B&Q PLC

B&Q is Britain’s best known and largest chain of DIY outlets with over 360 stores. Horticulture is one of the key seasonal categories within their business and a major pull on customers, which leads to greater sales value with associated linked sales.

Workshop Objectives

B&Q’s main objective was to work with a key supplier, the value chain, B&Q’s Store Support and store staff to identify ways of reducing shrinkage throughout the whole supply chain.

Horticulture sales are very seasonal and extremely dependant on the weather. As such, it is important that the supply chain is able to react quickly to the ‘pull’ of customer demand. The quicker a supply chain can react, the greater the sales opportunities will be. Subsequently, shrinkage across the supply chain will also be reduced.

The horticulture suppliers prefer to have product continuously flowing through the supply chain, to free-up production space, so that they can grow more product and thus meet future supply requirements.

Shrinkage will also be reduced by introducing more ‘pull’ into the supply chain, rather than ‘push’.

Workshop Format

The workshop was hosted at the B&Q University, in-store and at the suppliers premises. It involved up to 20 people from across the supply chain, to ensure that all parts of the process were represented. It is not unusual for different parts of a supply chain to not understand what each other does. Inevitably, they do not appreciate the implications of their actions. In a large supply chain this is even more so.

Day one of the workshop covered the theory of Lean. The group played a game called ‘the Lego challenge’, which helped immensely in breaking the ice and got the whole supply chain working together on a common goal.

The next stages involved process mapping of the information and product flows through the supply chain, mapping all the activities and process times. The Group physically followed the supply chain from the Stores Support offices, to the supplier and finally through to the store, talking to key members of staff and getting their input into the daily problems.

The problems were prioritised in the context of causing shrinkage. Then, using a technique called ‘Rich Pictures’ a ‘Future State’ process was designed with the aim of eliminating the problems identified.

Finally an Action Plan was developed to move the supply chain from the ‘Current State’ to the ‘Future State’. Because of the size of the supply chain, this was a staged approach and the new process was trialled to prove the concept and to eliminate any problems before a wider roll-out.

A risk analysis was also carried out on the new process in order to identify these risks and finally a cost/benefit analysis was performed.

Benefits

The biggest benefit was getting the whole supply chain in a room together and having frank and open discussions on ways of improving the process. Displaying the process map and supporting documentation on the wall, showed a transparency that key individuals in the process had not seen before. There were several instances where activities were being carried out in the belief that the customer wanted them. When challenged, it became apparent that they added no value to the end customer at all. This allowed for simplification of the process.

Delays at all stages of the process were challenged and as a result a new process was identified that would reduce the lead-time by over 50%. It was anticipated that this would help reduce shrinkage by as much as 20% across the whole supply chain.

By providing the suppliers with information earlier, will allow them to be better prepared for when the orders came in, allowing them to dispatch the stock out within shorter lead-times.

It is inevitable that by improving the response time for the supply chain, stock levels will be reduced and turnover will increase. This leads to fresher products on the shelf leading to increased sales.

The cost involved in reducing these lead-times was not significant and mainly revolved around process simplification, with some cost required to upgrade the software used.

Neil Fedden comments: “The biggest benefit for me is the improved relationships between the key individuals within the supply chain and the dialogue that has now opened up. This to me is absolutely essential in difficult economic times, to enable shared benefit between customer and suppler and ultimately a stronger supply chain that is a ready for the up-turn.”