COMPUTERS ARE SAVING HOURS

JONNA CRISPENS

Computerized labor scheduling has become firmly entrenched in the supermarket landscape as a growing number of retailers recognize its power to reduce labor costs, free managerial time and improve customer service.

Almost all retailers contacted by SN said they were using such a system or were planning to do so.

The value of automated labor scheduling, according to one retailer, is that it "deals with the facts," taking into account "historical traffic patterns and the like."

"Anything that's computerized is a winner in my book," said Robert Stratton, director of management information systems at Megafoods Stores, Mesa, Ariz. "A computer can work about 10 times as fast as the typical person."Here's what retailers contacted by SN had to say about computerized labor scheduling:

Charlie Roach

assistant VP, MIS

Basics/Metro Food Markets

Randallstown, Md.

We're entering the initial phase of a chainwide rollout of a computerized labor-scheduling program for the front end of our stores. We hope to start testing the program in a simulated laboratory environment, expand to a one or two store test by June and roll out the concept to all 15 stores by fall.

Although we're not sure what type of payback the program will bring, we expect to reduce labor hours, divert management hours to more productive areas and improve customer service.

Right now, our managers spend a good deal of time developing schedules. Our Metro stores have about 200 employees each, and our Basics stores have about 60 to 70 each, and we're unionized, so scheduling is a major task.

If we can reduce our labor costs, that's great. If we can improve customer service without reducing labor costs, that's great, too. If we can improve customer service and reduce costs, we'll throw a party.

Bill Scheer

supervisor, retail automation team

Spartan Stores

Grand Rapids, Mich.

As a cooperative [wholesaler], we offer software packages to our member companies. Although only 27 of our member stores are using a labor-scheduling program, we expect the number to reach about 100 within two years.

That's because we're introducing a new program that's made by the same manufacturer that developed the time-and-attendance program currently used in 200 of our member store locations.

On April 15, three retailers began one-store, storewide tests of the new program and two of those companies are expected to roll it out to their other stores by the end of September.

Labor scheduling allows retailers to reduce labor costs by freeing management time and scheduling employees more effectively. It can provide additional time savings for our unionized member company stores, which have to abide by contract rules. The program also leads to improved customer service by scheduling the right number of employees during busy times.

Howard Vork

manager, labor planning

Supervalu

Minneapolis

We developed our own labor-scheduling program about 10 years ago, which we use in all our corporate stores and supply to about 400 of the independent retailers we service.

It reduces costs and improves customer service. We've found that a typical store can reduce labor costs 0.5% by using the program. It works because it uses historical records to predict traffic flow, making it an objective system, rather than a subjective one.

Although our program is capable of scheduling an entire store, our corporate locations haven't used it storewide up to now. We're in the process of changing that, however. Our goal is to implement the program storewide within two to three years.

All our corporate stores are currently using labor scheduling for their front-end departments, but it's a mixed bag after that. Some are also using it in their grocery, dairy, and/or frozen food departments.

Those departments, along with the front end, have the potential for creating the greatest return on investment. They represent about 65% of a store's labor requirements and have the greatest potential for inefficient labor scheduling.

In order to bring the entire store on line, we're establishing labor standards for such departments as deli, bakery, meat, seafood and produce. Our program can accommodate up to 30 departments, with 200 people and 500 fixed activities per department.

When we expand the program storewide, we'll also interface the system with the cash registers, direct store delivery and order entry.

William Ojendyk

labor scheduling consultant

Thrifty Foods

Burlington, Wash.

We're planning to roll out a labor-scheduling program in all 25 of our stores within the next six months. The program uses front-end sales information fed directly into the system to determine how many employees should work at particular times based on past traffic histories.

Before reaching that stage, however, we have two other, less sophisticated stages to reach. The first, which we're setting up now, prints the exact schedules that are entered into the system. It doesn't determine how many hours should be worked, when they should be worked and who should work them. The second phase, however, will make those determinations based on front-end sales information that's entered manually into the system each day.

It's not until the final phase that the true savings are realized. That's when schedules are generated without daily sales data and other information being entered.

Once the system is operating, it will probably save the chain about 3,500 hours per year in front-end labor. That, of course, is the ideal scenario. In the meantime, part of the challenge is creating labor standards to feed into the system.

Everett Muterspaugh

VP, operations

Pay Less Supermarkets

Anderson, Ind.

When we first started using labor scheduling, our front-end costs dropped about 10% and they've stayed down.

The value of labor scheduling is that it deals with facts. It takes into account historical traffic patterns and the like. It lowers labor costs and improves customer service.

For example, when summer vacation starts for children, we see a change in customer shopping habits. Our managers know this happens, but if they're creating a schedule without using a computerized program, they're guessing to a certain degree.

A [computerized] program, on the other hand, can accurately predict what the customers' new habits will be. We've also seen the time it takes to create schedules drop from five-to-six hours to an hour or less with the program.

Larry O'Donnell

labor scheduling coordinator

Hughes Family Markets

Irwindale, Calif.

Computerized labor scheduling is definitely something that a supermarket operator who wants to be successful should have. It helps create a strong reputation for the company by ensuring faster checkout lanes and better overall service.

The main benefit of the program is customer service. By accurately determining customer traffic patterns on half-hour intervals throughout the day, the system creates schedules that meet the challenge of heavy traffic times.

Scheduling labor more efficiently doesn't necessarily reduce labor costs, but it does lead to improved operations and customer service. For example, by scheduling enough employees when there are a lot of products to be priced, companies increase the likelihood of pricing accuracy. As a union company, we also realize additional benefits from computerized labor scheduling. The program takes into account our seniority list, recognizing such rules as the restriction on scheduling new employees for more hours than those of higher seniority.

Bill Borer

director, retail information systems

Seaway Food Town

Maumee, Ohio

We're looking into various program options, trying to determine which is best for us. Our first step, however, is likely to be the implementation of a time-and-attendance program. We want to crawl before we walk.

We'll probably test a time-and-attendance program in two to three stores and then roll it out chainwide. We haven't set a test date, but I wouldn't be surprised if we began testing the concept by year's end.

As a program, time-and-attendance can really free administrative time and create labor savings. By freeing managerial time, store managers can focus on customers and employees and have more time to pursue their ultimate goal of increasing sales.

Robert Stratton

MIS director

Megafoods Stores

Mesa, Ariz.

We plan to start a one-store test of a storewide labor-scheduling program within the next six months. After that, we'll probably move to a five-store test, and then to a chainwide rollout.

We expect the biggest benefit to be reduced labor costs. We're an everyday-low-price company, and we cater to a large number of lower-income consumers, so we have to run a lean and mean operation. Once computerized scheduling is implemented, we expect it to free about six to 10 hours for each store manager.

Our stores are open 24 hours a day, which creates more consistent traffic patterns, and customers bag their own groceries, so long checkout lines aren't really a problem.

I don't think small chains should necessarily invest in computerized labor scheduling, but those with 40 stores or more should definitely consider it. It's a great tool for managing overhead.

I don't know when the system will pay for itself, but I wouldn't be surprised if it's one to one-and-a-half years after it's been fully implemented. Anything that's computerized is a winner in my book. A computer can work about 10 times as fast as the typical person.

Ken McClure

data processing manager

Ingles Markets

Black Mountain, N.C.

We don't have a labor-scheduling program right now, but we'll probably implement one within 18 months. Right now we're concentrating on a time-and-attendance program, which we plan to test within the next six months in one or two of our stores. Both programs will create a significant savings.