suppliers but also develops it much quicker and well-organized for the Sonae MC to carriage and allocates the products amongst its supplies, dipping out-of-stock circumstances immediately. As phase went by, Sonae MC commenced numerous experiments with advisers and other businesses to discovery improved means for its operations and general enactment, but as ample as they strained to deliver solutions, all they might do was recommending theoretical answers founded upon unclear indications of problems (Jaca et al, 2012).

SONAE MC’s Implementation Process

The primary stage of the process was done in 2007 and had a structured focus on three store processes, three zones of the store operations and application of three lean tools. It started with seminars which were attended by regional operations managers. The focus of this seminar was explaining the lean tool and their applications in the real world. After end of this program each participants have to perform this program on their workshop with their teams which includes training, action plan and identification o the problems (Emond et al, 2012). All the team members were kept together during training so that they can perform same act and the result were very positive.

This stage was conducted in 2008 which is also known as expanding phase. In this step the company decided to expand it in every possible way in all zones of the store. It focused on additional lean practices in which all employees are included along with Human resources. An action plan was developed with combined efforts and a constant monitoring was done with monthly meeting through video conferencing (Lee et al, 2008). The store achieved finest improvement in their operation. 

The store entered in phase three in 2009-10. This stage was based on solemnization and steadiness. The numbers of stores were large in amount so the visibility of this process was very less. Hence they decided to conduct an audit in which they found variations in the results with over 50% performance on average scale (Papies et al, 2014). Seeing this result they decided to follow a consistency process instead of involving addition process. They divided it in two levels Level 1 which focus on tools of the lean process along with balance score card and KPI`s.

This final stage was conducted in 2009-11 and is known as internal logistics / Pilot stage. In this stage the focus was maintained on Level 1 and then Level 2 which was focus on layout reshaping, refining flow and logistic sequences along with value stream mapping. 

Currently, thanks to a Lean approach, Sonae MC has enhanced the mode in which it provisions its stores and it was capable to cut conveyance connected costs by more than 4%, while fixed observance a similar facility level to stores. After numerous repetitions, Sonae MC has chosen for a resolution where the kind of products merger is upheld steady through the year because it is not very difficult to operationalize in the storerooms (Dorota Rymaszewska, 2014). The Sonae MC Stores aimed at the type of resource was altered obtain currently more products composed and at a former hour, which permit defers to be refilled sooner. In this conversation we represent the choice framework accountable for influencing and change the novel decisions, as well as the change managing dares confronted. At the central of this outline here are three connected optimization setup that utilize together mathematical encoding and logics. In the Sonae MC Food retail segment, upholding the food excellence crosswise the supply chain is of dynamic position (Poksinska, Swartling and Drotz, 2013). The excellence of the products is related on its storing and conveyance situations. This individuality upsurges the supply chain difficulty reasonably to other kinds of retailers, prominent to three kinds of entangled food supply chains: freezing, relaxed and ambient. Products with dissimilar temperature necessities essential to be deposited distinctly can be conveyed collectively as long as the obligatory conveyance circumstances are ensured. In this Sonae MC Framework, discovery the finest product-delivery style is a tough problem that wants to be undertaken using the correct investigative tools devising the practical side-constraints entrenched. The applied method has two advanced contributions: (1) An optimization method to discovery the finest product-delivery style suitable to be functional in real-world sets; and (2) a vibrant indication of the substantial investments that can be attained with such a practical method to product-delivery styles in grocery trading (Akkerman, Farahani and Grunow, 2010).

Challenges Faced by SONAE MC During Implementation

The Sonae MC Optimization procedure comprises three connected models: – Merging pattern – A mixed-integer programming pattern is uttered to recognize the finest type of alliances for every store. The aim is to exploit the amount of direct batches to every stock attractive into negotiation the operational landscapes defined, just like minimum application of the automobiles and the suppleness to alteration the alliance along the period: – Distribution Centers Capacity pattern – The stores with possible to be abounding straight with products consolidated are placed to describe the importance of provision to the hub (Wong and Wong, 2011). The Sonae MC stores are then owed to the hub’s slits of period rendering to their time of groundwork, which is reliant on the pre-defined time-window, period of portable and period of storing the freight.- Solution Evaluation pattern – This stage reproduces three machineries of charge, namely the conveyance cost of providing straight the stores that combine, the conveyance and warehouse cost of moving the products to the alliance hub and the conveyance cost of the enduring stores being delivered with routes.

Usually there is a misunderstanding that lean activities can be excellently applied only in the manufacturing segment. But survey discloses that that lean programs can be positively applied in service subdivision also leading to established valuable financial consequences and excellent customer fulfillments (Piercy and Rich, 2009). Leanness is not only limited to the tools but also it encirclements the contribution of a vigorous staff. Through dissimilar methods, many suggestions have been made to advance the workflow concluded the solicitation of lean practices to eliminate the non-value additional activities. By analyzing the results, it can be said that lean does not have a single model of tools or practices and standards for services. It can be noticed that each author uses a “mix” of tools and practices that in their opinion best serves in an operation, this is, a collection of the best practices applied to specific needs of a company and its line of services (Suarez-Barraza and Ramis-Pujol, 2010).

Hence, Sonae MC must use lean principles also in the customer flow because it will not only help them provide the full satisfaction to the customer but also help the employees to solve the queries of the customer very fast which will help in saving both time and the money of the store (Radnor and Walley, 2008). If customer satisfaction advances, and one’s capability and ability to chance work about earlier also develop, it means that an influential business development tool, which has vigorously shaped a competitive benefit for the company in the marketplace. The principles of Lean Flow highlights that the finest method to run a procedure is to utilize the minimum capitals and time as conceivable, from beginning to end, thus looking for to connection as much worth supplementary steps composed – Focus to create one and transfer it on as it is the supreme well-organized option (Gummesson, 2008).

Importance of Lean Principles in Customer Flow

In investigation, it is establish that lean squads and managers play a significant part in the application of a commercial lean program. We did not discover upkeep for the normal disapproval that they separate the rest of the workforces from appealing in the lean platform. In its place, it is found that the teams assist a coordinating part (Ab Wahid and Corner, 2009). They assist workforce’s adopt about lean ideologies, and they backing them in improvement events. The excellence of the resolutions provided the application of user friendly productivities and automatic generated responses gave the essential motivation for the extensive use of the novel solutions by the company consultants, specifically by the conveyance director. To safeguard a smooth changeover acceptance was reformist: the clusters of Sonae MC Stores that assured the extreme investments had primarily altered company’s product-delivery style and, only later, the enduring stores shadowed (Azevedo et al, 2012). The consequences of the framework go outside improved decisions and they spread to a strengthened assignation in beholding to operations form a changed viewpoint having an assertiveness focused on price optimization that might yield resolutions that were not effortlessly planned empirically (Ichimura, Arunachalam and Page, 2008). This emphases on the following themes:- How to resourcefully discovery the finest product-delivery styles for grocery retail stores- How to interpretation for operational particulars in premeditated supply chain choices both in terms of demand decorations and comprehensive costing.- How to strategy a connected optimization outline to fine-tune the alliance strictures, test strategic judgments and smooth the changeover to a real-world application.- The compensations of an method that goes bottomless into the retail operations over outdated optimal resolution approaches that necessitate numerous theoretic assumptions.- An interesting approach to change management by giving accurate, detailed and directed information about future indicators with the operational and managerial outputs of the optimization framework (Netland, Schloetzer and Ferdows, 2015). They can make use of software like SAP which is totally computerized and can also ensure the level of lean operation with high level of accuracy as compared to workforce. Along with this the stores can make use of new updates like self-checkout in which no person is required for this counter. It is currently operated in Japanese Supermarket and it is very successful. It reduces the waiting time of the customer and will make them feel like King.

Conclusion

Sonae MC is deliberated the first victory case of lean operation in the retail business. Before establishing a correct role model for numerous companies, Sonae MC had gone for a long walk. Though, the step taken by this company was not easy because nobody had done it before and there was always a fear of failure. The company was very much confused whether a training program can lead the company towards continuous improvement not only in one store by it has to implement in to all its stores across the nation. This case clearly indicates that if the company has a strong leader and a force of devoted workforce, anything can be possible. They also have covered that success do not comes easily, as it has combinations of success and failure in its way towards lean process. One of its success points after implementing lean tools was, maintaining its focus on the consistency of the operation instead of going on adding one more additional lean tool. One suggestion can be it should related its process with software than can take better care of lean operation along with the customer satisfaction of the company in combine pattern and also it should implement self-checkout process in their all stores to speed the checking out process because from study it has been found that customer feel very inpatient during checkout from the store.

Maintaining Lean Process in SONAE MC’s Operations

References

Ab Wahid, R. and Corner, J. (2009) Critical success factors and problems in ISO 9000 maintenance. International Journal of Quality & Reliability Management, 26(9), pp.881-893.

Akkerman, R., Farahani, P. and Grunow, M. (2010) Quality, safety and sustainability in food distribution: a review of quantitative operations management approaches and challenges. Or Spectrum, 32(4), pp.863-904.

Azevedo, S.G., Carvalho, H., Duarte, S. and Cruz-Machado, V. (2012) Influence of green and lean upstream supply chain management practices on business sustainability. IEEE Transactions on Engineering Management, 59(4), pp.753-765.

Bianchi-Aguiar, T., Silva, E., Guimarães, L., Carravilla, M.A., Oliveira, J.F., Amaral, J.G., Liz, J. and Lapela, S. (2016) Using Analytics to Enhance a Food Retailer’s Shelf-Space Management. Interfaces, 46(5), pp.424-444.

Dorota Rymaszewska, A. (2014) The challenges of lean manufacturing implementation in SMEs. Benchmarking: An International Journal, 21(6), pp.987-1002.

Emond, J.A., Madanat, H.N. and Ayala, G.X. (2012) Do Latino and non-Latino grocery stores differ in the availability and affordability of healthy food items in a low-income, metropolitan region?. Public health nutrition, 15(2), pp.360-369.

Glanz, K., Bader, M.D. and Iyer, S. (2012) Retail grocery store marketing strategies and obesity: an integrative review. American journal of preventive medicine, 42(5), pp.503-512.

Gummesson, E. (2008) Extending the service-dominant logic: from customer centricity to balanced centricity. Journal of the Academy of Marketing Science, 36(1), pp.15-17.

Ichimura, M., Arunachalam, S. and Page, T. (2008) An Emerging Training Model for Successful Lean Manufacturing-An Empirical Study. i-Manager’s Journal on Management, 2(4), p.29.

Jaca, C., Santos, J., Errasti, A. and Viles, E. (2012) Lean thinking with improvement teams in retail distribution: a case study. Total Quality Management & Business Excellence, 23(3-4), pp.449-465.

Lee, S.M., Olson, D.L., Lee, S.H., Hwang, T. and Shin, M.S. (2008) Entrepreneurial applications of the lean approach to service industries. The Service Industries Journal, 28(7), pp.973-987.

Lozano, R. (2013) Sustainability inter-linkages in reporting vindicated: a study of European companies. Journal of Cleaner Production, 51, pp.57-65.

Netland, T.H., Schloetzer, J.D. and Ferdows, K. (2015) Implementing corporate lean programs: The effect of management control practices. Journal of Operations Management, 36, pp.90-102.

Papies, E.K., Potjes, I., Keesman, M., Schwinghammer, S. and Van Koningsbruggen, G.M. (2014) Using health primes to reduce unhealthy snack purchases among overweight consumers in a grocery store. International Journal of Obesity, 38(4), p.597.

Piercy, N. and Rich, N. (2009) Lean transformation in the pure service environment: the case of the call service centre. International journal of operations & production management, 29(1), pp.54-76.

Poksinska, B., Swartling, D. and Drotz, E. (2013) The daily work of Lean leaders–lessons from manufacturing and healthcare. Total Quality Management & Business Excellence, 24(7-8), pp.886-898.

Radnor, Z. and Walley, P. (2008) Learning to walk before we try to run: adapting lean for the public sector. Public money and management, 28(1), pp.13-20.

Ribeiro Cardoso, P. and Carvalho Pinto, S. (2010) Hedonic and utilitarian shopping motivations among Portuguese young adult consumers. International Journal of Retail & Distribution Management, 38(7), pp.538-558.

Suarez-Barraza, M.F. and Ramis-Pujol, J. (2010) Implementation of Lean-Kaizen in the human resource service process: A case study in a Mexican public service organisation. Journal of Manufacturing Technology Management, 21(3), pp.388-410.

Wong, Y.C. and Wong, K.Y. (2011) Approaches and practices of lean manufacturing: The case of electrical and electronics companies. African Journal of Business Management, 5(6), pp.2164-2174.