Enhanced Ordering Systems and Consolidated Processes Ensure Sustainable Revenue Growth
One of the world’s largest retailer-owned cooperatives was confronted with eroding sales to its member stores. Members complained that cumbersome processes and antiquated systems made the ordering process highly unpredictable, from identifying products to taking final delivery. The problem had escalated to the point that many members stockpiled inventory (when they could get it) or purchased more easily accessible products from the cooperative’s competitors. This often resulted in lost share of consumers’ wallets to better-managed retailers.
Multiple ordering processes not only caused confusion and frustration, but were costly for the cooperative to maintain and support for nearly 6,000 members. To combat these inefficiencies and to reinforce its commitment to its member stores, the cooperative launched an initiative to simplify and consolidate its ordering processes, enhance the ordering system, and make it easier for members to manage orders.
Management realized it would not be an easy undertaking. Tackling this initiative would impact retail growth, merchandising operations, and all parts of the supply chain, including order entry, fulfillment, replenishment, shipping, delivery, inventory, and claims (returns). For this initiative to be successful in the midst of massive change there could be no disruption to daily operations, a decrease in sales, or a decrease in customer satisfaction.
The cooperative turned to Integrated Project Management Company, Inc. (IPM) to coordinate the planning, development, and implementation of an optimized ordering process.
To create win-win results for the cooperative and its members, IPM broke the initiative down into three phases.
The first phase involved analyzing and mapping all ordering processes and their frequency of use. Through this exercise, IPM was able to determine that 65% of members were currently using one of three ordering systems. It was agreed that these systems would provide the three standard platforms from which members could choose. Using the process maps, IPM worked with the internal team to create an optimal ordering process. This defined the requirements for third-party programmers to start planning and prototyping necessary system changes.
The second phase involved surveying the members to determine what features would serve them best. Not surprisingly, they wanted “the basics” that the current systems lacked, such as providing order confirmations, shipment dates, and payment terms, as well as the ability to sort product selection by price. Other requests included receiving reminders on deadlines for “special” orders and advance notice on upcoming promotions. These enhancements would give members the tools they needed to make educated purchase decisions, which would enable them to boost sales and better control their profit margins.
Despite the cooperative’s desire to move ahead quickly with the implementation phase, capturing the voice of the members ensured their buy-in and helped the team understand which features provided the most value to users.
This phase concluded with a pilot test of the new ordering
process with some seasonal products that enabled the team to get real-time member feedback and fine-tune problem areas.
The final phase involved implementing the new systems nationwide, which was integral to success, as well as developing a communication and training program.
The cooperative created a significant marketing campaign to explain, sell, and train employees and members on the new ordering system. The campaign included prepared speeches given by the CEO, monthly flyers sent to members on new system features, articles in the company’s monthly magazine, and hands-on demonstrations at the cooperative’s spring and fall members’ conventions.
IPM led the effort to roll out the new systems in tandem with the marketing campaign. By issuing the most urgently needed features as soon as they were complete, members experienced some “quick wins,” which were conveyed via campaign communications and helped promote adoption of the new system across member stores.
IPM successfully facilitated transitioning all targeted cooperative members from using multiple ordering processes to a new, efficient ordering process. Members also reduced IT support costs and storage costs due to reliable inventory and merchandise availability.
The cooperative and its members are now positioned for revenue growth. Other key results delivered through IPM’s leadership include:
- 90% of the cooperative’s members have successfully implemented the new ordering system.
- Members now receive products within the seven-day window they specify upon ordering.
- Cross-functional collaborations are enhanced because departmental silos were broken down. Management continues having discussions with their teams to support continued collaborations.
- Overall, member satisfaction has increased, as told through testimonials.