Customer Process Technology Implementation for Lidl's Operations

This report delves into the realm of customer process technologies, specifically examining their application within Lidl, a prominent international discount supermarket chain. It begins by defining operations and logistics management, emphasizing the role of customer process technologies in facilitating customer interactions and enhancing organizational capabilities. The report focuses on self-checkout machines as a key technology for Lidl, evaluating their potential for improving customer convenience and operational efficiency. It explores alternative technologies, long-term strategic capabilities, and the associated costs of implementing self-checkouts. The analysis highlights the benefits of reduced labor costs, increased customer convenience, and faster checkout times. The report also provides recommendations for implementing self-checkouts, including trial systems, employee training, and continuous monitoring. Overall, the report serves as a comprehensive analysis of how customer process technology, particularly self-checkouts, can be strategically implemented to enhance Lidl's operations and customer service.

Logistics and Operations
Management
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Table of Contents
INTRODUCTION...........................................................................................................................1
Customer process technologies and one process technology for improvement and implementation
in Lidl...............................................................................................................................................1
Evaluation of recommendations......................................................................................................3
Alternative technologies..............................................................................................................3
Long term strategic capabilities...................................................................................................4
Cost of change.............................................................................................................................4
How the recommended process technology can be implemented to facilitate the operations of
Lidl………………………………………………………………………………………………..5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7
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INTRODUCTION
Operations and Logistics Management includes designing, implementing and managing
systems for the efficient deployment of personnel and physical facilities, along with raw
materials, finished goods information as well as services (Slack, 2015). Customer processing
technology significantly provides immediate interface between a company and its customers as
well as it facilitates human interaction with customers (Lin, Chen, and Kuan-Shun Chiu, 2010).
The report herewith deals with customer process technologies and its suitability on long term
strategic capabilities. Here, for this report, Lidl, a leading international discount supermarket
chain of Germany having more than 10,000 stores across Europe is taken into consideration.
This report present a customer process technology for Lidl for improvements along with defining
and long term strategic capabilities and cost of possible change after implementing such
technology.
Customer process technologies and one process technology for improvement
and implementation in Lidl
The organizational capabilities can be improved through working on three major areas
such as people, process, and technology. The main aim behind process improvement is to
increase business performance which further enhances the delivery of product and services. The
process technologies are the machines, equipment and devices that positively contributes to
organizational performance and adds value to customer services. In general words, many
customer process technology facilitates immediate interface between a corporate entity and its
customers, on the other hand, it can be said that customer process technology facilitates human
interaction with customers (Slack, 2015). The direct interaction among customers and
organization was low, traditionally due to absence of technology, however, the development of
technology improved interaction level among customers and a company. Lidl is a leading
international discounts retailers who can go for improving process to make customer interactions
more effective so as to improve customer’s services. Within the supermarket industry, it is
important to approach customer convenience. The self –checkouts is a customer process
technology that facilities customers’ convenience in retailing experience (Edwards, 2011). In the
simpler words, Self-checkouts are seen as the most important transaction system which have
gained popularity over some past decades. Lidl is committed to improve the technological
experience of individual customer therefore, it tries to implement new technologies in stores
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while focusing on customers convince (Schlieweand Pezoldt, 2010). The customer process
technology named as self-checkout machines which are designed to provide a mechanism for
customers so they can easily process own purchases from a supermarket/ retailer. In a practical
scenario, the cited customer process system, Self-checkouts provide an opportunity to customers
to act like a cashier by paying bills through scanning and applying payment for the items they
have purchased. The use of self-checkout for providing customer convenience has been
increased over the times, at present more than 500,000 self-checkout units are used worldwide to
offer customers with an ease to pay their bills (Arnfield, 2014).
This customer process technology is famous among retailer were large number of
customers come on daily basis and new chain-owned stores in developed countries are
promoting the use of self-checkout machines (Lee, Fairhurst and Cho, 2013). The technology is
evident to be moved from the grocery segment into other retail segments like as department
stores and convenience store etc. According to the secondary data presented in Butler (2015)
Lidl is wising to £1.5bn for store expansion with a technology self-checkouts in upcoming three
years. The new look outlets will significantly designed while looking over the convenience of
customers and their attraction. The here cited discounted retailer is aimed at opening 40-50
stores within the UK, in upcoming years m, therefore, it is suggested to come with a suitable
customer process technology named as self-checkout machines (Arnfield, 2014). Lidl is a fast-
growing organization, and British’s shopping habits have been revolutionise the customer
services especially for retailers and forced them to improve services provide to retail customers.
The company has a goal of having 150 existing sites “store of the future concept “ in next three
to four years, therefore, it can come with new technology to streamline its operations and to
provide customers with ease in shopping at its store. Through such initiatives, Lidl is going to be
the first UK discounter which will introduce self-checkouts, however, the concept of self-
checkouts has been favored by many of supermarkets and convenience stores like and TESCO
(Hilton and Marandi, 2013). The organization cited herewith is moving towards trialing self-
checkouts in stores, in this respect, Retail Analysis (2014) carried out some facts to initiatives in
which Lidl is moving towards self-checkout trial in the UK. The facts revealed that the
technology is already used across UK therefore, it will not a surprise that Lidl is using such
tactic. However, the organization will try it to seen the improvement in customer service from
such tactics, but Lidl is evident with not a single checkout in any other markets where it operates.
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The use above cited customer process technology is going to have a great on operational
performance at worldwide stores.
Evaluation of recommendations
Alternative technologies
Previously, the discounted retailer were not interested in using self-checkouts technology
than other retailers who are worried to invest this technology m, but the increasing demand from
customer’s side have forced Lidl to come with new technology. However, maintenance of self-
service tills is not going to essential as it is more efficient than well-trained cashiers. For the trial,
the discounter has opted for the popular scan and bag technology which will not involve an
automated scanner. There are some alternative customer process technologies which can be used
at the place of self-checkouts. The foremost alternative technology is traditional cashier-staffed
checkout which facilities individuals to easily pay out their bills however, the technology used is
the old one which will involve some issues related to space (Self-checkouts: Who really benefits
from the technology?. 2016). Including this, there have been other alternative systems such as
self-scanning in which a portable barcode scanner is used by a customer to check out the bills
and bag items at the time of shopping. After finishing the shopping, the individuals can take
scanner with them at checkout kiosk, where the information regarding payments of bill and
amount is automatically transferred from the barcode scanner to the kiosk, however, sometime it
likes with the customer loyalty card if applicable. Finishing the process allows customers to pay
bills and receives receipt at the checkout kiosk. Nonetheless, it becomes important to maintain
the integrity of the system for which random audits or RFID are used. Including this, another
alternative system is Scan Bag Go technology, which facilitates customers to check out items
with a handheld scanner which is given them in the stores passageways during their shopping.
The scanner provide to customers is designed so as to facilitate functions such and price check
and discounts available on items (Arnfield, 2014). Adding to this, digital shelf technology is also
an alternative for a discounting retailers in which shopper are allowed to pay videos and view
special offers. Lidl, in future can use scanners to show discounts to customers ion the available
products in the store. However, hybrid checkout systems are used as an alternative of self
checkouts in which cash counter is to be switched between cashier and customer. Hybrid
Checkout allows customers and cashier to scan barcodes parallel and simultaneously in which
customers can increased after the cashier scanning (Lee and Yang, 2013). The system will be
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very complicated as compared to Self-Checkout hence and will consume more time, hence, Lidl
is proposed with using self-checkouts at its discount stores which is beneficial than other
alternatives.
Long term strategic capabilities
The major advantage of using self-checkouts as a customer process technology, the
retailers can reduce the cost of labour because technology will fill the place of cashier (Wang,
Harris and Patterson, 2012). This discount retailer is not going to require people to handle cash
counter hence labour cost reduces. Including this, labour costs can be reduced as only one
attendant will be needed to handle four to six checkout lanes and the customer will themselves
work as the cashier hence, labour cost reduces which will cut down the expenses (Butler, 2015).
Some o of the customers in retail stores are experienced to be in hurry hence, they do not want to
interact with cashier or do not even like to a be a part of a queue, such customers can use self-
checkout to avoid those situations which facilitates customer convenience and loyalty. Self-
checkout technology is faster as compared to a cashier lane which can further reduces the length
of checkout lines and waiting time in a retail store (Anand, 2011). Efficiency and Speed of
Checkout defined long term capabilities of organization to offer quick customer service.
However, use of self checkouts system requires less space to be placed these machines. The
number of kiosks can be placed in a small area, which does not acquire more place in a store,
thus, customers can transact in minimal space. There are some regulations which are to be
fulfilled by the organizations such as Cybersecurity and it is restricted to sale alcohol products
through self-checkouts. Lidl has strategic capabilities to use new scanning technologies designed
to speed up checkout (Litfin and Wolfram, 2010).
Cost of change
The application of self checkouts are going to bring changes in the operational process
that might be a costlier option for a corporate entity, however, it benefits can cope up all the
costs. The major cost included with the use of self- checkouts is that company is going to have
huge financials cost to implement such technology in the retail stores. Furthermore, it is going to
change the way in which customers pat their bill as they involve in the process of payments and
can make their payments via self-checkouts, hence, the involvement of cashier become low at a
movement (Gunasekaran and Ngai, 2012). The use of technology will require a trial which is
going to be costly for Lidl. For some customers, it will be quite difficult to make use of self-
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checkouts thus they require instructions. These instructions can be provided by the employees
will assist those customers, therefore, it is required that employees worker at the Lidl stores are
to be provided with effective training to use self- checkouts, thus, company has to bear training
cost.
How the recommended process technology can be implemented to facilitate
the operations of Lidl
As prior to implement the checkout machines it is necessary for Lidl to go through a trial
system in which self-checkouts can be trials in difference stores to know it impact on customer
service. The organization is recommended to use EasyFlow solution which is a part of ITABs
self-checkout concept, through which the efficiency of self-checkouts can be identified. This
trial method is designed for increasing efficiency and creating fast and flexible checkout options.
However, it also important for company to train existing stores in the employees for the use of
self-checkouts so that can effectively assist customers for using this technology. The internal
member of stores are to be communicate with the implementation of new technology among with
its benefits for the organization. The business entity must focus on educating shoppers of the
“correct” checkout procedure, so that they can process their transactions easily. At the initial trail
stages, the customers are to be served by a human being or store employees so there might not be
any issue in operating self-checkouts. Including this, continuous monitoring on the responses and
customer and proper maintenance of self-checkouts machines must be there to facilitate the
operations of Lidl (Wang, Li and Li, 2010). The long term benefits of using self-checkouts are
increasing efficiency, creating fast and flexible checkout options, free up staff as well as will
improve the levels of service. Including this, it reduces waiting times up to 40%, and enhances
shopping experience of consumers.
CONCLUSION
The above report is based on explaining customer process technology in respect with an
international discount retailer i.e. Lidl. The organization is found to be committed for improving
technological experience of customers therefore, it tries to implement new technologies focused
on customers convince. Self-checkouts systems is an effective customer process technology
which is recommended to Lidl for improving its operational performance. However, Scan Bag
Go technology, is found as an alternative to Self-checkouts systems but, a comparison shows
Self-checkouts as an important system. The long term benefits associated with self-checkouts
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include are increase in efficiency, fast and flexible checkout, reducing labour cost and improving
levels of customer service.
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REFERENCES
Books and Journals
Anand, A., 2011. Welcome Valued Customer... to More Self Checkouts. Today News.
Edwards, T.V., 2011. Techniques for personalizing self checkouts. SAGE.
Gunasekaran, A. and Ngai, E. W., 2012. The future of operations management: an outlook and
analysis. International Journal of Production Economics. 135(2). pp.687-701.
Hilton, T. and Marandi, E., 2013. Adopting self-service technology to do more with
less. Journal of Services Marketing, 27(1), pp.3-12.
Lee, H.J. and Yang, K., 2013. Interpersonal service quality, self-service technology (SST)
service quality, and retail patronage. Journal of Retailing and Consumer Services, 20(1),
pp.51-57.
Lee, H.J., Fairhurst, A. and Cho, H.J., 2013. Gender differences in consumer evaluations of
service quality: self-service kiosks in retail. The Service Industries Journal, 33(2), pp.248-
265.
Lin, R.J., Chen, R.H. and Kuan-Shun Chiu, K., 2010. Customer relationship management and
innovation capability: an empirical study. Industrial Management & Data Systems, 110(1),
pp.111-133.
Litfin, T. and Wolfram, G., 2010. New automated checkout systems. InRetailing in the 21st
Century (pp. 189-203). Springer Berlin Heidelberg.
Schliewe, J. and Pezoldt, K., 2010. A cross-cultural comparison of factors influencing self-scan
checkout use. Journal of Business & Economics Research, 8(10), p.39.
Slack, N., 2015. Operations strategy. John Wiley & Sons, Ltd.
Cichocki, A., Ansari, H.A., Rusinkiewicz, M. and Woelk, D., 2012. Workflow and process
automation: concepts and technology (Vol. 432). Springer Science & Business Media.
Wang, C., Harris, J. and Patterson, P.G., 2012. Customer choice of self-service technology: the
roles of situational influences and past experience.Journal of Service Management, 23(1),
pp.54-78.
Wang, X., Li, D.and Li, Y., 2010. A production planning model to reduce risk and improve
operations management. International Journal of Production Economics. 124(2). pp.463-
474.
Online
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Arnfield, R., 2014. Supermarket self-checkout technology approaching tipping point?. [Online].
Available at: < http://www.kioskmarketplace.com/articles/supermarket-self-checkout-
technology-approaching-tipping-point/>. [Accessed on: 3th August 2016].
Butler, S. 2015. A Lidl bigger: £1.5bn store expansion to include self-checkouts and toilets.
[Online]. Available at: < https://www.theguardian.com/business/2015/nov/11/lidl-
expansion-stores-self-checkouts-toilets >. [Accessed on: 4th August 2016].
Retail Analysis, 2014. LIDL to introduce Self-Checkouts in UK store. [Online]. Available at:
<http://www.retailanalysis.igd.com/Hub.aspx?id=23&tid=3&nid=11980 >. [Accessed on:
4th August 2016].
Self-checkouts: Who really benefits from the technology?. 2016. [Online]. Available at: <
http://www.cbc.ca/news/business/marketplace-are-you-being-served-1.3422736/>.
[Accessed on: 4th August 2016].
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