CASE STUDY - SAINSBURY'S

Unrivaled Reliability: The RGIS Difference
SUMMARY
Sainsbury’s, one of the largest food retailers in the United Kingdom, struggled with two significant inventory issues:
  • Absence of a reliable system for counting product inventory
  • Sub-optimal availability of products on store shelves

After agreeing to partner with RGIS for its inventory management needs eighteen months ago, Sainsbury’s experienced dramatic improvements in both the accuracy of its data collection and its product availability. Consequently, Sainsbury’s has experienced increased profitability.


PROBLEM
Context
After operating without a third-party inventory provider for ten years, Sainsbury’s retailers lacked a sound process for ensuring that accurate counts of products were recorded. The absence of a reliable system prevented Sainsbury’s from accurately measuring its inventory, thereby limiting their ability to control product shrinkage. This, in turn, led to lower earnings. Also present was the reluctance by store personnel to change store procedures and accept responsibility for accurate store reporting.

Objectives
Increased accuracy in stock reporting, and added efficiency in moving store product from stock to shelf for increased availability, was considered by Sainsbury’s senior management to be paramount to the success of Sainsbury’s stores. Without the necessary capabilities in-house, Sainsbury looked to RGIS for solutions.


SOLUTION
The RGIS Process

The key to RGIS’ success is the ability to understand its client’s core business. In drawing upon knowledge of Sainsbury’s operational strengths and weaknesses, RGIS created a customized system comprised of not only the actual inventory procedures, but pre-inventory and post-inventory procedures as well.

Pre-Inventory
  • RGIS personnel analyzed stock room and sales floor facilities
  • Store-level staff was educated in stock positioning and data management methods
  • A Strategic plan for capturing all product data was developed

Inventory

  • RGIS personnel performed store product counts
  • A strategic plan developed during the pre-inventory stage and was executed
  • Product reports were generated in real time using proprietary hardware and software

Post-Inventory

  • Product reports were analyzed in cooperation with the client
  • Recommendations for reducing product shrinkage and increasing in-store product availability were presented to client


SOLVING SAINSBURY’S PROBLEM
In the 18 months since beginning its partnership with RGIS, Sainsbury’s has achieved the following:
  • Acquired real-time reports of inventory shrinkage rates broken down by store, department, and product
  • Ranked #1 consistently in The Grocer Magazine for “Best Product Availability”
  • Accounted for $1.7 billion in stock over the course of 1,300 inventory audits
  • Informed all Sainsbury employees that the company is highly committed to loss prevention
  • Increased its overall ‘product-to-shelf’ rate
  • Customized specific loss-prevention procedures based on actual store-level data
  • Established new benchmarks for their retail business
  • Increased profitability through less shrinkage and heightened sales

In applying its system to Sainsbury’s retailers in the United Kingdom, RGIS exhibited a passion for understanding its client’s operational challenges. RGIS also revealed a resolution to assimilate into the Sainsbury’s culture, to understand how its people think at the regional level, tailoring its management style to complement the strengths of Sainsbury’s workforce. Moreover, Sainsbury’s applauded the management skills of RGIS personnel for implementing new store software that simplifies data collection and streamlines post-inventory reporting. “A problem shared is a problem halved,” noted (Inventory Count Operations Manager) James Pitt, calling RGIS a “one-stop” solution to Sainsbury’s problems with inventory counting and product availability. Talks are currently underway to extend the RGIS - Sainsbury inventory partnership and to collectively explore additional areas of business, such as merchandising and staffing solution services.