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Improving Efficiency in a Furniture Retailer

Case Study

Fair Price is a Furniture Retailer (cash and lay-bye) of locally manufactured and imported furniture and appliances, with stores in townships, central business districts, suburban and regional shopping malls and value marts.

At the end of 2015, the organisation was at the end of an aggressive growth period. It was struggling in the transition to becoming corporate, its growth had plateaued and it was losing market share in a highly competitive market. Its long-term sustainability was under threat.

Two fundamental issues were identified. The first was the sub-optimal levels of commitment and passion to the success of the enterprise. This was present throughout the hierarchy. The second was a point of sale process that was inefficient, costly and lacked transparency

Leadership Journey

Schuitema Group contributed to an intervention to revitalize the leadership and organisational culture.

The objectives for this initiative was to firstly establish commitment and passion within the leadership hierarchy for their roles as leaders and the impact that they can have on and for their subordinates.

The second was to re-establish the commitment and passion within the leadership hierarchy to the contribution that Fair Price makes to the market.

Care & Growth

In 2016 the executive team attended a 2-day Introduction to Care and Growth workshop that set the criteria for effective leadership and issued a call to action for the executive leadership team to drive empowerment down the line.

They attended a one-day session to frame the Benevolent Intent of the organisation. The executive leadership team defined the contribution that the organisation makes to the market. The statement that was agreed on was “Furnishing Homes. Raising a Nation.”

Subsequent to this, in 2017, the rest of the leadership team, down to Store Manager level, attended the 2-day Introduction to Care and Growth workshop.

Leaders were held accountable consistently with the criteria of Care and Growth. The greatest impact from these measures was the drastically improved drive and motivation within the executive team to serve their customer base in new and improved ways by driving empowerment through the hierarchy.

Re-engineering the Point of Sale Process

The executive team applied the Care and Growth principles to achieve exemplary improvements in their point of sales process, improving business performance across all key metrics.

The Changes involved the following structural shifts:

  • From

  • per
  • Store-based/local warehousing
  • Delivery drivers based at the store
  • Pull process at warehouses
  • -
    Staff compliment at the store of:
    Manager
    Designate Manager
    2-10 Sales Staff
    1-5 Cashiers
    1-8 Drivers
    _
  • Drivers paid by customers
  • To

  • per
  • Central Warehousing
  • Drivers based remotely
  • System moves transactions
  • Large warehouse footprint
  • -
    Staff compliment per store:
    Manager
    Sales staff (2-10)
    Cashiers (1-2)
    _
  • Drivers paid by system
  • Stores for display only

The old point of sale process had the following weaknesses

Staff misconduct

Sales people selling invoices. Drivers duplicating invoices

Long wait times

Customers waiting up to two weeks for deliveries

Accountability

Lack of transparency producing low levels of accountability

High costs

High warehousing costs

Points of failure

Large number of possible points of failure, without ability to hold accountable at each point

Overstocked

High stock holding

In the process of re-designing the new process,

the following Care and Growth principles were integrated:

Clarify Contributions by ensuring that each deliverable or contribution for each individual is specifically described and communicated.

Each deliverable should adhere to the following criteria:

• There is line of sight between the contribution required and a specific set of results to be achieved for the business.

• Each contribution is transparent and be easily monitored to see whether it has been done to standard.

• Each contribution is unique. Only one person is accountable for one thing at a specific point in time.

• Specific and concrete. Should be easily able to answer the question “was this done to standard or not?”

• Appropriate to the role or level in the organisation.

• Manageable but stretching

• Time bound within a specific reporting cycle

Elevate performance by assessing, enabling and reviewing contribution.

Leadership is to watch the game and understand what needs to be GIVEN to the subordinate to lift performance. When the standard has not been met, the leader is to find out why. He or she must ensure:

• All means are provided, including systems, procedures, support, authority.

• All staff to have the ability to effectively deliver on the contributions required of them, both the how and the why.

Drive empowerment by decreasing control, and increasing accountability.
Empowerment means letting employees make their own decisions, but also ensuring they live with the consequences of their decisions.

Drive accountability by either punishing, warning, recognising or rewarding as appropriate. You only enable the will of people to contribute when you hold them accountable for the contribution they should be making.

Subsequent to this, in 2017, the rest of the leadership team, down to Store Manager level, attended the 2-day Introduction to Care and Growth workshop.

Leaders were held accountable consistently with the criteria of Care and Growth. The greatest impact from these measures was the drastically improved drive and motivation within the executive team to serve their customer base in new and improved ways by driving empowerment through the hierarchy.

The New Point of Sale Process

Schuitema New Point of sales process

The transparency of each contribution required at each step of the process, and the deliberate attention devoted by leadership to watching the game to diagnose points of failure and drive accountability where appropriate, ensured the system was able to produce astounding results.

These included:

• At the start of the journey, they were able to complete 720 deliveries a month on the new system to currently completing 1140 deliveries a month with 10% fewer vehicles.

• Average delivery time decreased from 4-7 days to 1-2 days.

• Transparency eradicated staff misconduct. “Nowhere to hide.”

• Margins increased whilst price to customer decreased.

• Turnover stabilised from steady decline whilst profitability increased.

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and Level 2 B-BBEE recognised supplier.

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