Bagging process design

So what is it worth to reduce the use of bags at your local grocery store? OK, so for one store, it may not be worth too much, but if you have over 1,000 stores like Supervalu does, saving a few bags here and there can be real money. Thus the chain has instituted a “rigorous” program to reduce the number of bags used (At Supervalu, Cost Cuts Are in the Bag, Wall St Journal, Mar 23).

The new rules are part of a training program that Supervalu Inc. believes will save it millions of dollars a year by putting more items in each bag or skipping the bag altogether. Plastic bags cost about two cents apiece and paper bags cost five. The Eden Prairie, Minn., operator of Albertsons, Acme Markets and Jewel-Osco stores uses more than 1.5 billion plastic and paper bags a year at about 1,100 stores, not counting its Save-A-Lot discount stores, where customers bring or pay for their own bags. …

Some of the Supervalu guidelines reinforce familiar bagging rules, such as starting the packing at the corners and moving from the outside in. But others break with common practices: No double-bagging. No bags for large items or items with handles, like one-gallon orange-juice containers. Never ask, “Paper or plastic?”—just use plastic bags. The rules can be broken, but only on request. …

The chain averages three to five items a bag, whether the bag is paper or plastic, and sells about 10 billion items annually. Since mid-2009, it has boosted its average items per bag about 5%, saving $4 million to $6 million annually even as prices for plastic bags have climbed, Mr. Siemienas says.

On the one hand, this seems like a pretty straightforward process redesign. You institute new work procedures, you make sure workers stick to them, and savings fall to the bottom line. On the other, there are two twists that make this a little more challenging. First, you have to implement this with anyone working the front end of the store at over 1,000 stores. That’s a little more involved then just putting through an engineering change order at a single factory. Having so many stores selling at high volume makes it pretty easy to see which stores are getting with the program and which are not (the article reports that there is a monthly meeting to discuss bagging figures; I bet they don’t serve decaf for that one) but the cost of training staff and monitoring individual performance is high.

The second part of this is that it all happens right in front of the customer and the customer might have an opinion. I would venture that at urban locations where more people walk to the store or at stores with an older customer base, customers systematically want fewer items in the bags or want items bagged even if they have handles. Supervalu rightly is willing to blow through extra 2 cent bags if the customer asks, but why make the customer ask if the average customer at a given location always asks? This just seems to set up the lowly bagger for a miserable time, caught between the rock of the customer and the hard place of the front-end manager. Said another way, it is easy to specify a process in a vacuum that should work in the real world until you bring random customers. Then you have set up the front-line worker to fail. That said, if they really have saved over $4 million, most customers must not have noticed that bags are a little heavier.