Beyond Development…Integrating Engineered Labor Standards into Your Business

Here is an all-too-often familiar scenario…

Your organization has just completed a project to develop Engineered Labor Standards, and chances are that either your organization has never had standards or has not revised them in quite some time…

Obviously, this was not merely an intellectual exercise to keep your engineers busy. There was a strategic reason for developing or updating the standards.

So, what happens next?

There are typically two broad categories of application for labor standards. One is operational and involves using the standards to help generate schedules for stores that are unique to their individual labor demands. The other is financial and involves using the standards to help forecast the actual cost of labor for different budget scenarios.

Developing Labor Schedules:

Accurate labor schedules are an underpinning of effective store operations. The process to generate effective schedules can vary from retailer to retailer. Mall-based retailers with small footprints may be able to get by with predominantly “fixed” schedules that ensure minimum coverage is in place during open hours. Larger retailers will be highly variable depending on customer flow, product flow and other activities (like visual merchandising and marketing) in stores. For anything other than the most basic of retailers, it is usually best to employ a Workforce Management (WFM) system to help managers generate accurate schedules.

Integrating Labor Standards into a Workforce Management (WFM) Application

WFM systems use standards, coupled with a forecast engine to determine when certain drivers (such as customers, shipments, plan-o-grams, etc.) will occur, to determine finite labor demand, often down to the 15-minute increment level. Other factors such as skillsets, scheduling rules, job roles and availabilities transform this demand into actual shifts and schedules. Let’s assume you already have some WFM solution in place to generate optimized schedules for your stores. You must now integrate your newly developed labor standards into the WFM solution. Most WFM systems default to a static table within their software to house labor standards. Another option is to house your standards in an external system or database, then integrate it into the WFM through a robust API.

Why use ANOTHER system to house our standards?

The optimal way to manage labor standards within a WFM environment is to have them reside in a tool / application specifically designed to house labor standards and to integrate into a WFM application. The primary benefit of using a tool like this, since such tools are designed specifically for labor standards, is that it makes maintenance much easier.  In any business environment, changes will occur that require you to make updates to your standards. For example, a process may change due to a technology enhancement. This may involve making a change inside the standard rather than a wholesale replacement or global update. These changes can be made manually if you do not have a tool, it is just a much more arduous process which often leads to the changes not being done on a regular basis. Labor standards tools facilitate these changes very efficiently.

Another benefit of using a purpose-built labor standards system is that it facilitates functions like peer grouping and store attribute tracking. There are normally physical, demographic or technological differences between stores that change the labor requirement for similar tasks. For instance, a mall location might experience much higher traffic, but lower conversion (i.e. more “browsers”). The standard for recovery per traffic might be different for mall stores versus stand-alone locations. This requires that these attributes are housed in one location that can be easily monitored and audited when changes (i.e. relocation) occur. Having “one source of truth” in a labor standards system facilitates this process.

Finally, labor standards systems typically have been designed to integrate with most of the major WFM solutions on the market, so the process is straightforward to achieve integration. If you do not have a tool and you are using, for example, Excel, integration can still be achieved by an export and manually inputting the file into your WFM application. This is certainly not the optimal method, but still feasible. The point is, you should be thinking ahead at the beginning of your labor standards project to how you will ultimately integrate your standards into a WFM application.

Financial Modelling:

Just as accurate labor standards are an underpinning of effective store operations, they are also a critical piece of effective financial planning and analysis regarding labor. An accurate picture of how much labor is required in stores, particularly in discrete detail down to the task level, allows a series of intelligent decisions to be made; a reconciliation between labor demand and available budget reveals productivity challenges, underfunding and ramifications to the service model. However, it is critical that this process is not oversimplified. Consider how WFM systems use standards to generate schedules. If, in financial analysis, standards are simply applied against historic drivers (traffic, transactions, units sold, etc.) then the true labor demand can be greatly underestimated.

Understanding the Difference Between Labor Demand from Standards and Creating a Schedule

It is critical to remember that standards are only one piece of the puzzle and the hours that are used to schedule will be different than the simple application of forecasted drivers to labor standards (also known as “Raw Hours”). Typically, the hours scheduled will be higher. There are various reasons for this. Let’s examine a few:

Minimum Staffing Requirements

There are many reasons why a retailer would want a specific store or department staffed with a minimum number of store associates regardless of what the forecasted labor demand is. It could be due to safety related concerns (you may never want an associate working in a store alone). It could be for loss prevention reasons (maybe you have a high-shrink department). It could be strategic (you want to grow a business segment) or it could be just the physical space of an area would make it more desirable to have a minimum coverage requirement. If you have minimum staffing requirements, you would then configure your WFM scheduling application to ensure there is always the required staff schedule even during times when the workload (as determined by standards and driver forecast) would not dictate those hours.

Business Rules

When you configure a WFM scheduling application, as part of the process, you must define specific business rules to adhere to. You may establish a minimum shift definition of four hours. This means that even though your labor forecast may only show a spike for a specific time for two hours, you might schedule to the demand with a minimum shift of four hours. You may have a rule for minimum hours that a full-time associate can be scheduled (typical ranges are from 37 – 40 hours weekly). This means that even during a slow business period, if you staff compliment is heavily weighted with full-time associates, you must schedule their designated weekly minimums regardless of workload demand. There are many other business rules that have an impact, and these are applied by the WFM system in the schedule generation process.

Idle Time

Idle time can be a little more challenging to handle. Idle time is simply the time in a store when a Manager or associate is not performing any productive work. Productive work is defined as any activity dictated by the needs of the business, such as customer service, freight processing, administrative, or cleaning / maintenance. Idle time literally means time the person is idle and not doing a defined activity.

Idle time in the current state is very difficult to quantify unless you have conducted a utilization study. This type of study involves observing and tracking all activities performed by an employee. Data collection typically takes place seven days a week over all store hours to obtain accurate information. Retailers are commonly surprised at the amount of idle time that really exists in their stores when a study is conducted, although it varies greatly by company and type of retailer. We typically see idle time in the range of 5 – 30%.

There is no simple, one size fits all answer on how to address idle time. The decision will vary for each company depending on their service model, customer expectations and objectives. It is not as simple as reducing hours to recapture idle time. Some companies prefer not to reduce labor hours from historical levels and would rather re-purpose idle time to higher-value customer-facing activities to drive conversion and top line revenue growth. Others may see this an opportunity for payroll reduction. Remember that the business rules as they are defined may “force” idleness as well. Many high-service models require that salespeople stay within a certain area, and when no customers are present, they may be “forced” into an idle situation. There is no one correct answer to addressing idle time.

Process Inefficiencies

Typically, during the process of collecting labor standards, observations are made about process inefficiencies that are documented and reported as improvement opportunities. There are also situations where some stores may be doing activities that are above and beyond what is required for the company’s Standards Operating Procedures (SOPs). Examples may include doing a SKU by SKU detail check of new receipts even though the procedure calls for full assumed receiving or only scanning in new receipts at the carton level. Another example may include Districts or Regions initiating cycle counts that are above and beyond what is driven from corporate. Going forward, you would not want to allocate labor to support these inefficiencies and would limit labor to that dictated by the standard for the process as it should be performed.

Without factoring these elements in to your equation, you may experience hours that are significantly lower than you are currently using. You may arrive at the false conclusion that that the labor standards are not accurate. The reality is you must account for minimum staffing, business rules, idle time, and process inefficiencies that reside outside of “raw hours” to create a schedule. Labor standards are a critical component of accurate labor forecasting, but other levers are also part of the complete labor model.

Ultimately is it critical to remember that engineered standards are a means to an end. In order to take advantage of this incredibly powerful tool, it must be effectively integrated into your operations and financial planning process. Store payroll is not only the largest controllable store investment it is the largest single asset and differentiator that an organization must drive sales and positive customer experiences. Getting the right people in the right place at the right time not only saves money and makes the store easier to run, it makes for a better customer experience. A great place to work, a great place to shop and a great place to invest… isn’t that the reason we’re all here?

Eight Steps to a Successful Retail Labor Scheduling Implementation

As brick and mortar retailers are under siege by online competition, the criticality to have an engaged, trained, and effectively scheduled workforce has never been higher. Despite the ubiquitous technology being infused into stores, a retailer’s workforce is the best weapon to differentiate the brand and to drive customer satisfaction and sales. Many retailers have made the investment, or have on their roadmaps, to implement robust labor scheduling software application to create optimized schedules. It is a logical expenditure to make considering the potential benefits and the fact that it is a retailer’s highest controllable expense. Unfortunately, many retailers completely fail to implement at all, after spending millions of dollars, or don’t realize projected ROI after implementing. This will not be an assessment of the various labor scheduling software providers (in my experience of implementing different solutions with retailers, most reputable vendors can be effective) but rather bring attention to eight key steps to help ensure success. My definition of success is high end-user adoption and ROI realization.

Step 1: IT as a Strategic Business Partner

It is critical that IT and the business (typically Store Ops, HR, and Finance) work together to define the goals and objectives of the solution and create detailed requirements prior to an RFP to initiate the vendor selection process. Store Ops must be the owner and driver of the business requirements while IT needs to create the technical requirements. Even though in many cases the budget for the capital expenditure of the software / hardware, as well as the budget for internal and external resources may reside in IT, the internal customer is Store Ops and must have a strong voice in the vendor selection. And throughout the entire journey through implementation and ongoing. Store Ops being asked to implement a solution that they had little or no say in the selection of is a recipe for disaster and, unfortunately, one I have personally witnessed too many times.

Step 2: Create a Cross-Functional Team

A labor scheduling implementation touches so many functional areas of a retail business. Stores, Field Management, Corporate Store Ops Support, IT, HR, Finance, Legal, Loss Prevention, Marketing, etc. are all examples of business units impacted by implementation. Many retailers fail to ever create this cross-functional project team or do so too late in the process and often omit critical areas. This is a huge mistake and can be catastrophic to the project’s success. This team needs to be built at the very start of the process, beginning with requirement definition, and progressing with vendor selection, design, testing, pilot, and full rollout. Although all the roles identified are critical, I cannot emphasize enough how important it is to have representation from Store Managers and District Managers as part of this team. They are the ultimate end-users and their finger prints must be all over the engagement from start to completion to ensure their concerns are addressed. This input from stores along the journey, on what will have a major impact on running their business, will be necessary to provide credibility. I have also seen retailers get HR and Legal involved too late in the process, after design sessions (where business work rules are defined) and build has occurred. If a red flag is raised at that point, critical time and resources have been wasted if business policies must be re-designed to mitigate potential exposure.

Step 3: Create / Refine Labor Standards

For a labor scheduling application to be effective, it must have the ability to accurately forecast how much workload will be created and then to schedule people to meet workload demand by day of week and time of day. As a prerequisite, a retailer must have labor standards to create this forecast. Typically, this is done by creating an “activity dictionary” of all activity that occurs within a store and determining workload values for these activities. Normally these activities are classified as either fixed or variable (although some retailers create an even more granular breakdown) and frequency is documented (daily, weekly, monthly, etc.). If an activity is classified as variable, a driver must be identified to forecast workload. Examples may include time needed to unload and stock a truck, which will be based on the number of cartons or units received or cashier hours which will be determined based on the number of transactions. In these examples, cartons / units and transactions are drivers and must be forecasted to determine workload. Do not fall into the trap of rationalizing too many activities as variable. This adds unnecessary complexity and can cause inaccurate workload determination. A litmus test when contemplating if an activity should be fixed or variable is to be honest with yourself about the ability to forecast that driver. You can make a case that the driver for a store planogram is linear feet of shelf space, but if you can’t accurately forecast linear feet by store two weeks out you will be better served using a fixed labor amount. One of the biggest mistake’s retailers make with labor standards is the trap of trying to be precise over accurate. Projecting retail workload is not a precise science and the quest to achieve precision can be a killer in implementing labor scheduling solutions. If you have labor standards in place already, challenge yourself to the need for updates particularly if your business process has changed since the labor standards were originally created or you have implemented new technology to reduce the time it takes for an activity to occur.

Step 4: Operational Readiness

Operational Readiness identifies the non-systematic processes and execution that a retailer must execute. If not quantified and addressed, they will destroy your projected ROI from your labor scheduling solution. Examples include:

Schedule adherence (are your people actually working the posted schedules?)

Associate availability (how flexible is your workforce to address peak and slow business periods by day of week and time of day?)

Full time / part time ratio (high full-time ratios create a very restrictive environment for an optimized labor scheduling solution to create an effective schedule that meets workload forecasts)

Cross-training (have you invested in training your team to perform multiple functions within the store and is this training documented in a system of record?)

The above cannot be addressed by even the most sophisticated software. As part of the process of a successful labor scheduling implementation, you must develop a baseline, quantitative score of where you are and immediately develop an action plan to improve in all areas prior to full implementation. If your organization lacks the discipline to work the schedule, you may have hired too many people with restrictive availability. If your staff has not been trained to perform multiple job functions, the system will be constrained from maximizing its full functionality.

Step 5: Change Management

One of the most common themes I hear when I attend labor scheduling user conferences and listen to retailers tell the story of their experience implementing solutions is that they under-estimated the change management impact on the organization. I have personally witnessed during my years in industry, as well as a consultant, the impact on changing an hourly associate’s schedules, even slightly, is dramatic, stressful, and highly emotional. You need a proactive plan in place to effectively mitigate the risks and ensure user adoption. Your change management team must be part of the project team from the beginning and utilize tools such as stakeholder risk analysis, communication plans, executive alignment and project goals (are we doing this to reduce costs, drive productivity, increase sales, increase the customer experience, etc.). Unfortunately for many Managers and Associates in the field, the term labor scheduling project is synonymous with cost reduction and spurs fear and anxiety. I have been involved in implementations where the business is strong and cost reduction is not the objective and others where it is. In either case it is critical for honest messaging and risk mitigation plans to be executed. Your organization also must decide how aggressive it wants to be in the balance of migrating from associate centric schedules to customer centric schedules. Although in almost all cases there is a desire to move the needle towards customer centric schedules, each retailer must determine how far is too far. Saturdays and Sundays may be your busiest days of the week, but do you really want your full-time associates to work every weekend without ever having a full weekend off? Do you “grandfather” in long tenured, loyal associates and allow them to maintain their current schedules or will the new rules apply to all? There are no simple answers and they will be different for each retailer, but questions like these must be addressed as part of an effective change management plan.

Step 6: Analytics

As you embark on the journey of a labor scheduling implementation, now is the time to determine your analytics strategy and requirements. Many organizations have fragmented reporting and KPIs across the organization. This is your opportunity to evaluate and determine what are the true metrics you are going to utilize to ensure you are achieving desired targets in critical areas such as productivity, cost control, conversion, and customer satisfaction. Most likely as a result of your implementation, you will have access to data that was previously not available to the organization. You also must evaluate the benefits and downside of developing custom reports above and beyond the “canned” reporting provided by your software solution partner. Now is also the time to consider the benefits of leveraging the expertise of and outside firm that can provide tools to use data from not only from Workforce Management software, but combine with other data points such as HR data, Point of Sale (POS), traffic counters, and customer feedback reporting to maximize the vast amount of data available is an easy to use dashboard that can drive actionable results.

Step 7: Phased Implementation

I would never recommend a “big bang” methodology of rolling out labor scheduling to all your stores at the same time. A thoughtful, phased implementation plan is best practice. Your initial pilot store group needs to be small but selected by creating a matrix of store attributes such as sales volume, store size, urban / suburban, manager tenure, state specific labor laws (Example: California), etc. These stores will be your lab and will require hands on attention to ensure the software is performing as designed, edits are kept to a minimum, change management concerns are addressed, etc. A critical part of this phase is the delineation between a true configuration issue (you get additional hours for stocking on Tuesday but you receive your weekly truck on Thursday) as opposed to the schedule is poor but the true issue is that people are now working days and times they didn’t in the past to meet customer traffic patterns. Once issues have been identified and addressed, you can now begin a phased rollout to the remaining stores in the chain and use the pilot District Managers and Store Managers as advocates.

Step 8: Culture of Passion for Labor Management

The journey doesn’t end after the last store goes live on the new application. You must continually follow-up and audit your stores to ensure compliance. Your leadership team must be trained on how to manage with new metrics. You will now have a quantitative score of scheduling effectiveness and the goal should be to partner with your Store Managers to find the root causes of low scores and to provide coaching and guidance on how to improve. If the issue is availability of associates, it may take some time and you will need to develop an action plan. The culture must change, and you can no longer settle for just “meeting payroll budget”. Having the right person, in the right place, at the right time, doing the right thing, will ultimately help drive a great customer experience that cannot be duplicated online.

Summary

The benefits of a successful labor scheduling implementation are significant, and your workforce has become the key differentiator in effectively competing in an omnichannel retail environment. However, the risk is high and consequences of a failed implementation are severe. Following these eight steps to a successful labor scheduling implementation will provide your organization the roadmap necessary for benefit realization and risk mitigation.

Reflexis Systems – Reflexions 2019 Conference Recap

Last week, several Connors Group staff were in Las Vegas for the Reflexis SystemsReflexions 2019 Conference. It was a great pleasure to not only be a Charter Sponsor, but to also share our customer success stories on the big stage.

Reflexions has always been one of the best places to connect with our customers. This year, half of the Retailers in attendance were past or current Connors Group clients. It was amazing to reconnect with so many wonderful folks, share our achievements and plan for what’s next.

During the internal debrief, our team seemed to have consensus on these 4 conference themes:

Machine Learning & AI – an overarching theme from Reflexions was the rapid expansion of Machine Learning and AI into the retail space. Reflexis is at the forefront of this technology and from our own experience, we are seeing rapid adoption by retailers.

Renewed Focus on Customer Service thru Better Scheduling – more than ever, the “Amazon” influence is changing the way retailers are thinking about scheduling in their stores. There was a real focus during retailer presentations on the need to consistently deliver an excellent in-store experience (every time) and how proper scheduling is critical towards achieving this. 

International Growth – the number of international retailers at Reflexions this year was exciting. The Global Retail Panel was particularly insightful!

The Importance of Labor Standards – Connors Group conducted an overview session on the important of labor standards in today’s complex retail environment. The standing room only response to that session was overwhelming! A rapidly increasing number of retailers are realizing the benefit labor standards can provide their organizations, particularly as a tool to maximize their investment in Reflexis. 

Friday Quick Read: Common Process Compliance Pitfalls and How to Avoid Them.

Compliance is a heavy word and often carries with it a negative connotation, especially when associated with business and employee related issues. But, it doesn’t have to be.

In todays’ Friday Quick Read, Nate Steadman, Director at Connors Group outlines common compliance pitfalls, how to address them, and the expected results from taking action.

The big-picture problem:  Retail store associates not complying with process is costing millions in payroll inefficiency.

Common Pitfalls:

  • Whether retailers planned it or not many times store operations are being forced to operate with less than ideal staffing due to the low unemployment and difficulty finding and maintaining associates.
  • Call-offs are frequent and cause productivity and efficiency disruption, especially during peak periods of the year.

How to Address:

  • Supplying stores with tools to help better execute current best practice can result in significant operational improvements, including, but not limited to:
    • Reduced lines
    • Increased sales floor coverage
    • Improved product replenishment
  • Implementation of new store communication and task management software to improve compliance; allows for improved communication, task assignments and tracking completion (from corporate and/or field leaders)
  • Implementation of technology solutions that empower associates to swap shifts that may otherwise go unstaffed. These same solutions can also enable store leadership to request volunteers for shifts to account for un-forecasted events such as larger than planned product shipments

Expected Results:

  • Improved compliance
  • Increased associate engagement and morale
  • Reduced turnover
  • Enhanced customer service
  • Increased sales

Connors Group Named Innovative Partner of the Year by Manhattan Associates

Phoenix, AZConnors Group was recently presented a Partner Performance Club award by Manhattan Associates during Momentum 2019, Manhattan Associates’ annual customer event. The award was given for Connors’ Group LaborPro™Labor Standards software system, which they designed and developed for the Retail, Grocery, Distribution, Manufacturing and Service industries.


Shawn Roche (left) and Jon Huesdash (center) from Connors Group receiving the Innovator of the Year award from Eric Lamphier of Manhattan Associates at the recent Momentum conference in Phoenix, Arizona.

“LaborPro™ is an easy-to-use, fast and reliable cloud-based system, that gives users the ability to centrally manage engineered labor standards in support of labor modeling,” said Patrick O’Leary, Vice President, Workforce Technology Services and Software. “We are extremely proud of our accomplishments with LaborPro™ and thankful for the recognition from our longtime partner Manhattan Associates.”

“LaborPro™ ELS software has delivered tremendous value to our joint labor management clients,” added Eric Lamphier, senior director of Alliances at Manhattan Associates. “Connor Group’s accelerated SaaS platform for the development and maintenance of labor standards is truly innovative, and we look forward to working with them on many future implementations.”

About LaborPro™ Features and Benefits:

  • The platform is preconfigured with master standards for Retail, Grocery, Distribution, Manufacturing and Service Industries
  • It’s powerful, easy to use and flexible location profiling simplifies location-specific standards
  • Users can quickly apply labor standards to an entire organization or network
  • A statistical approach ensures an accurate labor model by focusing on the work content that truly matters
  • The software is highly scalable and deployable with minimal IT support required
  • Offers the ability to manage large, dynamic, and complex labor models or simpler but ever-changing models

About Connors Group

Connors Group was formed in 2008 with the mission of helping companies achieve real, measurable, and sustainable operational improvement through Industrial Engineering and Lean business practices.

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To learn more, schedule an interview or LaborPro™ demonstration:

Phone: (800) 813-7028 Ext. 405

Connors Group:                 http://www.ConnorsLLC.com

LaborPro™:                         https://www.connorsllc.com/laborpro-software/

Twitter:                                https://twitter.com/ConnorsGRP

LinkedIn:                             https://www.linkedin.com/company/connors-group/

REPL Group and Connors Group Partner to Enhance Retailers’ End-to-End Integrated Approach

Retail 101

My first “real” job was in a retail store: running a register, stocking, cleaning shelves, picking up cigarettes outside. Anything it took to keep the store cleaned and maintained to serve our customers.

I quickly rose through the ranks; running the same store at the age of 17 over the summer school break. I had to ensure someone was over 18 on staff to sell alcohol, because the “manager was too young”.

As I’ve grown in retail through multiple roles the term “Retail 101” became a popular phrase.

Retail 101, in the course you will learn the basics it takes to run a retail location:

  • Stocked shelves
  • Clean floors
  • Clean restrooms
  • Replace broken fixtures and light bulbs
  • Warm greeting
  • Fast checkout
  • Make sure someone is over 18 to sell alcohol…

I’ve worked with countless field leaders and we can all agree you know a well-run store when you walk into it. “You almost feel it.” As one SVP of Operations told me.

Forbes posted an interesting article that reminded me of the same issue, “Retail 101”, with some interesting facts to why retail is struggling today. Sometime “Retail 101” is not the problem. These issues go straight to the top, well above the operations team. The retail space continues to be pressured with cost controls:

  • Marketing spends to acquire new customers is going up
  • Margins are thinning
  • Minimum wages or other labor law compliance
  • Trying to control costs

Many retailers turn to their workforce to manage these costs. At times eroding the capability to perform “Retail 101”. The good ones will find tasks they can remove from a store, but even in those cases it is hard to complete the basics. I’ve seen where the business decided to stop cleaning the floors seven days a week, three is good enough. The worst offenders don’t give options they just hold the store to a number.

This why I love working in this space and especially with Connors Group. Instead of cutting things to the bone and ultimately ending up like one of the closing retailers. Let’s be thoughtful of what your customer expects in their shopping experience. Let’s remove those task that don’t bring value, help control costs, but more importantly find things that increase revenue.

Let’s be thoughtful and ensure our operations is passing Retail 101 with an A+

5 Ways Mobile Apps and Tools are being used by “Empowered” Employees

As the economy nears full employment, retailers are finding it more and more challenging to hire for open positions and retain existing employees. And while traditional methods for attracting employees are still effective, (pay rates, work environment, etc.) retailers are now starting to sell themselves as an employer of choice through new means.

One of these new means is providing employees greater control of their schedules and work-life balance.

There are many new tools and apps that cater to this new means…And many employers are embracing these apps and granting employees greater control over their schedules.

Here are 5 ways mobile apps and tools are being used by “empowered” employees:

  1. Swapping and/or or trading shifts with other associates
  2. Looking for additional shifts in neighboring stores
  3. Adjusting their availability/schedules
  4. Accessing schedules more than 1 week in advance.  (In some areas, this is becoming the law, but other retailers are preemptively doing this.) 
  5. Bidding and/or selecting preferred days/times

The bottom line…

Work-life balance is one of the most-important factors in employee satisfaction.  And nothing outdoes the benefits of truly allowing and empowering employees to take control of their schedules.

The Challenges and Importance of Maintaining and Managing Inventory Accuracy in Omni-Channel Retail Stores

As retailers move to expand their omnichannel strategies to allow customers to easily purchase products both online and in store, inventory accuracy is critical to maintaining customer satisfaction.

Retailers effectively look to drive sales through initiatives such as BOPIS (buy online pick up in store), SFS (ship from store) and even customers just finding the products they desire during their in-store shopping experience. Having the right products at the right time when the customers want them is a challenge that all retailers struggle with.

Here are some of the key issues, expectations and consequences of maintaining and managing inventory accuracy in the retail omni-channel:

  • When store inventory falsely posts product availability retailers not only run the risk of lost sales but also an impact on customer loyalty.
  • When customers place an online order, they expect their order to be filled and they expect it to be filled fast. If their demand cannot be met than they will move to the next retailer that has what they are looking for.
  • When retailers are forced to send an apology email stating that the customer order cannot be completed, it shows that they don’t truly know their inventory levels. This will erode customer confidence.

However, there are many areas where retail stores and store Associates can help control, maintain and manage accurate inventories.

For example,

  • Accurate physical inventory counts. Retailers traditionally utilize third party vendors to periodically conduct physical inventory counts across their stores. Recently, some retailers have begun taking this process over and are now performing their own physical inventory counts with the hopes of better controlling the accuracy of the count.
  • Implementing an effective cycle counting program to update inventory on an ongoing basis.
  • Establishing a well-defined process and implementing associate training for proper product handling (receiving, replenishment, marked out-of-stocks, etc.).
  • Employing loss prevention strategies to minimize inventory inaccuracies due to theft.
  • Maintaining well-organized back-stock storage locations.

The bottom line…

If done well, a retailer may experience higher sales and increased customer traffic. If not, retailers run the risk of wasting labor looking for products that may not exist, ultimately leading to a negative impact on the customer experience.

Is Artificial Intelligence Necessary in the WFM Space?

Which do you think processes data faster—the world’s largest supercomputer or the human brain?

It might be a surprise, but the human brain can be faster!

I’ve read that, what it would take a super computer 40 minutes to process, the brain can process in a second. So, with all this processing power upstairs, why would we need Artificial Intelligence (AI) or its subset Machine Learning (ML)? After all, every day we hear about and even experience new developments in AI.

For example, Walmart recently launched an intelligent store to gather insights on shelf stock, customer patterns, associates’ patterns, and many other data points. With all the AI sensors, it is processing 1.6 Terabytes of data every second! That’s like listening to 3 years’ worth of music in the same amount of time. This type and volume of information and data will enable Walmart to provide an enhanced customer experience, while improving their bottom line through inventory and labor controls.

What about the Workforce Management space?

Reflexis is investing heavily in this space to bring the most cutting-edge product in the market. They are using their deep strength in engineering and analytics to start leveraging AI and ML with their customers. The most common application of this technology in retail is the intelligent, ongoing enhancement of business forecasting algorithms.

Customers have often been left to do this analysis themselves. While some of the best have invested in data science teams to figure it out, most are just left with the basic outcome of their workforce management (WFM) solution. At the macro level, that outcome could be very accurate, but once you peel back a layer or two you can see drastic results from utilizing AI.  

For example, a data science team was able to find pinpoint accuracy the impact of events held near its retail locations. They were able to determine the hour-by-hour impacts on traffic before, during, and after the event. This ensured they were able to adjust staffing to gain the added revenue from the event traffic they would have otherwise missed.

Imagine being able to do this with no extra resources, but automatically through your WFM application? AI is helping retail, food service, and other industries forecast with greater accuracy, to ensure customer expectations are met. How are you using or going to use AI to better meet the needs of your business?