Despite the rise of online, O2O, and omnichannel solutions, offline stores remain critical for certain industries. Food and beverage (F&B) establishments, particularly restaurants and cafes, exemplify this trend as they must provide freshly prepared and high-quality offerings to customers on-site—an experience that cannot yet be fully replicated online. Consequently, F&B companies continue to focus on enhancing the competitiveness of their offline operations.
For coffee and dessert franchises, the in-store experience is paramount, offering customers the aroma and flavor of freshly brewed coffee in a curated atmosphere. Our client, a leading coffee and dessert franchise, has built its success on the strength of its offline operations and remains committed to enhancing them further through innovative menu offerings and elevated customer service. However, one persistent challenge has been managing labor costs. Every service enhancement inevitably leads to increased labor expenses. This challenge has been compounded by recent government-mandated minimum wage increases. Seeking to maintain its exceptional service quality while controlling labor costs, the client decided to address inefficiencies at their root and partnered with Looxent to devise sustainable solutions.
Laying the Groundwork: Understanding Retail-Specific Operational Challenges
The first step was to identify inefficiencies that could be addressed without compromising service quality. While this might seem straightforward, even experienced internal teams found it challenging to agree on the most pressing issues to tackle. This ambiguity stems from the inherent nature of retail and service industries.
Unlike manufacturing, where a limited number of centralized facilities enable granular process monitoring, retail operations are highly decentralized with hundreds of stores spread across a wide geographic area. Without departments dedicated solely to efficiency or cost control, retail operations prioritize sales, often lacking the data infrastructure necessary for in-depth operational analysis. Looxent and the client began by systematically categorizing all tasks performed in the stores, specifically tailored to the unique requirements of F&B outlets. Tasks were broken down, cycle times and frequencies were analyzed, and the results were quantified as much as possible.
This approach yielded surprising insights. Non-core tasks, such as cleaning and dishwashing, accounted for a larger-than-expected share of labor hours. Furthermore, idle time was identified—a revelation that challenged preconceived notions about store operations. These findings underscored the limitations of previous efficiency ideas, which addressed only isolated issues rather than the broader operational picture.
Targeting Inefficiencies with a Multi-Faceted Approach
Once the baseline analysis was complete, the team focused on optimizing tasks with significant labor input but minimal impact on revenue or service quality. These "non-core" tasks were examined through diverse lenses to uncover actionable solutions. Importantly, the approach went beyond simply reducing cycle times to explore whether tasks could be performed less frequently, streamlined, or eliminated altogether.
For instance, cleaning blender bowls—an essential yet repetitive task—was initially addressed by proposing automatic cleaning equipment. However, further exploration revealed other cost-effective alternatives, such as providing separate blenders for different beverage types, thereby minimizing or eliminating cleaning requirements. This broader perspective enabled the development of innovative solutions that balanced cost, efficiency, and feasibility. By expanding the scope of improvement strategies, the team identified numerous ways to enhance efficiency while minimizing capital investment.
Building a Data-Driven Retail Culture
Through this project, the client identified over 30 actionable improvement initiatives. These spanned diverse perspectives and required collaboration across departments, including store operations, R&D, interior design, and procurement. By grounding all initiatives in factual data, the team achieved cross-departmental alignment on priorities and gained widespread support for implementation.
The project enabled the client to achieve a new level of operational efficiency, with each identified initiative now being implemented progressively. While the client had already achieved high levels of efficiency, the ability to elevate operations further within a short time frame stemmed from the data-driven insights established during the project. Although retail industries face challenges in achieving the precision of manufacturing due to their inherent characteristics, developing actionable data at a reasonable level of granularity is entirely feasible.
Conclusion: The Strategic Imperative of Data-Driven Decisions in Retail
This project highlights the importance of establishing data-driven decision-making processes in retail, particularly for labor-intensive operations like F&B franchises. Industry observers frequently note that retail lags behind other sectors in building and leveraging operational data. In an era defined by big data, IoT, and Industry 4.0, the retail and service industries must revisit their reliance on fact-based management to achieve global competitiveness. By examining offline operations through a data-driven lens, companies can unlock significant opportunities to improve efficiency and reduce costs, securing their position in an increasingly competitive landscape.
Despite the rise of online, O2O, and omnichannel solutions, offline stores remain critical for certain industries. Food and beverage (F&B) establishments, particularly restaurants and cafes, exemplify this trend as they must provide freshly prepared and high-quality offerings to customers on-site—an experience that cannot yet be fully replicated online. Consequently, F&B companies continue to focus on enhancing the competitiveness of their offline operations.
For coffee and dessert franchises, the in-store experience is paramount, offering customers the aroma and flavor of freshly brewed coffee in a curated atmosphere. Our client, a leading coffee and dessert franchise, has built its success on the strength of its offline operations and remains committed to enhancing them further through innovative menu offerings and elevated customer service. However, one persistent challenge has been managing labor costs. Every service enhancement inevitably leads to increased labor expenses. This challenge has been compounded by recent government-mandated minimum wage increases. Seeking to maintain its exceptional service quality while controlling labor costs, the client decided to address inefficiencies at their root and partnered with Looxent to devise sustainable solutions.
Laying the Groundwork: Understanding Retail-Specific Operational Challenges
The first step was to identify inefficiencies that could be addressed without compromising service quality. While this might seem straightforward, even experienced internal teams found it challenging to agree on the most pressing issues to tackle. This ambiguity stems from the inherent nature of retail and service industries.
Unlike manufacturing, where a limited number of centralized facilities enable granular process monitoring, retail operations are highly decentralized with hundreds of stores spread across a wide geographic area. Without departments dedicated solely to efficiency or cost control, retail operations prioritize sales, often lacking the data infrastructure necessary for in-depth operational analysis. Looxent and the client began by systematically categorizing all tasks performed in the stores, specifically tailored to the unique requirements of F&B outlets. Tasks were broken down, cycle times and frequencies were analyzed, and the results were quantified as much as possible.
This approach yielded surprising insights. Non-core tasks, such as cleaning and dishwashing, accounted for a larger-than-expected share of labor hours. Furthermore, idle time was identified—a revelation that challenged preconceived notions about store operations. These findings underscored the limitations of previous efficiency ideas, which addressed only isolated issues rather than the broader operational picture.
Targeting Inefficiencies with a Multi-Faceted Approach
Once the baseline analysis was complete, the team focused on optimizing tasks with significant labor input but minimal impact on revenue or service quality. These "non-core" tasks were examined through diverse lenses to uncover actionable solutions. Importantly, the approach went beyond simply reducing cycle times to explore whether tasks could be performed less frequently, streamlined, or eliminated altogether.
For instance, cleaning blender bowls—an essential yet repetitive task—was initially addressed by proposing automatic cleaning equipment. However, further exploration revealed other cost-effective alternatives, such as providing separate blenders for different beverage types, thereby minimizing or eliminating cleaning requirements. This broader perspective enabled the development of innovative solutions that balanced cost, efficiency, and feasibility. By expanding the scope of improvement strategies, the team identified numerous ways to enhance efficiency while minimizing capital investment.
Building a Data-Driven Retail Culture
Through this project, the client identified over 30 actionable improvement initiatives. These spanned diverse perspectives and required collaboration across departments, including store operations, R&D, interior design, and procurement. By grounding all initiatives in factual data, the team achieved cross-departmental alignment on priorities and gained widespread support for implementation.
The project enabled the client to achieve a new level of operational efficiency, with each identified initiative now being implemented progressively. While the client had already achieved high levels of efficiency, the ability to elevate operations further within a short time frame stemmed from the data-driven insights established during the project. Although retail industries face challenges in achieving the precision of manufacturing due to their inherent characteristics, developing actionable data at a reasonable level of granularity is entirely feasible.
Conclusion: The Strategic Imperative of Data-Driven Decisions in Retail
This project highlights the importance of establishing data-driven decision-making processes in retail, particularly for labor-intensive operations like F&B franchises. Industry observers frequently note that retail lags behind other sectors in building and leveraging operational data. In an era defined by big data, IoT, and Industry 4.0, the retail and service industries must revisit their reliance on fact-based management to achieve global competitiveness. By examining offline operations through a data-driven lens, companies can unlock significant opportunities to improve efficiency and reduce costs, securing their position in an increasingly competitive landscape.