To make sure no labor is ever lost, retailers are turning to computers to help them schedule their staffs.
New software is letting retailers use point-of-sale information to predict crowds at the checkstand and deploy personnel accordingly. Although the technology has been around since the mid-1980s, managers have only recently begun adopting the latest upgraded systems to enhance their store operations.
The transition is having a triple effect. It's letting retailers provide better customer service by changing staff shifts to meet demand. It's shaving labor costs, and it's also dramatically cutting management's scheduling
A growing number of retailers are now even installing systems to use throughout the store. They factor in time study models and other data to help forecast bakery, deli, back room and other department needs. "Computerized labor scheduling is going to become a necessity in the business because it lets us provide the correct level of service to the customers," said Sam Blaiss, manager of store systems at Bi-Lo, Mauldin, S.C. "Controlling labor costs was definitely an ulterior motive.
"Associates [store employees] are being scheduled to meet the needs of the business and not to meet the needs of the associates," he said.
John Connolly, manager of productivity at Hannaford Bros., Scarborough, Maine, said that improved efficiency and cost savings were key reasons for using computerized labor scheduling programs.
In the Northeast, "where we've got increasing competition from Wal-Marts and the clubs, and a continually sluggish economy, we need to reduce costs in order to compete effectively. That is the whole issue that has brought technology into the forefront," Connolly said.
Hannaford Bros. estimates it will save $200,000 annually in reducing the amount of time managers chainwide spend writing schedules, he added.
At Kroger Co., "we have several goals. One clearly is to make sure we have an adequate staff on hand at times when more customers are in the store," said spokesman Paul Bernish. "Other goals are to see what kind of cost savings we can have in eliminating the inefficiencies that naturally creep into very complicated systems. Labor scheduling is very complicated."
Industry sources say it is just in the past several years that these systems have been catching on on a much broader basis. Two years ago, only an estimated 20% of supermarkets had installed labor scheduling systems. That figure has now jumped to 40%.
The roster of retailers now rolling out or upgrading systems is impressive. For example, Save Mart Supermarkets, Modesto, Calif., is now testing the systems in three stores and expects to begin installing them in all 95 stores in March. In addition, Raley's, Sacramento, Calif., just completed installing a system in 65 of its stores in December. Bi-Lo is about to roll out a program to all 194 of its stores. Hannaford Bros. is rolling out systems to its 95 stores, and Kroger, which had been testing systems for a year and a half, expects to roll them out further.
Retailers cited a variety of benefits from installing the systems. Key among them was better customer service.
"It enables you to react to business trends week to week, rather than month to month," said Jimmie Torres, Raley's human resources manager. "Our main focus was to use the help we have. Basically, it helps you be aware of where your needs are more accurately than if you guessed on your own.
"If you can get better customer service, that's about the best pay back you can have. Our main focus was to use the help we have," he added.
"I think it's something that a lot of the people in the industry have wanted to do for some time, but the software wasn't sufficiently developed," said Randy Slentz, Save Mart's operations project manager. "It's a pretty complicated process when you think of the mathematics involved in generating a schedule." The software differs according to vendor, but the common denominator is the collection and analysis of information to predict optimal scheduling of labor. In general, the systems accumulate sales totals, number of items and total customers.
The data are then combined with other information, including state labor laws and the store's scheduling policies. The result is a forecast of future sales, usually in 15-minute or half-hour segments, correlated to scheduling needs. The schedules usually are churned out by the computer as timetables.
Because the software programs often analyze work volume in quarter- or half-hour segments, traditional scheduling can be shifted to more effective time periods. Employees, who may once have worked traditional 9 a.m. to 5 p.m. shifts, can be rescheduled to work 9:30 a.m. to 5:30 p.m., 10:30 a.m. to 6:30 p.m., or other time slots, based on the store's needs. Improved seasonal scheduling to meet increased demand at holiday time is also more possible.
"We had a good response from the staff. The managers like it and the cashiers and service clerks like it, too," said Connolly.
Several retailers said the software has only recently become sophisticated enough to handle their complex needs of scheduling store staff. They also said they anticipated upgrading their systems to incorporate the scheduling needs of the whole store. Some said they would even install the systems storewide.
"We've been into it for quite a while," said Larry Plourde, manager of management planning and training at Shaw's Supermarkets, East Bridgewater, Mass. "The smaller companies that had other priorities four or five years ago are just getting into it now.
"A lot of the [larger] companies I've been involved with or talked with had had some form of labor scheduling for the past three years. The smaller ones seem to be just scratching the surface now. [Cutting labor costs] wasn't necessarily the objective. It's just to get more accurate with the forecasts," said Plourde.
Although Shaw's has had systems in place for several years, the chain is just beginning to roll out upgrades to all 87 stores. The upgrades are on par with the new systems now being installed at other retailers.
"If you're really going to be into labor scheduling, you need to tie in all the departments -- meat, deli, bakery, produce. Scheduling them is more complex than just the front-end," said Ralph Beketic, president of Roundy's Milwaukee division, Pewaukee, Wis. "That's because the cashiers' schedules come right off the front-end data. When you go into your specialty department, you're more into productivity, different functions, time studies, engineering standards," he said.
Roundy's will be enhancing its labor scheduling systems in some of its stores this year, extending them storewide. "We're really looking to get into all departments, not just the front-end."
"Scan systems were a first step in cutting costs. The technology is at a point where it makes a lot more sense in the supermarket environment. Supermarkets are probably the most complicated in the retail industry in terms of scheduling," said Save Mart's Slentz. Each Save Mart has seven or eight departments and each department has 15 to 20 jobs.
"I think it's something that a lot of people in the industry wanted to do for some time, but the software wasn't sufficiently developed," Slentz said.