Retail Solution: Profit Management In A High Transaction Volume Environment: Retail By Steven R. Anderson, Acorn Systems

What do retailers, financial institutions, telephone companies, airlines, universities, and distributors have in common? They are all engaged in a high transaction volume environment. With hundreds of thousands, if not millions of orders each period, encompassing a myriad of customers and products, they thrive on uniformity. Without it, they could never achieve the speed of processing required of them. Customers at Target would get out of the line and take their business to Wal-Mart. Travel agents would direct their customers to different airlines that offer the same price. These institutions and their industries have mastered their processes (e.g., customer service). They are the McDonalds in their respective fields. Every time you walk into a PNC Bank or place an order with Sysco Food Service, regardless of location, you will be offered the same products and services. Your transactions will be processed through the same systems. Your bills / receipts will have the same look. And the phone call you get when your account is delinquent will be the same. Standard Operating Procedures are good business. They lower overall cost, improve quality, and most importantly, enable scalability.

Growing the business through more stores, more students, and more planes increases revenue and the likelihood of survival. But this comes at a price. All of this new business increases complexity. The company becomes exponentially more difficult to manage as the number of transactions grow into the millions, or the number of locations grow into the thousands. Reporting and analysis is cumbersome. Despite having sophisticated ERP systems to run operations, most managers still rely on spreadsheets packages like Microsoft Excel or Lotus 123 to do their number crunching. However, both of these tools are limited to less than 100,000 records.

Steven Anderson is Chairman and Founder of Acorn Systems, a profit improvement company that leverages its proprietary software and consulting services to help boost the operating profits of their clients. In 1996, Mr. Anderson founded Acorn to assist turnarounds and buy-outs through its unique approach to Activity-Based Costing that he pioneered (now called Time-Driven ABC). After a successful start that more than doubled the profits of the first five clients, he converted the methodology into a software solution that could assist a broader audience. Today, Acorn has over 150 clients in the retail, financial service, consumer packaged goods, and distribution sector. The company has added over $15 billion to the market capitalization of its clients. Mr. Anderson is currently involved with helping Acorn further penetrate the private equity space. He has written over 20 articles, white papers and case studies on M&A Strategies, Supply Chain Management, Customer Profitability, Product Management, Lean Solutions, and IT Value Management.