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Titled Mission Breakthrou

apparel retailer returns fvetimes investment in two ye

Bobs Stores sells men, women and childrens discounted name-branincluding casual and activewear, and footwear. The company operatlocations, averaging 45,000 sq ft., in six northeastern states that targetto upper-middle incomes. Bobs Stores was established in 1954 by Boand acquired out of bankruptcy by off-price retail giant TJX Compan2003. TJX sold Bobs Stores to the private equity rms Versa Capital Mand Crystal Capital in August 2008.

Building the Guiding Coaliti

In early 2006, Bobs Stores mbegan investigating Six Sigmfor improving processes. Afinvestigation of the methodprovider, Bobs Stores beganSigma deployment, in par

with SBTI, late 2006. Leveraging earlier experience in Lean and reasSix Sigma methods would support and enhance the organizations skproblem solving arsenal, the stores operations team was a key advocatalyst to create to create leadership alignment. Other tactical steps the Gaining Senior Management Buy-in phase included: interviewSigma consulting rms, presenting (internally) a white paper on Six Sigbenets, holding an executive offsite to conrm strategic objectives afor Six Sigma, and the President championing the deployment by intthe effort to the entire organization.

Business Situation

At the the start of the deployment, clear challenges were directly in fBobs Stores leadership team. In 2006, they ended the year just short goal of reducing operating losses by half. For 2007, the focus of the teon improving performance, with no new store openings until the buproduced sufcient comparable store sales increases. Bobs Stores wa

Leveraging engaged top management and following proven progrpractices, this case study shows the successful program level deploLean Sigma process improvement and problem solving in an Appaenvironment, delivering strong nancial impact for the corporation

50 Words or LessCASE STUDY

Industry: Retail

Client: Bobs Stores

Event:Six Sigma

ABOUT SBTI

Recognized as thought leaders and innovators in business processimprovements, Sigma Breakthrough Technologies Inc. (SBTI) is a globalmanagement consulting rm specializing in the deployment of Six Sigma andLean methodologies. SBTI delivers innovative and sustainable business processexcellence solutions by developing future leaders with core competencies to

drive superior top and bottom line results. We advance our clients with best-in-class results in revenue growth, cost reduction, new product development andprocess improvement.

SBTI offers a full range of programs and services. These offerings includeleadership workshops, asset maximization, strategic planning andassessments, multilevel managerial workshops and specialized belttraining at the tactical level.

SBTI delivers the fastest and highest return on investment in the industry.Always incorporating a measurement benchmark, most of our clientsexperience an average of 30X return on investment (ROI) within the rst 24months of engagement.

Throughout our history, SBTI has demonstrated a track record of quicklyresponding to clients global needs. Our international offerings are handledthrough regional ofces in Latin America, Europe and Asia. Materials areavailable in English, Spanish, Italian, French, German, Mandarin, Koreanand Japanese. Others in process of being translated.

Dr. Stephen Zinkgraf, one of the original S ix Sigma developers, foundedSBTI in 1997. Beginning with two corporate clients, SBTI has grown to morethan 50 global corporate deployments and an additional 50 clients usingSBTI methodology.

SBTI Executive Directors and Master Consultants have a minimum of 10 yearsindustry experience some 25 or more. Our international ofces provide thesame unmatched experience and capabilities as in the states, while offeringlocal language and bilingual instructors. All of SBTIs consultants have leadmultiple waves of training, completed numerous projects and continuallymentor Black Belts.

Value Proposition

What We Provide

Results. Guaranteed.

Global Resources

Our History

123 N. Edward Gary, 2nd Floor, San Marcos, TX 78666 888.752.7070 sbtionline.com info@sbtimail.com

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CASE STUDYto make tremendous improvements in its supply chain, inventory turns, vendorcompliance, oor buying processes and pricing management.

Leadership Training, Projects and People Selection

To get executive-level alignment, Bobs Stores conducted a one-day ExecutiveWorkshop one week after the Presidents announcement. Following this event,department heads participated in a three-day Champion Workshop.

Timing was far from perfect, as these events landed in November and December,the height of the retail annual business cycle. However it was clearly understoodthat it was equally important to plan for the future as it was to manage the day-to-day operations. Company initiatives and operational measures were claried,

with projects proposed, discussed and selected. The list of project leaders werereviewed and nalized with plans for internal communication. HR and Financeworkshops were scheduled and conducted. Projects would start in less than 30days after the Champion Workshop.

Project selection followed key steps, as outlined in an internal presentation:

1. Develop Vision Statement2. Dene/Reconrm Business Critical Ys for next period (Quarter, Season, Year)3. Project Cluster / Idea Solicitation4. Dene Ranking Criteria for Project Selection5. Strategy Review Meeting6. Final Project Selection Decisions / Resource Assignment

Wave 1 Projects were carefully aligned with business strategy. Projects toimprove the seasonal oorset and ll process for denim basics drove in-storeimprovements aimed at increasing year-over-year same store comparison sales

revenue. Examination of the purchase order creation process, the assortmentplanning and ladder planning process reduced the costs of goods.

Additionally projects aligned with inventory ow and control includedimprovements in the versioning, in-stock denim basic replenishment, permanentmarkdown execution and in-store POS rotation processes. For every projectselected and chartered, three to four other projects were identied and shared asfuture projects ready for teams and project leaders.

Commitment of Resources

On the resource side, Bobs Stores dedicated one percent of their overall employeepopulation to the effort to lead the effort with ve to seven and a half percentleading projects as Green Belts. The key limitation was the ability to fullysupport the teams with active team members. Nearly everyone in Bobs StoresHQ was on a team so the number of active projects had to be managed. A three-day-per-week training schedule was employed for the Green Belts, with one-day-per-month for three months for the rest of the employees.

Coaching, mentoring and feedback to project leaders was regularly scheduledand required for all active projects. Champions routinely attended coachingsessions. Though results took time, Bobs Stores teams never wavered in theircommitment. By the Q3 and Q4 of 2007 it was clear that Mission Breakthrough

Bobs Stores

would deliver improvements, key to the organizations nancial pe

In 2007 Bobs Stores improved top-line results, with bottom line nearsegment loss from the prior year. Additionally merchandise marginssignicantly, and they began to deliver positive comparable store sal

The Next Wave

Wave 2 started in late 2007 with two main areas ofprojects extended improvement areas from Wave

Wave 2 would address supply chain opportunitiesareas of direct ship, vendor compliance and transpmanagement. Finally, Wave 2 also included projecaddressing in-store and permanent markdown anmarketing processes. New project leaders joined the number of skilled resources and active projects

At a key internal town hall meeting, timed with thof Wave 2, AVP Six Sigma Director Dave Rosenfeld recaps Wave 1 rewas great to show the organization the payoff that we were beginning to rea

couldnt believe it when they saw 6 and 7 gure savings coming from the pr

Results make believers of everyone! Now we have some traction.

Five X Return on Investment

The return on investment (ROI) for the program has been carefully tcustomers have seen the benet, key processes were improved, and

developed leadership and problem solving skills. The ROI is greaterover two years and accelerating.By August 2008, Bobs Stores made progress in improving its comparsales, operating results and cash ow. As (then) SVP General MerchaManager Kelly Toussaint puts it, Coming from a merchandising backgrfrom being one of the biggest skeptics of Six Sigma in the leadership kickoff m

being thoroughly convinced that Six Sigma is the way we can most effectiv

our business for our customers. We delivered key nancial improvements, and are ready for growth and further improvement.

Dave Rosenfeld, AVP Six Sigma Director, Bobs Stores Corp.

Kelly Toussaint, SVP General Merchandise Manager, Bobs Stores Corp.

Scott Hampson, SVP Stores, Bobs Stores Corp.

Daniel Kutz, President, SBTIKristine Bradley , Senior Consultant, SBTI

Maria Madrigal, Consultant, SBTI

1 Source: Hoovers

2 This process repeats itself on an annual basis as part of the strategic planning and budgeting pro

2009 Sigma Breakthrou