5S towards sustainable competitive advantage in franchise retail business

Abstract

This study aims to find empirical evidence in filling the "how-to"gap of a service company in order to have a sustainable competitive advantage by adopting lean system or known as a workplace organization. This study surveyed 150 customers from three largest franchise minimarts in Bandung City in order to determine the characteristics and interrelations that occur in the three research objects observed, namely 5S or workplace organization, service's waste, and service quality. The method used is descriptive method and structural equation modeling based on the least squares method or PLS-SEM. The statistical tools used are SPSS20 and SmartPLS3. The results reveals that the three largest franchise minimarts in Bandung City, had a high level of service quality, low service's waste, and well-managed workplace organization. The relationship between them shows that the three franchise minimarts continue to survive and continue to grow after operating for more than 3 decades, because they implemented a workplace organization (5S, seiri-seiton-seiso-seiketsu-shitsuke), so that this can reduce the occurrence of service's waste by 82.4 %, where even this has an impact on increasing service quality by 27.9% with a very high model strength of 73.5%.