Expanding Your Business Through US Partnerships

Recognizing the specific environment of each store is also important. In activity-based scheduling, each activity is assigned a network-wide standard time that is consistent across all stores, plus any additional time needed for store-specific requirements (exhibit). The network-wide standard time provides a best-practice benchmark for all retailers. Observation allows for measurement of store-specific time drivers. Some activities will be challenging to mimic. Calculating how long it should take to ring up sales and how many cashiers should be working at a time can be challenging due to irregular customer arrivals. To handle uncertain consumer interactions, merchants should apply queueing theory.

Retailers should prioritize tasks that contribute significantly to store 

Personnel' workload. Creating a comprehensive model for the time it takes to change a shelf to an updated planogram is unnecessary as it often amounts for less than 1% of the overall workload. However, replenishment operations might consume up to 70% of the total.Implementation and Rollout To implement an activity-based approach, store managers need a platform that converts inputs like revenue forecasts and customer-footfall estimations into actionable results. Outputs may include the number of full-time employees needed each hour and day, as well as the tasks to be completed during particular hours and labor expenses. Retailers often prefer to create a solution from scratch and integrate it with their existing workforce management systems, rather than integrating it with their current HR systems. Developing an Excel-based prototype, testing it in a few locations, observing its impact on the workforce, and refining it often takes about six months. Rolling out the technology across the full shop network depends on available resources. However, a store-by-store rollout with an operations "coach" to help staff learn the new tool and processes is frequently the most effective approach.Leadership must integrate the tool into daily work and relate it to HR planning and annual budgeting processes. A multinational European retailer with over $20 billion in yearly revenue recognized the need for more rigorous labor scheduling and budgeting methods to ensure consistent work hours.

Each store's weekly staffing plan and annual labor budget were mostly 

Determined by revenue and managerial discretion. To improve data-driven decision-making, the retailer tested activity-based labor scheduling and budgeting in two locations for four months. We calculated the time of 65 events and created an Excel prototype for a new labor-scheduling and budgeting application.The retailer tested the prototype in six different stores to confirm the tool's outputs were applicable across the full network. The retailer identified and promptly implemented best practices and process improvements.The retailer's new staffing schedules and labor budgets resulted in improved efficiency and customer service, especially since they had recently undergone a successful lean retail transformation and had already implemented best practices. Additionally, the strategy highlighted weak retail management. One store was viewed as well-managed due to its reduced labor costs. The store's low labor expenses were attributed to positive store features, including short transport distances and easily stocked shelves, according to a bottom-up assessment of annual labor budgets. Adjusting for labor costs revealed that the store was among the least efficient in the network. These information helped the retailer evaluate and train its store managers.Changes in service levels or process standards. In the event of labor budget cuts, management teams can lead detailed discussions to determine which store activities can be accelerated or eliminated, as well as where service-level targets can be relaxed.Profitability in retail, especially in physical locations, is becoming increasingly challenging. Retailers worldwide have made efforts to improve labor productivity and automate processes. To improve brick-and-mortar economics and stay competitive in a changing retail landscape, it's essential to adopt new ways of thinking.

An integrated cost approach can optimize operations costs across

The value chain for consumer goods companies, as described by our colleagues.This article explores how shops might profit from a similar end-to-end approach. The purpose is to help departments, including store operations, supply chain, and merchandising, comprehend the overall cost of each SKU by breaking down the product's path from start to finish. This insight can help shops make better judgments about purchasing things, transporting them, displaying them, offering sales, and optimizing employee time. Traditional store efficiency programs can save 5-10% of overall costs, but a more comprehensive approach can result in two to three times more savings, bending the cost curve toward meaningful impact. Case for Change: External Environment Retailers with stable balance sheets are experiencing cost pressure due to causes such as declining foot traffic, increased SKU complexity, higher customer demands, and rising labor expenses. E-commerce has enabled people to purchase from the convenience of their homes, replacing the need to visit a physical store. This approach can lead to persistent increases in retail efficiency, customer service, and employee satisfaction while maintaining control over labor expenses. In future works, we will explore the factors that contribute to labor schedule variations.