A model for store handling : potential for efficiency improvement

Abstract

In retail stores, handling of products typically forms the largest share of the operational costs. The handling activities are mainly the stacking of the products on the shelves. While the impact of these costs on the profitability of a store is substantial, there are no models available of the different drivers influencing store handling. In this paper, a study of the shelf stacking process is presented. First, a conceptual model based on warehouse operations is derived. It is shown that handling costs are non-linear with the number of consumer units stacked. Secondly, by means of a motion and time study, data has been collected in four grocery stores of two different European retail companies. The model clearly demonstrates the impact of the most important drivers for handling efficiency: case pack size, number of case packs stacked simultaneously, and the stacking regime. Efficiency gains of 8-49% by changing the driver parameter value are identified. Based on the presented insights both retail companies have decided to structurally change their current operations