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​The Cost of Parts NOT being SIMPLE Part I: From the Supermarkets Perspective

​The Cost of Parts NOT being SIMPLE Part I: From the Supermarkets Perspective

Apr 9th 2019

A store associate calls in a service ticket for a failed freezer door gasket. Or broken glass freezer door. Or a failed dairy, meat, deli, or produce shelf. Now what?

The Food Marketing Institute states the average net profit after taxes for the supermarket industry is only 1.1%. Thus, for every $1 earned by the store, only 1.1¢ is generated in profit. As an example, the average net income of the S&P 500 in 2018 was > 8%.

So, how do needed replacement parts affect or matter to the above? Things break. Stuff happens. It’s all part of doing business, right? The below real example is more the rule versus the exception. Ask any store director, district manager, or owner.

December 31, 2018. New Year’s Eve. A high volume retailer has some rowdies come into the store and break three doors in a dairy case.

The store manager calls for service the following day. The damaged doors are a major manufacturer of refrigerated glass-doors known for innovation & quality. However, often, they are not known for their responsiveness.

1-month later, the doors are replaced. The shattered doors came from a 5-door case. The case had the openings for the broken doors covered the entire time with no product being sold in them. The balance of the case was still operating and running as it was not feasible to secure and isolate the case--let alone not sell ANY products from the case.

How many sales did the store lose? How much confidence was lost from customers during the time the doors were out of commission? How long does it take those customers to come back?

Secondarily, how much time, energy, labor, and money was lost just trying to acquire the doors? Confirming the part needed? Getting a quote? Confirming a lead time? Tracking the shipment? The ANSWER: Approximately 7¢ on every dollar made at the store. Every extended wasteful action contributes to these losses,

What if parts were simple? What if ordering the part could be done online with all follow-up actions automatic and electronic? What if the door could be replaced in 10 days or less? How much of that 7¢ can we claw back? You tell us. SimplySourceful is here for you. We help you be the best you can be.

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