For many retailers, the front end is a focal point for labor efficiency due to the sheer volume of each required task. There are numerous ways to improve front end productivity and reap the associated cost savings. Two examples include reducing customer processing time, via tasks like tendering, and optimizing key performance indicators (KPIs), including items per minute (IPM). Within this blog post, the impacts of both tendering and IPM efficiencies are outlined for the purpose of helping you exceed your front end operational expectations.
We can begin with tendering. Normally, retailers divide register productivity into item processing, tender time and idle time. These three processes are monitored through POS systems. Tendering refers to the time between a cashier hitting the “Total” key on the register until he closes the till or prints a receipt. Retailers often use the metric average tendering time to determine this time interval, then they attempt to reduce it. The following are a few tips that might aid in this process.
Loyalty card use
Loyalty cards incentivize loyal customers; shoppers often use these during tendering. Typically, a cashier asks for a loyalty card before scanning and waits for the customer to provide it[JG1] . Per lean engineering principles, every time an employee waits on a customer, the retailer wastes money. One opportunity to avoid waiting is to internalize this task (i.e., include it within another process). For instance, asking the customer to use her loyalty card while the cashier scans items saves time and money.
Customer signature requirements
Included in tendering is the process of customers signing for purchases. Most retailers require signatures for card payments on basket totals over a certain amount, say 50 dollars, due to compliance requirements. This may cease to exist altogether in the future (Egan, 2018). For now, retailers could consider completing a cost-benefit analysis on their policy to determine its effectiveness. For some retailers, the amount required for signatures might be increased, saving money on labor. Additionally, ensuring the signature pad is easy to access for the customer reduces time.
Managers are often required to consent on transactions involving WIC, high-theft items, special keys or cancellations. When cashiers call for managers, the queue halts, increasing wait times for customers. Similar to customer signature requirements, manager involvement policies are often set for compliance, become store habit and remain unchallenged. An analysis of their need, by transaction type, could reveal savings opportunities.
Marking bills policy
Retailers might consider which bill denominations require marking based on company strategy. Counterfeit bills are a reasonable fear for retailers; however, marking too many bills as compared to the risk causes waste. What is the estimated counterfeit percentage by denomination? Maybe the risk warrants the policy for some denominations and locations, but maybe it can be adjusted. After changes are applied, ensure you monitor the policy moving forward.
Items per minute (IPM)
Now, let us move onto another front end productivity topic. The metric items per minute (IPM) is one the most commonly used KPI’s in front end departments to measure productivity. Higher IPM equates to lower checkout time; the lower the checkout time, the more satisfied the customer will be. There are several recommended ways to increase your IPM.
Best method training (i.e., two-handed scanning)
Encouraging two-handed scanning by cashiers is pivotal. In an ideal scenario, items are processed by grasping with the leading hand, then transferring to the other hand to scan. During scanning, the lead hand returns to grasp a new item. The goal is to always be using two hands. Training employees on this methodology is key.
Visual cues (i.e., provide top PLU lookup sheets)
During item processing, cashiers code weighted items based on their Price Lookup, or PLU. Most cashiers, especially recent hires, will rely on using a database search option or paper reference to find the right PLU. To make this process more rapid, a retailer might implement a visual cue with the top 20 percent of PLU codes. This sheet could then be standardized and used across stores or tailored for stores with specific offerings.
Layout (i.e., design to reduce movement)
Changes in register layout often require capital expenditures. Nevertheless, a carefully planned change can have a huge impact on a metric like IPM and yield an attractive ROI. Consider fixture design factors that reduce cashier movement, such as customer unload registers or carrousel bagging workstations. [JG3] The best register layouts will optimize movement by reducing steps for cashiers to complete tasks.
Accountability (i.e., make metrics trackable for associates)
Accountability is necessary in change management. Only through effective training and monitoring can an improved IPM metric be sustained. Through visual feedback, cashiers can be made aware of their productivity by showing them their IPM. Retailers can even incentivize process improvements like two-handed scanning through compensation. Several considerations in this process are data tracking, management expectations, and cashier abilities.
Things to consider
When implementing programs to improve IPM, side effects may result if not anticipated by leadership. For instance, implementing incentives for increased IPM while neglecting other company values might result in reduced customer service. To combat such an issue, include parallel tracking of KPIs through surveys or mystery shopping. Communicate to employees which values take priority, and make these expectations realistic. By doing this, your program can improve KPIs while not conflicting with others.
Overall, tendering and IPM are only two major factors to consider in optimizing your front end work space. Additional factors that a retailer might consider are utilization and queuing studies, method analyses, task compliance and data tracking. Workforce optimization companies are producing powerful software tools to aid retailers in these processes, as they understand every dollar counts when reducing costs to increase profit margin. We hope this expose on front end productivity helped move you in that direction.
Egan, J. (2018, August 8). Mastercard, Discover, AmEx and Visa ditching signatures. Creditcards.com.
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