May 31, 2017

The Continuous Improvement Cycle for Fuel Forecourt and Convenience Retail Success

7 Elements, Competitive Advantage, BI, Facilities, 2017

by Anila Siraj, VP Kalibrate Strategy Group

The continuous improvement cycle is about more than just constant development. Continuous improvement is a detailed and exacting process with a momentum entirely dependent on executing with best practices top of mind. Though it can be applicable across many business types and objectives, we'll focus here on its value in forecourt and convenience retail success.

How Does it Work? A Breakdown

The first step in a successful continuous improvement cycle is to benchmark current status — identify what you're doing right and understand where there may be gaps in your overall performance. There is a difference between benchmarking your past successes and "benchmarking" overall performance. Even with the best BI tool on the market, you won't be able to accurately benchmark without the right data, or without taking a big picture view. Consider where you benchmark against yourself, other retailers and other competing brands — as a whole. If you are looking to improve in a given market, look at how your brand performs in one market vs. another. If your objective is to understand the performance of the sites in a given network, consider benchmarking against other networks. Whatever your objective, start by backing way, way up and looking at the whole, not the details — yet.

Once you've assessed where you are and where there may be gaps in performance, then you can drill down into what is creating those gaps and what needs to be done to bridge them. This is the strategizing part of the process and where you can begin to incorporate the 7 Elements of Fuel and Convenience Retail Success. Use the 7 Elements to guide macro and micro benchmarking and simulate potential improvements. Where do you benchmark against yourself and against your top competitor on merchandising? On facilities? On operations? What changes can you make that will provide the highest return? You may choose to just drill into one element, specifically, in order to keep the continuous improvement cycle focused. However, bear in mind that all of the elements interact and affect one another in varied ways.

Next, forecast what your performance will be when the gaps you've identified are bridged. This starts by creating specific goals for your action plan. Let's say you have identified a clear gap in your site operations that is impacting your overall performance. Do you want to reach a certain level of operational efficiency to bridge that gap? What steps need to be taken and by when? Outline your goals clearly. An excellent BI tool will include predictive modeling to help you forecast, and that forecasting is critical to creating reasonable goals and expectations for ROI. There are often times millions of dollars at stake to make some of the capital improvements you identify as gaps. Continuous improvement simply doesn't function without a reliable forecast and a resulting goal.

You are now ready to implement the changes you believe will help bridge the gaps you've identified, driving to your goal. Then, to "complete" the cycle (which is inherently never complete), continuously monitor and analyze your performance, creating new benchmarks, new goals and new implementations as you forge ahead.

To review, the continuous improvement cycle for fuel forecourt success involves the following five steps (with some overlap, chronologically):

1. Benchmark
2. Strategize
3. Forecast
4. Implement
5. Monitor/Analyze

Who is Involved?

From top-level executives to site managers, everyone is involved in maintaining brand and organization success. If an executive makes a change and wants to distribute a message, it's important that site managers understand that message and espouse it, as well. Continuous improvement takes investment from every level and role at your organization.

What are the Challenges of Continuous Improvement?

One of the largest challenges of achieving continuous improvement involves plan creation. To ensure a robust and focused plan is created, it is paramount that your data, your strategy and forecasted performance projections are of the highest quality. Look outside your organization for resources if they don't exist within. Assuming you choose the partnership route, the main challenges of continuous improvement will come to light: finding the investment to make the changes and implementing the changes the way they were communicated. Often, data and analytics won't sway subjectivity. But in order to improve, your teams should avoid subjectivity as much as possible, trusting in the value of your plan.

An additional challenge lies in a sense of defeat. What if you benchmark poorly on something you don't feel you can improve? Location is quite a common sticking point. Though you can't change location itself on a site-by-site basis, you can improve performance (using the other six elements) given the location you possess. For example, based on the traffic to your location, could you improve by creating entrances on two sides of the forecourt to create a better flow and higher volume? You can use the six elements to live up to the potential of your location; therefore, you should not allow static properties of your site to deter you from enacting the continuous improvement cycle.

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