Sales jump and 2m in cost savings operating model

24% sales jump and $2m in cost savings by transforming a retailer’s operating model

Our Work | Case Study

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Our client, part of an international not-for-profit (NFP) organisation, has 125 local social services, 230 retail outlets and five distribution centres in NSW.

Seeking a new operating model for retail and logistics

The NFP sought to design and implement a new operating model for its retail and logistics operations to improve profitability without compromising its mission of supporting people in need.

With only incremental change across more than a century, the 15,000 members, volunteers and staff needed comprehensive support for the transition to the new strategy and operating model.

The organisation wanted an operating model that articulated how goods were acquired, transported, sold and disposed of across its stores. The operating model also needed to identify opportunities to reduce costs and improve revenues while maintaining or improving employee and customer outcomes.

Collaboration essential to gain buy-in for model

A highly collaborative approach was essential, so Nous worked with the retail and logistics leadership team and the leaders from geographic regions to identify opportunities for change and to gain buy-in to a new operating model.

We analysed operations through quantitative analysis of retail and logistics data, captured using spatial and geographic analysis tools. This analysis included the organisation’s domestic branch network and its model for exports.

Using these insights, we facilitated co-design workshops with staff and leadership to co-develop a new operating model. This included identifying best-practice solutions in place in some retail outlets that could be introduced in others.

With the future operating model outlined, Nous assisted the executive with key steps in implementation, including:

  • establishing program governance, developing the HR transition process and preparing the benefits realisation framework
  • consulting with members, volunteers and staff to confirm the requirements to achieve the future operating model
  • testing, iterating and refining the operating model and structural design for all service delivery and corporate service functions
  • mapping the skills and capability of more than 2,000 staff to the future structure to determine impact and salary savings
  • delivering team activation and team building training, so all teams had clarity about their goals, roles, behaviours and new ways of working.

Nous provided agile program management and change management support along the way. We embedded Nous team members to assist with implementation when the right skills were not available or staff could not be seconded from day-to-day operational delivery.

Savings and sales increases are being realised

The project was delivered to plan and exceeded the original objectives and outcomes. Results included significant efficiency gains and financial benefits in the form of salary savings, expense savings, capital savings and increased revenue.

The implementation resulted in $2 million in savings and an increase in sales of 24 per cent in regions where Nous implemented the new retail and distribution model, and a 38 per cent increase in export sales.

What you can learn from the NFP

Highly collaborative engagement is vital to achieving the buy-in of key stakeholders.

Spatial and geographic analysis tools can help to understand current operations and potential future operations.

Using a partner to move from design of an operating model to its implementation can help to maximise chances of success.