Six Tips for Increasing Operational Efficiency

Anthony Henry
Customer Program Manager

To remain competitive, businesses must boost their operational efficiency wherever possible. It’s particularly important for brick and mortar stores to operate efficiently, due to the recent boom in e-commerce and unified commerce. Sooner or later, any retailer not operating efficiently will be out of business.To remain competitive, businesses must boost their operational efficiency wherever possible. It’s particularly important for brick and mortar stores to operate efficiently, due to the recent boom in e-commerce and unified commerce. Sooner or later, any retailer not operating efficiently will be out of business.

What is the meaning of Operational Efficiency?

Operational Efficiency is defined as the ratio of input utilized in carrying out a retail operation to the output produced with those inputs. Inputs maybe raw materials, labor and capital among other things, whereas output maybe goods, ROI, customer loyalty and other items.

The following are six tips to increase your organization retail operational efficiency by reducing costs, improving customer satisfaction and staying ahead of the competition.

  1. Develop a long-term workforce management solution plan. Whenever you replace your current workforce management tool that has become obsolete or ineffective, it may prove disruptive to workers—and that results in low productivity. You can minimize or eliminate such disruptions by carefully determining your short- and long-term business objectives and carefully mapping your new Workforce Solutions to meet those objectives.
  2. Assign Store labor based on engineered labor standards. Engineered labor standards are the key components of any workforce management system. It incorporates a proven methodology, developed using fundamental Industrial Engineering principles, along with several leading-edge tools to develop realistic values for all areas of store operations, thus distributing earned labor based on work content.
  3. Reduce unproductive travel time through workplace organization. Aside from the minutes and hours you’ll save by not having to search and travel for indispensable items, an organized workplace can improve efficiency by aligning your work space with operational processes. An organized work environment stores material as close as possible to the location where they are used. Taking the time to organize your space according to the department activities not only improves workflow by saving steps, it also forces retailers to think through the different aspects of their operation, and how to approach them efficiently and systematically.
  4. Outsource or centralized labor tasks. Is it the best use of an employee’s time to do work that can be easily outsourced or moved to a centralized facility to reduce labor while improving efficiency?  Often, a more efficient option is to outsource such labor-intensive tasks to a centralized location without compromising the quality of the product offering.

    Also, outsourcing and or centralizing labor-intensive tasks enables your employees to stay focused on productive activities related to your organization’s core competencies. This can also help improve customer satisfaction and your company’s competitiveness.

  5. Improve your internal customer retention and satisfaction. When your retail operation has inefficient processes, such as antiquated technology and outdated equipment, employees can get frustrated because they can’t get their jobs done with the tools provided. Your external customers may perceive those frustration and lose confidence in your organization. Even worse, valued employees can become burned out and decide to move on. Not only have you lost a productive worker, you must spend time and money hiring a replacement. To help ensure employees are productive and satisfied, your retail organization needs, at a minimum, an updated technology system and reliable equipment and tools for employee usage.
  6. Provide employees with secure, consistent access to information via a tasks management solution. An advantage of a task management solution is its ability to react quickly to assigning specific tasks throughout your retail organization to a specific end user. If your company network is frequently down, sluggish or unsecured, your competitive advantage begins to erode. A secure, reliable, self-defending task management solution based on intelligent routers to the end users provides your organization with maximum agility by providing reliable dissemination of tasks, throughout your retail system network.

If you can successfully achieve the six tips outlined for operational efficiency, your organization day to day activities will cease to be a drain on motivation and start adding real value to your business bottom line and longevity.