LUND FOODS SAVES WITH COMPUTERIZED LABOR SCHEDULING 2004-06-28 (1)

LIZ PARKS

EDINA, Minn. -- Lund Food Holdings has been running computerized labor scheduling for the front end of its stores for about a year, and might expand the program to other areas of operation, including Center Store and production facilities.

Paul Bergstrom, director of retail operations for the 20-unit supermarket independent, said the program, JDA Software's Portfolio Workforce Management application, formerly called Timera, has been very effective.

"We're very service-orientated, and the reason we did it in the first place was to create an even higher level of service for our customers," said Bergstrom.

When retailers schedule closer to their anticipated demand, "they can optimize their labor while still providing the same or better service. And that is happening right now," stated Scott Langdoc, vice president of research on the retail industry, AMR Research, Boston.

Past investment in demand-forecast technology is allowing retailers to use that data to feed labor systems, then use that information as a variable for deciding when labor should be in the store.

"Labor costs, when you look at what [happened] in California, are significant contributors to the differential between what Wal-Mart can operate at and what other grocers can operate at," said Peter Charness, senior vice president of global marketing and chief product officer for Scottsdale, Ariz.-based JDA Software. "I believe it can be as high as a 30% price differential on labor."

Labor planning, budgeting and scheduling programs can help grocery retailers close that gap, he added, by helping get "more efficiency out of labor dollars through more optimized scheduling."

Before Lund Food Holdings implemented the computer-assisted labor-scheduling program, Bergstrom said it was taking the chain's front-end managers about a day, eight hours in any given week, to write out a schedule for their employees.

"Computerized scheduling has really knocked that down to about three hours," he said. "The big benefit is that our managers now have more time to be out on the floor helping customers and training cashiers."

Computerized labor scheduling has also helped Lund managers ensure they have their sales associates in the store during the hours when they are most needed.

"When you have computerized scheduling, it prompts you to look at the hours where help is most needed. If a manager schedules someone from 10 a.m. until 3 p.m., it will tell you that you don't need another person during those times," said Bergstrom. "It will say you need them between 4 p.m. and 10 p.m., for example. It makes sure we have people in the right places at the times we need them."

Computerized labor scheduling applies to all areas of a retailer's operation, but in Center Store, the demand data that drives the labor scheduling programs can be used to identify what products consumers are buying so the retailer knows what issues they need to deal with in terms of stocking requirements, Langdoc of AMR said.

"In terms of customer volume, that data -- fed into labor systems -- will give you an indication for what your staffing requirements need to be to provide service," he continued. "When we talk about competing with Wal-Mart, it is as much about reducing the cost of labor as it is about making sure the right labor is in the right place. That's why the demand-forecasting element becomes so critical. You want to make sure that you've aligned or optimized labor for the particular areas of the store that you know demand requires."