Magazine Article | December 1, 2004

Minimize Labor Costs, Maximize Customer Service - Simultaneously

Source: Innovative Retail Technologies

A METRO Group forecasting and scheduling pilot achieved 3% to 7% employee productivity gains, but customers were the real beneficiaries - POS lines are down 50%.

Integrated Solutions For Retailers, December 2004

With 2,300+ stores and nearly a quarter of a million employees to manage, METRO Group is Europe's third largest retailer and the fourth largest worldwide. The company comprises a variety of formats and concepts including grocery, hardware, c-store, and department stores under the monikers Metro Cash & Carry, Real, Extra, Media Markt, Saturn, Praktiker, and Kaufhof.

In 2002, 25-billion-euro Metro Cash & Carry, a 77,000-employee division of METRO Group, began taking a hard look at its employee scheduling and forecasting methodology. It had largely been handling these tasks at the store level using paper-based schedules, Excel spreadsheets, and regional software solutions. Schedules were mostly based on historical sales figures. When sales were expected to spike, store managers would respond by increasing staff. But Berthold Steur, project manager at Metro Cash & Carry, says his company was convinced that putting this approach under the microscope would reveal inefficiencies that could be addressed with the implementation of a labor scheduling and forecasting tool.

In March 2003 the company began a select-store pilot of Workplace Systems' (Rooksley, Milton Keynes, United Kingdom) labor scheduling and forecasting software after an intensive review of solutions. While initially the tools would be rolled out only to checkout employees, the time-intensive project began with a seven-month design phase, followed by nine weeks of active implementation. After approximately four weeks of briefing upper level management on the impending project, a week-long store preparation period began. This included the distribution of program data and system workload testing and was followed by a week of store management reports training and uploading of employee data such as skill sets and scheduling flexibility to the system's Oracle 9i database. Week seven was spent fine-tuning the data in the system, and by week nine the system and a dedicated help desk were live.

Better Workforce Forecasting = Shorter Lines
While the goal of the project was to increase the efficiency of its workforce and test a standard, harmonized solution for forecasting and scheduling applications, Steur says customers were the big winners. The company's overarching POS mantra is to have no more than one customer waiting in line when one is being served. A well-forecasted workforce took the test stores a big step toward this lofty goal when they realized a reduction of more than 50% in customer queues. Many retailers have struggled to maintain customer service in the wake of a project designed to maximize workforce efficiency. Metro Cash & Carry's test stores actually improved customer service while realizing labor savings between 3% and 7%. Meanwhile, some store managers benefited by spending up to 20 fewer hours per week, per department building forecasts and schedules.

Steur says the key to this balance was the ability to build schedules based not simply on sales, but on item, invoice, register, customer service, task management, and historical data, among others. He expects that as the rollout moves forward, greater efficiencies will be realized by an interface to the company's SAP HR and financial systems.