Study: HEMA benefits from workforce management
Tuesday September 2 2014
European retailer saves 3 million in first six months using workforce management technology
Dutch discount retail chain HEMA is reported to have made big savings in its first six months using workforce management to support effective human resources management.
With approximately 650 stores in the Netherlands, Belgium, Luxembourg, France, Germany and the United Kingdom, HEMA is known for its self-branded line of high-quality, low-priced housewares, home furnishings, apparel and fresh food products.
Optimising labour costs
With over 10,000 employees, the company recognised that effective human resources management was critical to its success and decided to implement a new workforce management system.
The company has rolled out JDA Workforce Management, including JDA Time & Attendance and JDA Advanced Scheduling, as well as JDA Task Management.
The new system helps the retailer optimise labour costs and ensure high customer service levels, while addressing all operations that characterise a multi-category retail business across all store formats.
"At both the corporate and regional levels, we had no visibility into whether we would be able to meet our labour budget or service level from week to week," said Mischa Gijrath, efficiency manager at HEMA.
"We needed to forecast our sales, labour demand and salary costs more accurately. That would enable our board of directors to adapt our staffing strategy if labour costs were increasing. At a district level, it would permit regional managers to adjust their salary costs per store to meet local budget targets."
Another goal was to encourage collaboration and best-practice sharing among employees in different regions. "The knowledge at the store level is quite high," Gijrath noted. "We wanted to communicate with employees, as well as get their feedback."
After only six months, it’s understood that HEMA has achieved a full return on its investment. "We quickly improved the productivity of our employees by 3 percent with JDA Workforce Management and we lowered our costs by €3 million," stated Gijrath. "If you look at the workforce management solution as a cost reduction program, then we've succeeded by more than 200 percent."
The advanced scheduling function of the JDA solution enables HEMA to match associates' time and skills to actual store traffic. "We've improved our accuracy on scheduling according to demand by about 18 percentage points, which enables us to provide better service to our customers," explained Gijrath.
Reducing employee hours
At the same time, HEMA has been able to reduce its overall employee hours. "We reduced approximately 200,000 hours, without reducing our service level, in just the first six months of our JDA implementation. We noticed that our associates were not scheduled at the right time and in the right place. Using the JDA solution, we have succeeded in improving our efficiency by looking at demand and adjusting our schedule accordingly, without lowering our service level," added Gijrath.
The forecasting engine in JDA Workforce Management is a critical contributor to HEMA's success. "When we started the project, we chose certain algorithms that matched our business," Gijrath said. "Nowadays, the forecasting engine on sales is off by only 1 or 2 percent. That is a really, really good result. If your sales forecasting engine predicts the sales quite well, it's our experience that the metric that provides your labour demand is also quite good. That gives us a lot of insight into labour demand and costs, which enables us to improve our customer service by having the right people at the right time and in the right place.”
Improved productivity and visibility
In addition, JDA time and attendance has helped HEMA achieve better visibility into productivity. "Today, employee scheduling is very transparent," Gijrath said. "We can see exactly which people are in the stores on a daily basis. We can see if stores are going up or down in sales. We can rank the stores by productivity. We couldn't do this in the past."
HEMA can also look at its productivity level for certain departments across stores, pinpoint where there are issues and have discussions on how productivity can be improved.
"For example, the food department is always very time-consuming, and we had already implemented several improvements in our daily business processes to achieve better productivity. The JDA labour standard gives us insight into other improvement possibilities.
"For instance, do we still need service with pastries, or can we use self-service? Can we change the way we wrap products, or the way we check out? We’ve been able to start a productivity improvement program to answer these kinds of questions."
As HEMA establishes new employee practices, the task management function helps communicate and install a consistent way of doing business. "Within the solution, there is a dashboard where you can see the compliance of stores," reported Gijrath. "When regional managers visit a store, usually there is a lot of discussion about why people aren't doing things in a certain way. Now we have that insight beforehand and can manage by exception."