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Retailers embrace scheduling software

More retailers are embracing scheduling software

BROCKTON -- Cashiers and baggers move in and around the checkout lanes at Shaw's Supermarket on the east side of town in a tightly choreographed dance. At 2:35 p.m., afterschool shoppers, their children in tow, wander in. Lines of customers begin forming three deep in aisles 8 and 9, their carts piled high with cereal, fruit, lunch meats, and soda. Scanners are beeping wildly.

A young man opens aisle 10 to handle the overflow. He has no bagger, and his customer begins loading her own shopping cart. Aisle 9's bagger swoops in to rescue the woman, leaving the other cashier to fend for herself. Outside the picture window, an elderly worker walks back and forth, retrieving carts, one or two at a time, from the parking lot.

Although the scene at Shaw's appears fluid, even improvisational, the number of cashiers last Wednesday had actually been determined days earlier by a computerized scheduling system that is a descendant of the earliest attempts to boost workers' productivity. What started with Adam Smith's division of labor in the 1700s, and progressed to the engineering of worker/machine factory-floor interactions in the 1920s, has entered a new frontier: retailing.

Software developed by Kronos Inc. in Chelmsford, and implemented by Shaw's, apparel retailer Bob's Stores, Pep Boys auto parts chain, and other major retailers, now predicts each store's traffic patterns, based on numerous variables such as past sales or whether it is the first of the month when retirees receiving Social Security checks stock up on groceries.

Traffic patterns are then used to create work schedules that reduce staffing levels during slow times and ensure enough sales clerks are available for busy holidays, the start of the school year, and rainy summer days.

Some employees criticize a system they believe drives them to their physical limits. Cynthia Krajewski, a customer-service representative who has worked at Shaw's for 17 years, said the new software sometimes produces schedules that seem to have no slack.

For example, baggers typically spend two hours collecting carriages and trash and cleaning bathrooms, she said.

"If they're doing that, they're not bagging, so the cashier on the big production line is cashiering and bagging, cashiering and bagging," she said during an interview after her shift at the Brockton store ended. Employees "are very good people. They're just overworked and the stress level is beyond belief."

Shaw's scheduling system allows two minutes and eight seconds for each customer's checkout, she said, which does not allow for human frailties or the labor pool available to a grocery chain: "I have 70- to 80-year-old women, 90-year-old men and kids," and "our scan time is not 2 [minutes] -- it's probably more like 3.0."

Shaw's declined all requests for interviews for this article. A written statement by spokesman Terrence Donilon said the company rolled out its system in August; it matches traffic patterns at 191 Shaw's and Star Market grocery stores to the preferences of 30,000 employees "so that they can have time to play in a soccer game, go to a family barbecue, attend a friend's wedding" or other activities.

The grocery chain's system is in the "implementation phase, and we will be fine-tuning the program during the upcoming weeks and months," Donilon wrote.

Erik Brynjolfsson, a professor at the Massachusetts Institute of Technology's Sloan School of Management, said Kronos-style technology is part of the evolution of efficiency techniques, and he attributes the late-1990s burst in US productivity in part to the harnessing of powerful computers in more new areas of business.

"We're producing a lot more output without using more input, and the trend on that has been remarkable," Brynjolfsson said. "This is one example. There are tens of thousands of innovations large and small using technology to change the way work is being done that collectively account for this productivity surge."

Productivity gains occur when the same good or service can be produced with fewer inputs, whether those inputs are components or workers' time. Jolie Clark believes Kronos's system has meant more service for customers at the Bob's Stores outlet she manages in Shrewsbury.

Clark leads a guest past racks of clothing and then through a gleaming-white hallway to an office tucked in back of the enormous store. She demonstrates Kronos's software on a desktop PC, calling up a colorful computer file for one employee that displays his birth date, expertise -- footwear and stock processing -- and minimum and maximum allowed work hours per day.

On a seven-day chart, green stripes block out the hours the young man is unavailable and attending high school; pink stripes mean he can work. Red represents preferred hours. Employee data combine with sales flow data, estimated in 15-minute increments at Bob's headquarters in Connecticut. Clark executes the program, and a color-coded schedule appears.

It takes Clark about three hours now to prepare the new weekly schedule, 10 days in advance. It once consumed up to 20 hours per week, combined, of her and her department heads' time. Now department heads can be "on the floor with the customer," she said. The centralized system also helps eliminate the in-store politics that comes with workers jockeying for the best shifts and department heads reluctant to share employees.

A full-time Bob's employee, Bonnie Britt, has worked at other retailers with rigid schedules.

"I found that when you told them you couldn't work, they wouldn't hear that, and they'd schedule you." Not at Bob's. As an example, Britt said she asked for and got a Wednesday off to take her father to a Red Sox-Tampa Bay game for his 80th birthday.

Retailers use the scheduling software because it cuts labor costs substantially: eliminating unintended overtime and what Kronos chief operating officer Aron Ain calls "just-in-case" staffing. The software takes the guesswork out of creating a schedule for sales clerks with myriad, competing requests, a complex task that gives store managers headaches.

"It's easier to work with, and I'm not using 20 erasers from my pencil," said Clark at Bob's.

In an increasingly competitive retail industry, the biggest expense is often labor costs. They are nearly 16 percent, on average, of total US grocery-chain expenses, according to the Food Marketing Institute.

After implementing Kronos's system in 2000, Bob's Stores immediately cut payroll costs 15 percent; another 10 percent savings came as the system was refined at its 36 stores, said Kevin Campbell, vice president of store operations.

The software is a leap from the rudimentary payroll systems Kronos introduced in 1979. By then, companies had automated payroll and check-writing. But employees' hours continued to be collected manually by time clocks that punched cards at the start and end of a shift.

Kronos's first innovation was a time clock that ran on new microprocessors. When personal computers were introduced, the data collected by the time clock could be fed into PCs at each location. The Marriott hotel chain in 1982 began using Kronos programs to enter hotel schedules into the computer, though schedules were still prepared manually, Kronos's Ain said.

By the early 1990s, Kronos software could create a schedule, he said, but computers were so slow, it "wasn't practical." More powerful computers and increased networking capabilities have eliminated the speed roadblock, enabling new levels of scheduling complexity.

In the past decade, Kronos's revenues grew fivefold, to $342 million in 2002. But Ain said adoption of scheduling has been slow, though more retailers are seeing its merits.

Retailers "are being asked to deliver world-class service," Ain said. "If they don't have the right lines open, people aren't going to shop there. At the same time, they're under tremendous pressure and have to control their costs so they use these systems to help them manage" their stores.

Each retailer customizes Kronos's software to its unique specifications. Campbell said Bob's Stores allows 62 seconds to process each customer's payment for purchases, plus 11 seconds for each item purchased -- critical data used to determine how many cashiers are scheduled for a given time. The software's precision led the store to redesign its scanning system, shaving 1.7 seconds off the checkout time. Kronos software is "taking something that was used in manufacturing and applying it to retail," Campbell said.

However as impressive as the technology has become, its impact ultimately depends on how it is used, said MIT's Brynjolfsson. "The techniques can be used to eliminate waste," he said, "but it sounds like it can also be used to just sort of squeeze the workers harder, and that's not a true productivity gain."

Kimberly Blanton can be reached at blanton@globe.com.

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