Cost Takeout in 2021 and Beyond

BCI has for many years utilized cost takeout best practices. You may remember that $15 minimum wage Federal mandate issue earlier this year. This has since gone by the wayside and the law of supply and demand in the labor market has driven wages well past the $15 threshold. Unfortunately, it doesn’t appear to be slowing anytime soon.

Is your organization currently tackling issues such as the following?

  • Product availability issues
  • Fluctuating supplier service levels
  • The need to optimize product assortment and space planning based on a data-driven approach
  • The need to increase product costs and maintain pricing to prevent margin erosion
  • Inflation and its impact on stale key performance metrics
  • Lack of interested candidates to fill part-time, full-time and management positions
  • Stores run with less-than-optimal staffing levels that impact customer service and create excessive overtime
  • Employee turnover and call-offs
  • The need to determine the root causes of turnover by the various age groups

Cost takeout can be approached in a variety of ways

It is important to take a step back and look at opportunities to revise your current operating model. There are a variety of approaches to consider:

  1. Review your current operating processes determine what changes can be made to run your business with less hours (without impacting customer service)
  2. Look for tasks that are transparent to your customers that can be streamlined or eliminated
  3. Look for opportunities for automation (self-checkouts and automation of store-level production planning)
  4. Investigate centralized production (commissary or 3rd parties) to reduce required hours and store level staffing
  5. Review your HR processes to attract, hire, on-board and retain key team members

How our diagnostic can help you with cost takeout

Our team has helped countless retailers identify process improvement opportunities to drive efficiencies and reduce operating costs. In addition, our diagnostic utilizes interviews, observations, and data analytics to quantify and qualify potential benefits and the level of effort required to implement.

What our diagnostic is not:

  • A “cookie cutter” approach that uses recommendations from past projects
  • We understand our clients have a unique business model and brand image that requires informed recommendations

What it provides for your company:

  • An outside perspective on process improvement opportunities to increase store level productivity and efficiency (without impacting customer service)
  • Determines both quantitative and qualitative potential benefits
  • Categorizes recommendations as quick-hit, mid-range and long-term

Contact us to set up a discussion to determine if our diagnostic can provide value to your organization.