Squeezing More Out of Scheduling

Jamba Juice has been delighting guests with delicious, fruit-filled smoothies since 1990. The chain became an instant success in warmer climates and synonymous with popular culture, achieving near-iconic status when an episode of “The Sopranos” centered around Tony Soprano becoming a partner in a Jamba Juice franchise.

The burgeoning chain now has more than 730 locations and is launching a new food menu of wraps, salads, flatbreads and fruit tea infusions to complement its existing line-up of smoothies, hot oatmeal and baked goods.

Such growth has not been without its challenges, however. On the labor side, Jamba Juice required a more efficient and automated way to deal with constantly changing labor laws, minimum wage hikes and reporting issues involving minor employees. It also needed a more efficient scheduling system as part of a larger store hours strategy.

“We’re working hard to mitigate the impact of seasonality and trying to be more consistent in our scheduling throughout the year,” says Robert Notte, Jamba’s vice president of information technology. “Our business needed a system that could be agile and adapt based on a sales forecast and trends.”

The system had to stay compliant with the ever-changing labor laws in all the states and provide up-to-date labor data. For the brand’s district managers, there was a tremendous need for real-time information that could be accessed remotely. The company’s former system could not show statistics until days later, when it was too late to make employee-scheduling decisions.

“As our labor models and labor standards change, we needed a way to roll that out quickly and efficiently to the field,” Notte says, “so having something that was centrally managed was key.”

Jamba chose Kronos and, in less than a year, a labor reporting system was rolled out to all 500 corporate stores. And despite a few technical hiccups, the brand immediately saw improvement in controlling expenses and optimizing processes.

“We were looking for efficiencies and savings,” says John Hopkins, Jamba’s senior manager of store operations and logistics. “We now have an ability to optimize our store operating hours and make sure that our team members are in the store when they’re needed.”

The solution helps stores audit against target performance.

“If you look at it from a fixed-labor component, the solution is really simplifying the role of the GM and making sure that the fixed labor component is as tight as it can be,” Hopkins says. “This would include pre-opening and post-closing activities in the store. It effectively allows you to close a little earlier or open a little later, thereby saving dollars.”

Federal, state compliance
In California, for instance, where the state minimum wage is higher than the federal mandate and there are a number of restrictions involving the employment of minors, the system has been greatly appreciated.

With government or union regulation comes compliance, which can be “particularly problematic in organizations that don’t have an automated workforce management solution,” says Kara Barker, director of retail and hospitality industry marketing for Kronos.

According to a recent AMR Research report, half of retailers admit to having been found non-compliant with federal, state or union regulations within the previous 12 months: 47 percent say they have received an employee complaint about their pay over the past year, and on average the organizations found in non-compliance paid $250,000 related to the penalties. This amounts to “big problems” that could easily have been prevented, Barker says.

Still, the real benefit to implementing the system is found in the profit and loss columns. Given the current economic climate, retailers can’t afford unnecessary expense, Barker says, and “with the Kronos solution, a retailer can almost entirely eliminate overpayment. We can help address over-scheduling, anticipating demand in a particular store and making sure that the staffing levels are appropriate to meet demand.”

Predicting demand
Retailers that staff manually frequently end up short-staffed at their busiest time or over-scheduled during a slow period. The result? “Your customer service levels will suffer and your retail sales will suffer,” Barker says.

Kronos’ forecasting and scheduling module helps Jamba Juice predict demand for a particular window of time. It could forecast dollars or items sold; “it really depends on the customer we’re working with,” Barker says. “Our solution helps develop that forecast, and based on the forecast demand, it helps an organization like Jamba make sure that they have the appropriate number of people working a shift.”

During a stretch of summer forecast to be unusually hot, for instance, Kronos enables a GM to adjust her store sales forecast to account for intra-week and intra-day changes.

“Before, we had to pull numbers from different reports and put them in the other reports to really get line-of-sight data,” says Matt Kafka, Southern California area district manager. “The fact that the information is all streamlined [means that] we can get that real-time information on the labor performance.”

Ultimately, however, the performance of this or any solution is measured by store sales. What’s the return on investment associated with the Kronos workforce management solution?

“I can’t put a dollar figure on that right now,” Notte says, but “we’re very confident that it added a significant amount” to Jamba’s overall operations strategy.