RILA 2019 Link Conference Recap

On February 24-27, 2019 The Retail industry Leaders Association (RILA) held their annual conference in Orlando, Florida. As a first-time attendee, I found that the conference delivered on its promise of engaging topics. There are a couple of themes and three specific sessions that I found particularly impactful.

In terms of themes, the one topic that was on top of mind in most sessions was labor. This manifested itself in conversations around sourcing, developing, managing and retaining labor in an era of extremely low unemployment.

Gary Maxwell, from Dollar Tree, laid out a simple yet effective strategy for combating the recruiting challenges experienced by those in the Supply Chain and Warehousing industries.

He recommended:

  • Expanding the recruiting pool by going after non-traditional workers
  • Connecting jobs to a higher purpose to combat some misconceptions about the quality of the work
  • Selectively automating functions to reduce the physical demand of the job

In a panel session, Chris Bright VP, Supply Chain Operations for Nordstrom highlighted the need for companies to consider the cost of attrition when planning their labor needs. He drew the analogy between a labor model and a car, where technology provides the power, engagement is the fuel, but culture is the transmission that allows all the potential to become reality. He also emphasized the need to focus on people to achieve operational goals.

There were numerous wonderful discussions and presentations from Dick Johnson of Footlocker, Arthur Valdez of Target, and Dean Carter from Patagonia among others…But, the presentation that stood out the most for me was from Barbara Kahn of The Wharton School of Business.

Barbara spoke on the Shopping Revolution and outlined a model to help explain, among other things, the emergence of Amazon as a world power. She outlined four strategies for differentiation, and showed how successful companies dominate one, leverage it to become a leader in another, then maintain a “good enough” position in the other two. The four quadrants in her model break down between product benefits and customer experience on one axis and increasing pleasure versus eliminating pain on the other axis.

The four quadrants are:

  Product Benefits Customer Experience
Increase Pleasure Brand (i.e. Zara) Experiential (i.e. Sephora)
Eliminate Pain Points Low Price (i.e. Walmart) Frictionless (i.e. Amazon)

Suffice it to say, I am excited to read her book, The Shopping Revolution: How Successful Retailers Win Customers in an Era of Endless Disruption.

I found the RILA 2019 Link conference to be of tremendous value and cannot wait to go back next year. I would highly recommend it to anyone who is looking for a fresh perspective on the current state of the Supply Chain industry, who enjoys networking with other senior executives going through similar challenges, or for anyone with an inquisitive mind who just enjoys learning.

Current Trends and Business Challenges in Supply Chain Labor – Part 1

Last week, several Connors Group Consultants were in Chicago for the JDA Autonomous Supply Chain and Workforce Labor Summit. As a sponsor of the event, we were very pleased with the turnout and content. The speakers presented case studies and industry insight that helped frame deeper conversations with our industry peers and clients.

During our panel discussion, Connors Group provided a summary of the Current Trends and Business Challenges in Supply Chain Labor

Here is what we are seeing…

Staff Sourcing and Retention is a recurring challenge for all industries, but retail and distribution seem to be feeling the brunt of the tight labor market. High-quality workers are hard-to-come-by and turnover continues to escalate as workers leave for higher wages, the promise of better schedules and work environments…Some of the trends we are seeing to address staffing and retention issues are employee engagement initiatives, performance recognition, schedule equilibrium, and reward programs.

Another challenging area is with Forecasting Labor Demand. Inaccurate forecasts are causing wide swings in labor demand, primarily at the day level, but weekly challenges also exist. We are also seeing an uptick in special events and promotions becoming more difficult to accommodate using current forecast models…To remedy this, most of our clients are seeking assistance in researching and implementing systems that can forecast a variety of complex labor models and scenarios, no matter what time of year or event.

Schedule Optimization is also an issue… “We have heard several DC managers say that they still create schedules like they did in the 1950’s, with fixed shifts, that neither adjust for demand, nor easily accommodate for the changing labor market.” Says, Ty Law, Senior Director and Labor Specialist. He adds, “The workforce management scheduling systems coming to this market both optimize shifts based on labor demand as well as generate schedules that are equitable for the employees – which helps drive retention”.

The bottom line…

Labor continues to be the largest controllable cost in warehouses and distribution centers. As a result, companies must continuously reassess their current processes and technology, while looking for new ways to maximizing the value they get from their labor investment.

In Part 2 of our follow-up, we will discuss the specific ways that best-in-class companies are tackling these challenges in the workforce today.

Crawl-Walk-Run to Distribution Labor Management Success

Crawl-Walk-Run to Labor Management

Labor Management System (LMS) implementations are often considered a technical challenge.  Often overlooked, however, is the cultural change component that requires a patient, phased implementation approach.  LMS implementations require IT integration and engineering effort to ‘go-live’, but what sets them apart from other technology enablers is that they are truly a people-centric program focused on your most important asset – your workforce.   To achieve long-term, sustained success we typically advise companies follow a crawl – walk – run strategy for their labor management journey.

Crawl

The crawl phase is all about the basics.  Many core operational practices can be developed or updated well in advance of going “live” with an LMS.  One such example that many companies miss, is to prepare the workplace and standardize work methods.  This is where time tested Lean approaches such as workplace organization (5-S) and standardized work methods can yield significant improvements; often in the range of 5-15% improvement.  The largest intangible benefit is that by engaging the workforce and physically improving the workplace and work methods, the culture begins to change.  This paves the way for positive change and develops momentum for a successful labor management adoption.

Walk

Once the foundation is in place, goals and expectations need to be established to track progress.  A simple way to start this process is to develop “Reasonable Expectations” (RE).  An RE is an expression of work output in units of measure per hour (e.g. cases per hour, units per hour, or pallets per hour).  The major benefit of REs is that they are easy for managers, supervisors and associates to understand.

Once Reasonable Expectations are determined and understood by supervision, employees can begin to be held accountable.  Implementing initial REs allows supervisors to build proficiency in holding employees accountable to more specific output expectations.  Supervision should start by focusing on observing compliance to standard work methods, as opposed to immediately focusing on a number.  This coaching shows employees that supervision is committed to their success and builds a deeper level of trust and engagement.

After employees are making improvements through adherence to standard work methods and performance feedback, the REs can be used to build simple staffing models to better predict the requirements of the business.  Many times, this is as far as many organizations need to go.

Run

Companies that have properly prepared themselves through the crawl – walk phase are positioned to take the next step in the journey by utilizing an LMS technology solution for improved planning and reporting.  Though, it should not be taken lightly as many companies struggle, and even stop mid-implementation due to underestimating the technical and cultural challenges.  Careful planning, cross-functional involvement and project management are essential to ensure a successful implementation.

In this phase where technology is introduced, transparent communication is critical for complete buy in.  Everyone impacted should have regular touch points and be brought along through the project for a smooth implementation.  To achieve fair and accurate individual performance expectations, Engineered Labor Standards (ELS) are typically developed and travel is configured in the LMS.  This allows the LMS to dynamically track the accurately credit an individual associate for the work that they complete.  Associates should be actively engaged in this development process so they understand what is included in their performance expectation.

A key component of the implementation is to thoroughly test and validate the system results prior to going live.  The validation process should include the operations team to transfer knowledge of how the system is structured.    This ensures they understand how the system generates performance and the accuracy of the results.  A rushed implementation that does not thoroughly test the LMS and include the operations team in the process risks losing complete confidence of the standards and reports.

Lastly, Supervision must be trained on providing effective performance coaching conversations. Rather than simply letting someone know they are not meeting the expectation, individual performance management coaching helps associates understand the specific reasons for not meeting performance expectations and, more importantly, how to improve.  When performed correctly, coaching is the key to improving overall performance.

Labor Management System implementations can result in an improved, fair and equitable work environment, lower turnover, and productivity increases of 15-30%.  These results are not automatic and require investments of time and money to achieve savings.  Think of a LMS like a gym membership – you only get out of it what you put into it.  If you want to positively change the culture and achieve long term success, you need to develop a roadmap to reach your goals – a roadmap that goes from crawl to walk to run.

Retail Expectations: Three Takeaways from Reflexions

The Reflexis annual users’ conference was held at the Cosmopolitan Hotel in Las Vegas from September 15 to 18, 2015. This was the largest Reflexions program to date, with more than 150 attendees from over 50 retailers attending the three-day event. Connors Group was a first-time sponsor of the event, which was time well spent learning and hearing from Reflexis clients regarding case studies and best practices. Additionally, Reflexis reviewed and launched the latest and greatest enhancement to their product offerings. It was great to be there alongside other partners such as IBM, NOMi, CMITIME and Bluebird.

CO-PnruVEAACFcn.jpg-large
Read more