Scheduled Improvements

A major challenge that many retailers face in acquiring and rebranding existing stores is bringing the workforce up to speed on company culture. When it bought 130 supermarkets from Albertsons in 2006, Modesto, Calif.-based Save Mart decided it was time to implement a uniform workforce management solution that could handle labor forecasting and scheduling for 13,000 new employees.

In February 2007, director of retail efficiencies Steve Gaines and his team formed a post-integration schedule that flagged the labor scheduling application as one of the most critical parts of the transition of the former Albertsons stores, which were being re-branded as Save Mart and Food Maxx. While the company had worked with Tomax for years, it was long overdue for a software upgrade that could continue to grow with new locations.

“We had a few options,” Gaines says. “Go with the 13-year-old technology we already had, use an unsupported Albertsons technology or start with something new. We were already looking for a new way, so this just pushed [the timeline] ahead by two years.”

Tomax’s Retail.net solution controls critical activities from headquarters to stores and enables pre-season planning, demand forecasting, inventory optimization, operations management and labor scheduling. The Tomax Workforce Management Solution supports labor forecasting, scheduling and time and attendance processes for more than 1.5 million employees in 7,800 stores across the United States.

Retail.net Workforce Optimization breaks store-specific demand into 15-minute intervals, then matches those needs with the skill level and availability of the store workforce. Through labor scheduling, time and attendance reporting and operations support, the solution helps retailers connect corporate strategy and store execution while ensuring strategic compliance, appropriate staffing and effective labor management.

“Over time, we have achieved levels of precision that would put the supermarket area of retail at the forefront of what is possible in workforce optimization technology,” says Tomax CEO Eric Olafson.

In addition to trimming labor costs, workforce optimization can play a major role in improving the customer experience by ensuring that “the right people [are] in the right place at the right time,” he says. This can be particularly true in the perimeter departments of a supermarket. “Maybe the butcher shouldn’t leave right at 5 p.m. and maybe they shouldn’t start baking muffins at 4 a.m.,” Olafson says.

Centralized, yet adjustable
With hundreds of stores scattered over a wide area, all with their own unique needs, a centralized workforce management solution is a must for corporate oversight at Save Mart. The previous solution sat on the server of each individual store and prevented system-wide continuity and visibility. The new system, while centralized, allows store-level managers to adjust scheduling to meet the changing needs of their locations.

“It is customized by store,” says Save Mart labor scheduling analyst Tony Kirst. “Whether it is customer size or item size, the system and store data can recognize that and adjust the volume. We can customize activities and jobs to meet the store’s needs.”

Connecting the dots between what corporate wants and what on-the-ground managers need has always been a challenge in centralized labor scheduling solutions. In the past, it could take up to three months of transaction analysis to get a true feel for demand; with its background and research in forecasting, Tomax can now gauge it with fair accuracy from a phone call or simple survey.

“The profoundness of getting that is so significant that, in our opinion, a retailer should first work on workforce optimization because the benefits are so fast and significant,” Olafson says.

Because the former Albertsons stores were doing little more than changing brands, Save Mart was able to tap into the stores’ existing data to predict demand once the stores were reopened. For each store, the system was loaded with 22 weeks worth of averages, which established the basis for automated scheduling of cashiers and service specialists.

Key infrastructure
One by one, the stores were gutted of their technology infrastructure, from telephones to POS systems, then rebuilt using the Save Mart model. “All of our [corporate retail efficiency] resources were in the store [for] one week and then they were on their own,” Gaines says. “The labor scheduling tool was one of the key pieces of infrastructure that allowed us to do that successfully.”

According to Gaines, shifting over to the new system was like “going from a Vespa to a Ferrari.” With so much success at the converted stores, Save Mart immediately implemented the Tomax solution in its 114 other Save Mart, S-Mart Foods, Lucky and Food Maxx stores. With the ability to support all stores from its headquarters in Modesto, the increase in efficiency has been astounding.

“Anybody anywhere can access the system now, whereas before it was just at the store location,” Kirst says. “A corporate administrator can control the system within the guidelines of labor relations instead of having everyone on a different system.”

With the company’s labor expenses running close to $1 billion per year, Gaines estimates that Save Mart has realized savings of up to $20 million. An additional benefit has been that Save Mart was able to avoid layoffs during this economic downturn by applying belt-tightening efforts to labor management.