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Business Process Improvement at The Gap

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Business process improvement opportunities are everywhere, even at a clothing megastore. One blogger reports on system and process errors at The Gap.

The post comes from Michael Krigsman, who explains on ZDNet:

The facts. Around Black Friday, Gap had a great sale, so I bought pants online; the fit wasn’t right, so I returned them to a local Gap retail store. The store took back the pants and an associate phoned in a replacement order. After a few days, an email informed me that one color was out of stock, and I received an email explaining the order was reduced accordingly.

When the new pants arrived, each was a different size, with none matching what I ordered. Every pair had the correct size label sewn in, but none matched the paper tag attached with a nylon cord.

It might seem a little too soon to pick on The Gap. After all, remember the great logo fiasco of 2010? Unfortunately, though, the story doesn’t stop there. It only gets worse—and weirder.

Business Improvement: Gap Store

© Flickr user suepark

The author continues:

I went back to my local Gap retailer, where the store manager apologized and, after jumping through some computer hoops, eventually refunded my money. Or so I thought.

A quick check of the receipt showed a three dollar discrepancy between the amount I paid and what the store refunded. After extensive checking, the manager reported back: the computer said I had already returned one of the pants. Obviously, this was incorrect.

Oops.

What’s going on with this business process? Improvement, as always, requires truly understanding how pieces fit together and how stakeholders see their role. From the outside, we can make some educated guesses. Let’s start with the very first issue:

“The store took back the pants and an associate phoned in a replacement order. After a few days, an email informed me that one color was out of stock…”

This problem is clear opportunity for business process improvement. If an employee calls in an order on behalf of a customer, they should be told immediately whether the item is available. The warehouse should immediately set that particular piece of stock aside for shipping.

When the new pants arrived, each was a different size, with none matching what I ordered.

How could this be? Whoever packed the order did not cross-check the packing slip with the merchandise. But this kind of business process issue is not all that surprising. The holidays are a busy time of year, and it’s likely that the staff member responsible for pulling and packing has less than a minute to get this done. Without confirmation from another person, significant random auditing, or an automated procedure—this business process error is going to happen again and again.

Every pair had the correct size label sewn in, but none matched the paper tag attached with a nylon cord.

Of all of the process improvement opportunities in this story, this one is the most fascinating. The author of the post offers a theory:

Apparel manufacturing today is generally outsourced to countries such as China. The outsourcing manufacturer applies a tag at the factory during the production process. After manufacturing is complete, the retailer, in this case Gap, conducts a quality control inspection to ensure the item and tags are correct.

Research shows that factory audits in retail are lacking due to cost. It looks like the factory made a mistake and Gap did not check.

And finally, there is the refund discrepancy. This is probably due to data management problems between the retail channel and the online/direct ordering channel. What a mess!

You don’t have to as large as the Gap to have these kind of business process improvement issues. Companies of all sizes face challenges with quality control, pricing accuracy, and customer communication. What are you doing to avoid being like The Gap?

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