How Rolled Throughput Yield (RTY) Can Optimize Operations for retail SMEs
- Hieu Do
- Mar 24
- 3 min read
Updated: Mar 25
The Hidden Cost of Process Inefficiencies
For Operations Managers and COOs in retail SMEs, operational efficiency is a key driver of success. Yet, many businesses unknowingly suffer from inefficiencies that increase costs, delay order fulfillment, and reduce customer satisfaction. One powerful yet often overlooked tool to diagnose and improve operational efficiency is Rolled Throughput Yield (RTY).
RTY is a Lean Six Sigma metric that helps identify defect rates across multiple process steps. Unlike traditional quality measures that assess individual steps, RTY provides a holistic view of process efficiency. In this article, we'll explore how RTY works and how it can be applied to Vietnam's booming e-commerce industry, particularly for SMEs managing orders on Shopee, TikTok Shop, and social commerce platforms.
What is Rolled Throughput Yield (RTY)?
Rolled Throughput Yield (RTY) measures the probability of a unit passing through an entire process without defects or rework. It is calculated as:
Where FPY (First Pass Yield) is the percentage of units that pass through each process step without defects. A low RTY indicates process inefficiencies, rework, and hidden costs.
Practical Example: Online Order Fulfillment Process
The Business Context
Imagine an e-commerce business in Vietnam selling products through multiple channels:
40% of orders come from Shopee
30% from TikTok Shop
30% from their social media fanpage (Facebook, Instagram, Zalo, Threads etc.)
The company processes orders through a 3-step fulfillment process:
Order Processing (FPY = 98%) – Verifying customer details, stock availability, and payment confirmation.
Packing (FPY = 95%) – Ensuring the correct items are packed with proper labeling.
Shipping (FPY = 90%) – Delivering the package without errors (e.g., wrong address, damaged goods).
Applying the RTY Formula:
This means only 83.7% of orders are fulfilled perfectly without rework or delays. 16.3% of orders require rework, leading to additional labor costs, delayed shipments, and customer dissatisfaction.
Tailoring RTY to Your Business with Different Sales Channel Volumes
Since each sales channel has different operational challenges, RTY helps pinpoint which ones contribute the most inefficiencies.
RTY Calculation by Sales Channel
Sales Channel | Order Processing FPY | Packing FPY | Shipping FPY | RTY |
Shopee | 99% | 97% | 92% | 88.4% |
TikTok Shop | 95% | 93% | 85% | 75.2% |
Social Media | 90% | 88% | 80% | 63.3% |
Identifying the Bottlenecks
Shopee: Strongest in efficiency, minor issues in shipping.
TikTok Shop: Higher defect rate in order processing and shipping.
Social Media Fanpages: Highest inefficiencies in order verification, packing accuracy, and logistics.
Actionable Improvements
Issue Identified | Recommended Action |
Order processing delays (Social Media Orders) | Automate order verification using chatbots & CRM integrations. |
Packing defects (TikTok Shop Orders) | Implement barcode scanning and standardized packing processes. |
Shipping errors (TikTok & Social Orders) | Partner with reliable couriers and introduce better tracking. |
The Business Benefits of Using RTY
By integrating RTY analysis into daily operations, retail SMEs can achieve:
✅ Cost Savings – Reducing rework lowers operational expenses.
✅ Faster Order Fulfillment – Fewer errors mean quicker deliveries and higher customer satisfaction.
✅ Better Resource Allocation – Identifying bottlenecks helps optimize labor and logistics. ✅ Higher Customer Retention – A seamless fulfillment process boosts brand reputation and repeat purchases.
Conclusion: RTY as a Competitive Advantage
For businesses in Vietnam’s dynamic e-commerce and retail space, Rolled Throughput Yield (RTY) is a game-changer. By systematically identifying inefficiencies in order fulfillment, startups and SMEs can enhance operational efficiency, reduce costs, and improve customer satisfaction.
🔹 Are you ready to optimize your operations with RTY?
Start by analyzing your fulfillment process and take proactive steps to enhance performance. Investing in data-driven process improvement today will set your business apart in the competitive Vietnamese market.
Let’s Optimize Your Operations for Profitability!
At SOSP Consulting Group, we help FDI retail brands adapt, optimize, and scale profitably in Vietnam market.
Want expert insights and actionable tips? Subscribe to our newsletter!
You'll receive free resources, real-world case studies, and step-by-step guides to optimizing your business.
👉 Follow SOSP Consulting Group for updates and start improving your business today!
------
𝐸𝑚𝑝𝑜𝑤𝑒𝑟𝑖𝑛𝑔 𝑉𝑖𝑒𝑡𝑛𝑎𝑚-𝑏𝑎𝑠𝑒𝑑 𝐹𝐷𝐼 𝑆𝑡𝑎𝑟𝑡𝑢𝑝𝑠, 𝑆𝑀𝐸𝑠 𝑡ℎ𝑟𝑜𝑢𝑔ℎ 𝑒𝑓𝑓𝑒𝑐𝑡𝑖𝑣𝑒 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛𝑠 𝑎𝑛𝑑 𝑠𝑡𝑟𝑎𝑡𝑒𝑔𝑖𝑐 𝑐𝑜𝑛𝑛𝑒𝑐𝑡𝑖𝑜𝑛𝑠
CONTACT SOSP Consulting Group
🏢 Rep Office: 17th floor, Vincom Center Buildings, 72 Le Thanh Ton Street, Ben Nghe Ward, District 1, HCMC
🏢 Headquarter: 3th floor, 126 Nguyen Thi Minh Khai street, Ward 6, District 3, HCMC
Comments