Applying the Disciplines to a Nike Factory Store

6 Sigma:

Applying the Disciplines to a Nike Factory Store

Step Present Situation Applying 6 Sigma Principles

1) Defining the Problem As a member of the sales staff at the Nike Factory Store in Johnson Creek, Wisconsin, one of my main responsibilities is to cut down on the amount of shrink that occurs during the month. At times we, as a staff, are given conflicting messages about either giving outstanding and proactive customer service, or keeping our attention focused on suspicious characters or actions. This presents a problem for members of the staff, and does not allow us to fully service the paying customers. The heart of the problem here is the inability of the staff to commit fully to either helping customers, or watching potential shoplifters. The store is presently being considered for the installation of theft deterrent devices. This would allow the staff to worry only about helping customers, and not about tracking down missing items.

2) Measure At least once a year, an inventory is taken of the products on hand, in the system, and missing. This process is done by hand and allows for a margin of error of about 1 in every hundred items counted. This would be operating at one of the lowest Sigma levels, and costing the store a great deal. Shrink is kept track of on a manual level by filling out paperwork each time an item is known to have been taken. This number is held against the monthly sales to get an overall shrink percentage. Eliminating the higher percentage of shrink would consist of possibly adding more sales staff to lessen the opportunity for possible theft, as well as improve customer service. Applying the principles of 6 Sigma would allow the store to lose less than one percent of product. Changes over the past year have dropped shrink from around .1 percent down to .005 percent. Management has taken steps to correct the problem, without the knowledge of 6 Sigma.

Step Present Situation Applying 6 Sigma Principles

3) Analyze One of the more prominent issues regarding theft levels is the level of commitment by the sales associates. Many of the employees at Nike are either young college students or high school students that are just there to collect a check. The part-time employees have no real incentive to take their job seriously. While an overall wage increase may not be feasible, it could possibly provide a better pool of candidates of whom to start with. Along with a possible wage increase, making the processes easier and defining roles for how theft issues should be handled would not only make the staff more willing, but would make the process in general more efficient.

4) Improve The level of training that one receives is adequate, but only relative to the level of commitment most employees have. The current process of logging stolen items by hand does not make much sense if they can