Simplify Workflow:

PROCESS REDESIGN(REtaIl)

Enabling Enterprise

1

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What is

PROCESS REDESIGN?

Process redesign refers to changing or simplifying the steps in the key processes to remove wasteful activities that do not add value to customers, and focus on improving activities that do.

An example is given here, where process redesign has reduced a 4-step process to a 2-step process.

Step 1

Step 1

Process Redesign

Step 2

Step 2

Step 3

Step 3

Step 4

Step 4

2 3

Why should I use

PROCESS REDESIGN?

Reduce

Mistakes by employees

and suppliers

Waste

Increase

Costs

Employee morale

Efficiency Revenue

hOW do I use

PROCESS REDESIGN?

Simplify workflow with process redesign.

Process redesign begins with the management. Communicate the benefits of process redesign to all employees and demonstrate top management’s commitment to it.

Identify processes to improve and use the 4-step approach to simplify each process. This approach is illustrated below, with examples included under each step.

STEP 1list the steps in the current process1

Sort inventory Return or discard expired/spoilt

products

Identify inventory

sold

2 31

Look for the right supplier

5Decide products

to be ordered

4Place order

6

Display products

Receive and inspect

products

7 8

I have 8 steps in one of the key processes in my retail shop.

4 5

STEP 2look out for the different types of waste and find out the causes of the waste in each step

2

Work with the employees involved in each step to identify the wastes.

Use the Fish Bone Diagram and the 5 Whys to find out the causes of each waste.These are illustrated below:

Determine the wastes in each step

On the diagonal lines , write the direct causes of the waste. For example, if there are 3 direct causes to the waste, there should be 3 diagonal lines.

On the short horizontal lines , write the factors (indirect causes) that result in the direct causes of the waste.

a

B

a Direct Cause

B Indirect Cause

There is a recent change of supplier

Job roles are not assigned

Employees are not aware of the defects

Supplier has provided

a batch of defective products

Employees do not perform

quality checks

Employees do not highlight

the defects

Waste:Defects

Employees are complacent and negligent

Fish Bone Diagram

5 Whys

Write down the waste and ask “why” five times to identify the causes.

Example:

Waste: Overprocessing

Generally, by the fifth “why”, the company should be able to get to the real root cause of the waste.

Why? Employees are not clear of the specifications.

Why? There is no communication or training provided to employees.

Why? There are no standard operating procedures (SOPs).

Why? Company is not aware of the importance of SOPs.

Why? There is no benchmarking or survey done to assess current performance.

Waste• Inventory - Messy and disorganised inventory• Movement - Unnecessary movements needed to reach the product

Causes• No proper labelling and allocation of inventory storage space• Disorganised inventory, restricting movement

Step 1:Sort

inventory

Waste• Defects - Effort and raw materials wasted in sorting defective

products - Money spent on non value-added activities such as

discarding defects• Waiting - Time wasted for rework or sorting of defective products• Inventory - Storage space occupied by defects that could be put to

better use

Causes• No quality checks on products• No SOPs• Customer specifications not communicated clearly

Step 2:Return or discard

expired/spoilt products

Waste• Underutilised manpower - Inefficient manual counting process that is error-prone - Easily misplaced written records - Difficulty in performing analysis• Waiting - Time wasted during manual counting

Causes• Unaware of availability of software for tracking purposes• Not enough knowledge of how to use technology to

improve the step

Step 3:Identify

inventory sold

HAMMERSPaNNER

6 7

Waste• Underutilised manpower - Inefficient manual process of tabulating products• Waiting - Time wasted during manual process of tabulating• Inventory - Storage space occupied due to ordering of too much stock

Causes• Unaware of availability of software for tracking purposes• Not enough knowledge of how to use technology to

improve the step

Step 4:Decide

products to be ordered

Waste• Underutilised manpower - Inefficient manual process of searching namecards for

contact information• Waiting - Time wasted during manual process of searching• Over-processing - Objective cannot be easily achieved in a simple step

Causes• Unaware of availability of software for tracking purposes• Not enough knowledge of how to use technology to

improve the step

Step 5:look for the

right supplier

Waste• Underutilised manpower - Effort wasted on periodic checks with supplier on

delivery status• Waiting - Time wasted calling supplier - Non real-time update from supplier• Over-processing - Repeated calls made to get update of status

Causes• Unaware of availability of software for tracking purposes• Not enough knowledge of how to use technology to

improve the step

Step 6:Place order

Waste• Defects - Effort and raw materials wasted in sorting defective products - Money spent on non value-added activities such as

discarding defects and providing feedback to supplier• Waiting - Time wasted reordering another product - Time wasted during delivery of product• Inventory - Storage space that could be put to better use while

waiting for supplier to collect or exchange product

Causes• No records of past defects for tracking purposes• No SOPs for checking and handling defects

Step 7:Receive

and inspect products

Waste• Underutilised manpower - Effort needed to sort products for display - Effort needed to reprint and replace price tags with

price changes• Waiting - Delay in accurate pricing• Inventory - Storage space taken up during process of displaying

products

Causes• Unaware of availability of software for tracking purposes• Not enough knowledge of how to use technology to

improve the step• Lack of housekeeping knowledge

Step 8:Display

products

8 9

STEP 3Redesign the process3

Evaluate if the change is worth making by measuring the total current and future benefits of the change against the total current and future costs of the change.

If the total current and future benefits exceed the total current and future costs, implement the change.

Redesign the process by combining sequential steps that have the same causes.

For any change that is considered, ask the following questions:

• What is the change?

• Who is involved in the change?

• How can the change be made?

• What are the costs of the change?

• Who bears the costs of the change?

• What are the benefits of the change?

• How can the benefits of the change be shared?

• Do the benefits outweigh the costs of the change?

Current + Future Benefits

Current + Future Costs

a

B

a

B

ChangE!

I want to redesign my current process by combining steps to reduce waste.

Waste• Inventory• Movement

Process Redesign• Label inventory storage space with markings indicating

space allocated for different types of inventory• Arrange inventory that is depleted quickly in more

accessible places• Place heavy objects closer to the floor

Step 1:Sort

inventory

HAMMERSPaNNER

Waste• Defects• Waiting• Inventory

Process Redesign• Analyse past sales to better understand customer

demand and know how many items to order from supplier

• Improve storage/display of products to minimise defects caused by mishandling

Step 2:Return or discard

expired/spoilt products

Waste• Inventory• Over-processing• Underutilised manpower• Waiting

Process Redesign• Use an integrated Point of Sales (POS) system that: - Records products sold - Automatically updates stock list - Performs customer demand forecast based on past sales - Places order with supplier when inventory is low

relative to sales forecast

Step 3 -6:Integrated

Point-of-Sales

10 11

Waste• Waiting• Defects• Inventory

Process Redesign• Put more effort in inspecting products that have been

recorded to have defects• Call the supplier to demand better quality management

and advise the supplier to engage productivity consultants if products are frequently defective or if deliveries are often late

Step 7:Receive

and inspect products

Waste• Underutilised manpower• Waiting• Inventory

Process Redesign• Heavier products should be arranged on the lower

sections of the shelves• Use electronic LED price and product labels to change

the price and name of products easily• Put products of the same category together so that

customers know where to find them• Organise products properly to reduce time spent

deciding where to display them• Display small, cheap and attractive products at the

cashier to increase sales• Use adjustable shelves to accommodate sizes of

different products

Step 8:Display

products

Talk to employees about the change you are going

to implement

Make one small change at a time

Celebrate successes along the way to improve

employees’ morale

Encourage employees to look for further

improvement in their individual areas and

give feedback

Reward good ideas and efforts in improving

productivity

STEP 4Implement the change4

12

After implementing process redesign, I have combined steps 3 to 6 into just 1 step and reduced wastes in the other 4 steps.

Sort inventory

1

Receive and inspect products

7

Display products

8

Return or discard expired/spoilt products

2

Integrated Point-of-Sales

3 6-

You can access the Process Redesign (Retail) tool online at

www.waytogo.sg or approach advisors for assistance at any of the

SME Centres.

SME Centre@ASMEAssociation of Small and Medium EnterprisesT: 6513 0388E: enquiries@smecentre-asme.sgW: www.smecentre-asme.sg

SME Centre@SCCCISingapore Chinese Chamber of Commerce and Industry T: 6337 8381 E: enquiry@smecentre-sccci.sgW: www.smecentre-sccci.sg

SME Centre@SICCISingapore Indian Chamber of Commerce and IndustryT: 6508 0147E: sme@smecentre-sicci.sgW: www.smecentre-sicci.sg

SME Centre@SMCCISingapore Malay Chamber of Commerce and IndustryT: 6293 3822E: gadvisory@smecentre-smcci.sgW: www.smecentre-smcci.sg

SME Centre@SMFSingapore Manufacturing FederationT: 6826 3020E: query@smecentre-smf.sgW: www.smecentre-smf.sg

WhERE can I get

hElP?

SPRING Singapore1 Fusionopolis Walk, #01-02 South Tower, Solaris, Singapore 138628

Tel: 6278 6666 Fax: 6278 6667www.spring.gov.sg