Gloria Johnson tested the fortitude of SEM software salesmen for years. In fact, she was a perennial source of frustration for a couple of them, the classic 'almost a customer' who teeters on the edge of a big sale as weeks turn into months and months turn into years.
Johnson is VP of store operational development at Burlington Coat Factory, and year after year, she revisited SEM as a potential project there. Year after year, she maintained her conviction that SEM could help the retailer tie up some of the frayed loose ends in its store compliance initiative, and year after year, she shared that enthusiasm with the SEM software vendors that called on her. But the project always seemed to fall victim to prioritization, trumped by more mission-critical initiatives. Then, in 2007, Bain Capital bought Burlington Coat Factory, and the vision for SEM there became reality.
The idea behind SEM software is to implement processes, controls, and records of compliance around corporate-to-store mandates. It's a concept that spans retail disciplines from merchandising to supply chain management to loss prevention.
Bain Capital drew on a lesson from the private equity acquisition textbook by focusing on Burlington Coat Factory's operational structure and therefore sought to make improvements that would facilitate growth. Getting a firm grip on store execution was central to its plan, a focus that was synergistic with Johnson's SEM vision.
Store-Level Task Management Mayhem
Operational processes have long been central to Johnson's 29-year tenure at Burlington Coat Factory. When she joined the company, it operated 5 stores; today, it spans 44 states with nearly 400. But for most of those years, Burlington Coat Factory struggled, as all retailers have, to manage compliance with and measure corporate mandates. "E-mail was the vehicle we used to disseminate task-oriented messaging in the recent past," she explains. "I had a support person, and her role was to get corporate-to-store directives to regional and district management and their staffs as they moved from one store to another, which happens at least 15 times per day," she says. Johnson recalls a time when a lack of e-mail system control resulted in store-level confusion. "There was a time when various levels of management could send out e-mails with directives to others in our organization, and those e-mails could include 'mandates' that weren't corporate directives at all," she laments.
In retail, poor compliance with — or mismanagement of — corporate directives is especially blatant in urgent situations like vendor recalls. The year 2007 certainly tested the mettle of U.S. retailers' ability to deal with recalls, and Burlington Coat Factory is far from insulated from recall threat. A significant portion of the retailer's transaction volume originates in its baby department, a hotbed for child safety-driven recall activity. Johnson says that at one time, recalls at Burlington Coat Factory could create problems in the back room and the back office. "In the event of a recall, the buying office would send out an e-mail telling stores that they need to pull merchandise, specified by vendor and style, from the floor," she explains. "But there was sometimes disconnect between that store-level directive and the instructions that our accounts payable group received regarding reverse logistics and reconciliation," she says. As a result, Johnson says recalled merchandise would sometimes pile up in stores' back rooms for indefinite amounts of time. In some cases, accounts payable would be disconnected from the process too and would therefore not know to hold funds back from the recalling vendor.
At headquarters, compliance with corporate directives — some as complicated as vendor recalls, some as simple as endcap sets — was difficult to determine. "Prior to having a system in place, it would have been hard to tell you our rate of compliance because it was cumbersome and challenging to gather the information, let alone calculate over a weeklong period how much got done on time and how much didn't," says Johnson.
Take Structure To The Stores
In an attempt to bring more structure and review to its task management process, Burlington Coat Factory began handling the scheduling and dissemination of tasks on the RetailAction Manager platform from Reflexis. Johnson oversaw the training of designated 'task creators' from each task-generating department (i.e. merchandising, loss prevention, maintenance, etc.), 'task approvers,' and executives who would be privy to reports generated by the system. "Even those who had never seen the system before were comfortable navigating in it within a matter of hours," says Johnson. Once task creators and approvers were trained, the retailer endeavored to gain control of unauthorized and disparate e-mail messaging taking place throughout the company. Access to e-mail had always been restricted to regional, district, and store managers via store-level passwords, but a system was developed to further control e-mail usage by filtering e-mail communication to stores. Johnson says that placing controls on e-mail usage has cut e-mail volume at her company by 90% to 95%. The decrease in message volume that has been achieved by restricting its use also allows for detailed review of the e-mail that is sent. "I manage a group of people who look at every e-mail that is directed to the store level from corporate management and field management," she explains. This review ensures there are no unauthorized directives being issued, and it adds a layer of quality control to the process. "We will not send a directive out if it's not accurate and complete," she says. "Further, anyone who wants to send an e-mail with action items out to the store level has to enter a project into RetailAction Manager. Those projects are reviewed in detail by my staff and only launched after all directives and attachments have been opened, reviewed, and approved." If a project entry is not complete or correct, Johnson's staff rejects it with notes explaining why. "Getting projects entered by Wednesday for the following week gives field managers plenty of lead time to know what they're up against," she says.
Johnson now oversees a four-person team that is responsible for maintaining and managing use of the software, which creates a calendar that looks a year and a half into the future. "We enter all of the known store-level tasks that we can anticipate, mostly around planned advertising events, promotions, clearance sales, and so on," she says. "If we know it's going to require labor at the store, it's plugged into the calendar." Then, the store workload feature of the software applies predefined time and labor parameters to the specific tasks entered into the calendar.
The system helps Johnson's team and the store-level managers better allot the time and labor necessary to achieve task goals and provides a snapshot of the time and labor that's left in various store-level departments for other tasks. "We receive project requests daily," Johnson says, "But unless there's an extenuating circumstance, we only launch projects each Wednesday. This gives field management an opportunity to rework their staffing if necessary, and it helps them prioritize their workload for the upcoming week." From the calendar generated by the RetailAction Manager workload feature, Johnson's department produces reports for regional VPs, regional managers, and district managers. These reports provide detailed information on all the stores and all the departments within those stores that have projects due that week.
Monitoring, Measurement: Keys To Task Compliance
Monitoring directives to stores helped Burlington Coat Factory improve the accuracy and consistency of the tasks it created, but the company still needed to close the loop by confirming compliance with the directives. RetailAction Manager assigns tracking titles to the tasks it manages, so when store associates complete tasks, they use those titles to report on their progress. Corporate management can search tasks by title and pull real-time, graphical reports indicating percent completion. Managers can click on the graphics representing incomplete projects and drill down on the stores that have not completed the tasks. "This reporting tool helps us to hold stores and the individuals who run them accountable," Johnson says. "It also produces reports on where stores rank within the company in terms of average rates of compliance."
In the early stages of the implementation, these reports were showing task compliance levels exceeding 90% following the RetailAction Manager rollout. Intrigued by this figure, some of Johnson's more skeptical colleagues questioned whether store-level associates were simply closing out tasks without actually completing them. That's where RetailAction StoreWalk and Audit, the second parts of Burlington Coat Factory's engagement with Reflexis, come in.
"StoreWalk and Audit are controls to ensure the physical plant is to standard per our guidelines," explains Johnson. "For instance, our process around vendor recalls now requires an RMA [return merchandise authorization] number from the vendor and an address to send the recalled merchandise back to, or an order to destroy it, rather than letting it clog up the back room," explains Johnson. "That information is disseminated via RetailAction Manager, and compliance is monitored by RetailAction StoreWalk." Prior to this, assuring compliance amounted to manually prepared reports that were sent through e-mail and logged into a spreadsheet. "Now, managers can perform walks of their stores to verify compliance with tasks, and they can key the results directly into the SEM program," says Johnson. To that end, Burlington Coat Factory recently deployed mobile computing devices to district, and regional management, enabling them to report back in real time as they're walking the floor. "This application was the driver for investing in mobile computing hardware, but there are certainly some other applications that we'll deploy via such devices. For now, being able to view the directives and ensure their execution at the store level is most empowering," says Johnson. "And, as a company, we are at 94% compliance with projects that go through the system."
At Burlington Coat Factory, it's ultimately the responsibility of the store manager to oversee the completion of tasks and the district manager to ensure the completion of projects. "We have had instances where projects were really not being completed as the store managers were indicating, and in at least one case, a store manager that had committed multiple infractions was reprimanded as a result," says Johnson.
The payback for enhancing investment in store-level task compliance is obvious, albeit difficult to measure. Back end efficiency gains aside, the consistency of merchandise presentation attributable to better compliance creates invaluable return in terms of brand management and the store-level customer experience at Burlington Coat Factory.