Operations: Demand-Driven Workforce

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Operations: Demand-Driven Workforce

12/01/2004

Centralizing labor improves productivity

Workforce management and labor scheduling have recently risen to the top of the priority list in retailing, driven by labor costs rising annually at rates higher than sales and margins.

Although fear of altering workforce processes to the detriment of customer service and sales was once a deterrent to implementing new solutions, more accurate and user-friendly software and services are now available. Also, as retailers gain a better understanding of the needs of customers and employees there is a growing need for time-saving technology solutions that help reduce labor costs, optimize opportunities and improve customer satisfaction.

Centralizing DIY Operations
"Companies are deploying comprehensive systems not just to automate administrative tasks but also to leverage the value of their investments in human capital," says Paul Hammerman in Forrester Trends 2005: HR Management Systems. Retailers like Atlanta, Georgia-based Home Depot have realized that not only is workforce optimization a great opportunity to organize its associates, but it also has the potential to improve overall operations.

The DIY giant operates more than 1,700 stores across North America that stock up to 40,000 different kinds of building materials and lawn and garden products and offer unique services including free in-store clinics for honing home improvement skills.

Home Depot learned that the key to optimizing its workforce was centralization, as it had to manage 300,000 plus associates with different store platforms.
"We're focusing on workload management and task management to ensure that our associates are executing and sustaining what we need them to perform," said Debbyn Milligan, director of operations for Home Depot at the RIS Fall Retail Executive Summit.

The retailer sought a solution that could support centralized workload planning and store communications, automate retail operations and reduce costs. It also wanted to streamline the planning, execution and compliance management of its corporate program and routine store tasks.

Merchandise, operational and loss prevention planners create programs aligned to Home Depot's strategic goals and objectives with Reflexis' Task Management software.

The programs undergo corporate reviews to ensure that work demand matches store capacity and are then launched to the stores. The solution also provides store managers with dashboards from which they can review planned work and report status, with real-time execution visibility to all levels of the enterprise.
With the help of Reflexis Risk & Audit Manager, Home Depot conducts store walk audits and self-assessment surveys, ensuring compliance to policy, risk management and legal requirements. The information gathered provides vital feedback, enabling improved future planning and execution.

The solution is flexible enough to allow store managers to make modifications when necessary. Managers are able to look at scheduling from a three-month perspective, a one-month perspective and then weeks out as time progresses.

"A perfect example is the large number of adjustments we made during the hurricanes in Florida, to keep our stores open and to insure we were able to service the customers that needed servicing," said Milligan.

"That was not included in our forecast in any way," she continued. "The ownership would have to reside at the store for those types of events, whether it would be a planned sales promotional event, a community service event or in this case, a natural disaster. We need to keep management in tune with what's happening so they can plan and schedule the associates to ensure that we're meeting the sales demand."

The implementation has enabled the retailer to streamline communication of nearly 250 projects a month to stores throughout the enterprise. Home Depot has also benefited from reduction of store task overload because of improved workload and labor planning.

"We're moving towards a more centralized model," concluded Milligan. "We're enabling and developing the right system solutions from our centralized focus and our store support center to ensure that we're allowing the store managers to focus on what's important, the customers."

Transparent Workflows
As enterprises grow larger and employ more associates, it becomes even more important for retailers to deploy consistent communications. Staples, the $13 billion office product retailer, trains its nearly 60,000 associates to make it easy for businesses to buy the supplies, technology and services they need to run their offices. The retailer learned the importance of coherent communications throughout the enterprise, and like Home Depot, realized centralization was imperative to improving customer service.

"We found that we really needed to strengthen the consistency of information deployed to managers and associates to ensure that everyone had one version of
the truth," said Keith Gregg, Staples' vice president I.S. retail commerce at the RIS Fall Retail Executive Summit. "Only then could we expect associates to execute the tasks at hand."

The company also selected Reflexis' workforce management solution to help consolidate and streamline the communication of tasks to stores across the enterprise, deliver real-time visibility into store execution and compliance, and improve the efficiency of store and field managers.

Streamlined workflows ensure that planning of store tasks receives necessary business sponsorship reviews and store communications workload balancing before being launched to stores. Stores report task execution status through dashboards to deliver real-time status visibility to corporate and field managers.

Tasks are assigned for the stores while managers are given the information around their sales trends, but they have the ability to manage locally within boundaries.
"An interesting concept of bankable hours has been introduced to the store managers where the forecast is basically fixed for them," concluded Gregg. "The solution balances control and provides the transparency necessary for everyone to see what the balances are, how they're running locally within their redefined guidelines."

With the new solution, Staples
has achieved consistent centralized communications resulting in $1.5 million in soft savings while streamlined surveys have resulted in $460,000 in hard savings. The solution's real-time visibility saves store managers seven to 12 hours per week.

"Looking forward, we will see increased use of employee-facing online services, workforce scheduling, and bolt-on components to supplement the core system functionality," predicts Hammerman.

Visualizing Improvement Workforce optimization solutions are critical to effective customer service. Best Buy Canada, which operates stores throughout British Columbia, Alberta, Manitoba and Ontario, prides itself on bringing consumers a positive shopping experience that focuses on interactivity and no-pressure browsing.

Offering technology and entertainment products designed to improve people's time, Best Buy's non-commissioned employees are Smart Friends, helping customers find the products and services that best fit their needs.

To maintain its current levels of customer service, the retailer sought an optimized Web-based scheduling solution as part of an internal strategy of overall
process improvement.

Best Buy Canada selected Kronos' Workforce Central suite as part of its overarching corporate optimization strategy aimed at further increasing store productivity and customer satisfaction. The company-wide rollout included 13,000 associates in more than 130 stores across Canada under the brands of Best Buy and Future Shop.

With the solution, the retailer has benefited from increased availability and access to store productivity data, enabling the company to achieve its strategic goals. Immediate added value benefits include higher visibility into actual time worked compared to hours scheduled and the ability to make ad-hoc schedule changes. Kronos' enterprise scheduling functionality gives Best Buy Canada a visual representation of the workforce to reveal actual workforce resources and immediately identify gaps in associate coverage.

"The solution offers the feature and functionality advantages for workforce management technology that improve how our associates spend their time," says David Zinman, vice president of corporate operations at Best Buy Canada. "With this solution, we can be assured that our associates are focusing on the highest value tasks such as helping our customers find the products and services that best fit their needs."

One of the biggest challenges in today's competitive retail environment is balancing the conflicting demands of providing better customer service, reducing labor costs and increasing employee satisfaction. To achieve this balance, retailers must invest in workforce optimization strategies so they can ensure the right staff is working at the right time, and at the lowest possible cost.