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Improving Convenience Store Efficiency? Building a management structure: supported by a 52-week MD business system

Wen/LinBeastShan Tiankun

In the future-oriented business model and strategy after the landing, in the diagnostic analysis, to solve the gaps in the completion of the organizational reform, the convenience store operation system to build the most important stage - the management structure to shape. Business models different make the management structure is also very different, the Internet business around the number of users and growth rate of valuation, whether or not it is a loss is not a measure of the index, the management structure is also designed around this core.

The traditional retail business model is based on platform purchasing and merchandising, and the management structure emphasizes channel construction and neglects merchandise development. The manufacturing retail business model is a synergistic operation of manufacturing and merchandising, where the development of original merchandise is strategically oriented, and the management structure is centered on the development of original merchandise in collaboration with suppliers.

Convenience Store Systematic Organizational Reform: Guided by Response to Change, the Cornerstone of Manufacturing Retail Transformation Convenience Store Organizational Reform, its extended organizational structure and management structure are not the same thing.

Organizational structure can be adjusted at any time, but the management structure is stable, unless there is a major business transformation, usually does not change with the changes in organizational functions, departments and personnel. Convenience store management structure centered on merchandise operations, with original product development as the strategy, is the long-term operation of the operating system constantly figured out , and this structure is also the sample of most manufacturing retail, in addition to 7-ELEVEn, and Uniqlo and H&M, etc..

The convenience store management structure for manufacturing retailers is designed around 3 aspects: merchandise management, supply chain management, and operations management.

In the traditional retail era, convenience store merchandise departments did not develop original merchandise themselves, or even have a concept or awareness. What kind of goods retailers introduce, almost all recommended by the brand and suppliers, the so-called procurement negotiations are basically in accordance with the rhythm of the first two to promote, at this time to the platform-based retail model is dominant.

Manufacturing-type retail merchandise business structure is not the logic of purchasing or buyers, but standing in the customer's position from the daily life of mining their potential needs, and then go to do merchandising planning, and then a series of actions such as merchandise development, and ultimately, through the assumptions of the store - validation to confirm the value of the new merchandise, which determines the management of the Ministry of Commodity structure.

The entire lifecycle from merchandise development, marketing and promotion, and merchandise obsolescence needs to be managed, and due to the chaining of convenience stores in different regions, the merchandise department also has to set up MD merchandise development specialists for each region.

In this cycle of correction, the team MD has been receiving feedback from the stores, and each product planning decision is being optimized and analyzed, so that the merchandise planning team gradually has the ability of accurate merchandise planning. The management structure of the merchandise department mainly consists of 5 links:

In addition to manufacturing retail, the management structure of other retail models generally only do the 3rd step, and there is no establishment of the assumption-verification, so it is difficult to get the problems and gaps of the goods in the process of commodity development, and ultimately can not achieve the effective development of the original merchandise, the essence of which is that it is impossible to create a differentiated competitiveness.

Supply chain management in the chain of convenience stores in the commodity department, its procurement, production, warehousing and logistics are commodity department of the second level of the department, the supply chain management structure has been included in the structure of the commodity management, singled out to illustrate the supply chain management is very important. However, to do a good job of supply chain management, it must be effective collaboration with the commodity department and operations department.

JIT supply chain is born out of Toyota's JIT just-in-time production method, the meaning of this is summarized in one sentence is "only when needed, according to the amount of need to produce the required products," is the pursuit of a non-inventory, or inventory to reach the minimum of the production system, the JIT just-in-time production method and the PDCA cycle had created Toyota's precision production method and the PDCA cycle. JIT just-in-time production and the PDCA cycle have created the lean manufacturing of Toyota Motor.

JIT just-in-time supply chain used in the convenience store is just right, is 52 weeks of collaborative merchandise supply plan for the store as a starting point, to the end for the beginning of the consumer demand from the beginning of the construction of the supply chain to connect, emphasizing the linkage between the customer demand chain and the supply chain. The previous article The Model Basis for Convenience Store Transformation: Starting with the Store, Letting Those Who Understand Demand Lead the Merchandise Operation explains this.

Convenience stores are not as seasonal as the apparel industry, but the frequency of new product development, production, shelves and iteration is much higher than in the apparel industry. In fact, whether it is electronic products, smart home appliances, snacks and fresh food, or consumer goods life cycle shortening reasons, but also because of the Internet's explosion of information leading to low cost of access to information and the short time limit, customer consumption perception is constantly changing the new and tired of the old has become the norm, making production, channels and retailers to work together to improve the quality of service. The fact that this is the norm makes production, channels and retailers constantly innovate to increase the frequency of product development.

Manufacturing-based retail convenience stores start from the store and from the future, can maximize the foreseeable future demand, to establish the assumptions of the customer's future consumer demand, the inverse of the current convenience store should do the work, and thus find the gap between the future assumptions and the reality, so as to find and solve the current problem.

For example, the Ministry of Commodities developed a new commodity December 1 to be on the shelves of 100 stores in Beijing, stores to allow time to adjust the display and vacant shelves, new commodities to reach the logistics center of the supply chain, the logistics center distribution to the store, the previous new commodity orders, promotional programs, and then forward to the new commodity production and raw material preparation, etc., are interlocked, only to do a good job! The plan is to push back from the demand side of the store to work on the task, in order to effectively avoid problems and solve them.

In addition, whether it is 7-ELEVEn's vertically integrated platform model, or other manufacturing retail self-built factories and logistics heavy asset model, JIT instant supply chain management architecture can be used, but 7-ELEVEn's model is clearly more competitive, its not investing in the value chain, but the whole value chain can do efficient collaboration. The process is primarily about effectively integrating the various segments into a single benefit***similarity.

Hypothesis-verification can also be used in the JIT just-in-time supply chain to find out why tasks are not being completed, and to continually improve the efficiency of the supply chain in a continuous cycle of hypothesis-verification.

The operations department is responsible for the implementation of sales and landing, and supervise the store's operating ability, responsible for two-way communication between the store and headquarters. Chain convenience store brand general 6-8 stores arranged a regional operations supervisor. This supervisor is not to check the health, discipline and risk control, its role is more like a consultant, diagnose the store problems to help improve the operating capacity.

From the point of view of the ability and effectiveness, the operations supervisor is the best by the first line of store experience to play, the store manager from the best, so more effective to find out where the store problems so as to improve. Convenience store headquarters, although there are stores to promote cadres, but because of the long time not in the first line of store work, often to the headquarters of the light stores of the misunderstanding, resulting in the inability to grasp the problem and customer demand, the ability to improve the store is not beneficial.

The reason why many chains fail, most of the problems are out of the franchise can not do effective control, or can not help the franchise to enhance the ability to lead to the supply chain empowerment and management of the value of the missing. A capable operations supervisor is critical to the development of the chain and brand maintenance, and although it sometimes feels like the supervisor is a bit bloated and there is a suspicion that retail efficiency is being compromised, from the nature of management, an operations supervisor is necessary.

Video conferencing and other communication methods are not as direct as face-to-face communication, not only to ensure that the information transfer will not be loss, but also to be able to truly feedback on the store's operating problems, in fact, this is the essence of the value of the store as a starting point for the management of the single product, assumptions - validation have a very good promotion.

Convenience stores in manufacturing retail do not exclude big data and AI, though over-reliance on them often results in store personnel playing an executive role, doing only stocking, displaying, selling, and cashiering actions. Imagine a huge chain system, the biggest base is the store, but these stores can not take the initiative to create demand for the future, not only a waste of resources or even in the weakening of the ability of the store.

If you can do to strengthen the ability of the store staff commodity operation, and then with the help of intelligent big data and other IT systems, not only can be more efficient, but also can fill the artificial intelligence because of the learning needs of the cycle, and can not go through the single product management accurate ordering short board, and ultimately realize the operation of a more efficient. This stage operation supervision can guarantee the quality and effectiveness of operation, in short, to activate human creativity.

52 weeks MD business system supports the operation of the entire convenience store system, MD team, JIT instant supply chain and supervision of the operation of the three constitute the most important management structure, in essence, is the merchandise, supply chain and operation of the trinity of the synergy.

In the era of data-driven operations, retailers often overlook the importance of management. The management structure is based on the business architecture, and the organizational structure is built on top of the management structure, but the organizational structure is not directly related to the business system. The business architecture will allow the management of the convenience store system to fall into a misunderstanding, as if the business operation is more important than management, forming the design of the organizational structure heavy business and light management.

Management and business are not contradictory and complementary, management to do a good job of business services, business to comply with the management system, not so the management structure of the three aspects can not be realized, and even more can not complete the strategic objectives of the manufacturing retail convenience store.

The purpose of the design of the management structure is to find the best and most effective management from the business operations, and establish the corresponding organizational structure, the formation of business rather than human job settings.

Finally, convenience stores, like most chain entities, need to refine their operations and accomplish their goals through long cycles, which is indeed a dime-picking business. In addition to the business model and strategic positioning and business ability to pull, to continue to the good development, only good management structure support can be better realized. Therefore operators can not only focus on the index numbers, to be more careful in the management, in fact, gross profit and loss are from the management.

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