Professional Builders Merchant

Triage is the process of determining the priority of patients’ treatments based on the severity of their condition. This rations patient treatment efficiently when resources are insufficient for all to be treated immediately.

Based on initial work by Dominique Larrey during the Napoleonic Wars, triage was evolved in World War I by French doctors treating the battlefield wounded at the aid stations behind the front. However, readers may be more aware of TV’s Hawkeye Pearce, Hotlips Houlihan and Radar O’Reilly from M*A*S*H 4077 in the Korean War, whose team practiced the art of triage on its unfortunate patients whilst getting up to all sorts of other antics…

Medical triage deals with urgent and critical circumstances; it requires a rapid assessment of the situation as outcomes can be terminal if you make the wrong decisions. So there is a need to set priorities, to sort out and classify the treatment necessary to stabilise the situation which will be the first steps necessary to ‘restore health’.

So, “What the heck has a brief history of battlefield medicine got to do with running a profitable builders’ merchant?” you may well ask… Well, it could be argued that the economy is something of a battlefield at the moment with all sorts of business casualties suffering all sorts of commercial injuries and being in need of financial resuscitation.

BTM¹ evolved in the late ‘90s on the other side of the Atlantic as a framework for business decision making, goal prioritisation and resource allocation. It is based on the same categorisation principles employed by battlefield medics i.e. essential / critical = red, important / urgent = yellow, or optional / supportive = green. Where resources are limited (when are they ever not?!) they are first allocated to red, then amber then green. At CSD we adopted a modified form of BTM¹ for our business consultancy projects (as opposed to pure design)and altered the priority headings to a more practical MD–SD-CD² format.

When you go to the doc’s ‘feeling a bit off colour’ they’ll probably do all the basic checks — the same can be said of a business which is not really as healthy as it should be, i.e. you will check out all the KRAs³ like turnover and margins by product groups, space-related turnover, ‘shrinkage’ levels, customer mix, deliveries vs. collections, stock turn, staff sickness and absence, changes to competition, local market conditions, etc — trends in all of these.

To a greater or lesser extent, most companies will be gathering this data and more on a regular basis. But it does no harm at all to apply this process, systematically and in depth, say every 12 months as part of a BRaD⁴ programme. These data can form the initial input for the Business Triage process as they are all vital life signs for a business which can either; drag the business down, limit its growth, or add the icing on the cake, i.e. they are things you ‘must do’, ‘should do’ or ‘could do’.

Interpretation of the data gathered needs to be constructively critical so that rather than finding excuses for poor performance areas, the ‘nettles’ need to be grasped and dealt with — which is why an outside view can be of use here.

A recent example of applying BTM¹ to a merchant may help people see the significance, practicality and usefulness of this approach. Some of the main issues included:

• A reduction in margins and collected sales;
• A decline in retail sales and increase in delivered sales;
• Falling stock-turn;
• Higher levels of staff sickness and (staff) turnover;
• Two new hardware / handyman shops opening — one in town the other in the major village in the catchment area
.

Having gathered this information, the next stage of the process is to determine why this is happening so as to be able to determining what actions need to be taken.

The margin reduction was clearly due in part to a struggling economy and price competition. It will also be linked to the decline in retail sales which tend to generate higher margins. This, in turn, is likely to affect collected sales which tend to be higher margin — whether they are retail or trade sales — as well as not involving transport costs.

Further analysis of the site operation emphasised an air of untidiness and evident lack of professionalism. Shop shelving was often empty, but stocks on the floor whilst back-up areas tended to overflow with stock. It was similar in warehouse and yard areas with stock not put away affecting stock access, order picking and selection. This, in turn, leads to poor customer service.

When stocks were assessed it was clear that there was a tendency to be overstocked on the slow movers and out of stock of the best sellers which is bound to affect sales and the customer’s view of the business.

The staff problems were partially due to a couple of redundancies and general air of malaise. In fact, when the owner paid this branch a visit (they had four branches) and asked a customer if he needed help, the response was “It’s really nice to be spoken to!” Hmmmm…?

Taking the above and much more analysis into account, the MD–SD-CD² approach defined an appropriate sequence of actions:
Must Do

• Tidy up the merchandising and general branch housekeeping;
• Get to grips with the buying process;
• Raise staff moral and put in place / reactivate a pride in the business and need for customer service.

Should Do

• Introduce an effective corporate signage and ticketing package;
• Put some merchandising and customer care training in place;
• Re-organise racking layouts to improve handling and customer traffic flow

Could Do

• Review the retention of a joinery shop;
• Look at switching from sand and aggregate bays to all 1 tonne bags;
• Convert ‘storage warehouse’ into a ‘sales warehouse’;
• Gradual investment in yard racking to reduce damage, improve access and overall professional look of the yard.

JARGON BUSTER

1 Business Triage Modelling
2 Must Do – Should Do – Could Do
3 Key Results Areas
4 Business Review and Development