Today's post comes to us from Workforce Institute board member John Frehse, senior managing director at Ankura Consulting Group, LLC.
Did you really need 200 rolls of toilet paper, 300 lbs. of dry dog food, and 24 cases of sports drink? Probably not, but you bought it anyway. Just in case. Just in case the supply chain broke down completely and these items stopped becoming available at your local supermarket. Panic at the Walmart was visible to everyone back in March at the beginning of the global COVID-19 pandemic as initial concerns quickly exploded into all out fear.
As consumers created a network of new warehouses in the supply chain - their basements or storage closets - a massive disruption for manufacturers ensued.
Over the last several decades, forecasting demand has become a more exact science, although manufacturers will argue it still has a long way to go. This continuous improvement gave large, global brands the ability to consolidate warehousing space and carry less inventory. The effort to become “just in time” producers of consumer goods drove carrying costs down and squeezed out additional profit. This “leaning out” of the supply chain was celebrated as progress.
But, as we all know now, this new, lean supply chain was never engineered for the type of panic buying spurred on by the pandemic that was seen in 2020. Shelves quickly emptied of essential items causing manufacturers to ramp up production.
There was a brand new and unforeseen problem. Customers were not consuming the products they were buying, but storing them in their basements and other storage spaces, therefore creating a new network of warehouses in the supply chain. As concerns over supply eased, consumers began using the products from their own “warehouse,” therefore decreasing demand at the store level. This backed up the real warehouses as manufacturing sites were now overproducing. The initial shockwave that caused the ramp up in production was now hitting the opposite way, a sharp decrease in demand and the need to dramatically ramp down production.
This was not true for everyone. The sectors with the biggest gaps in supply chain agility had winners and losers. When the shelves were empty of one's preferred brand, whatever was available was purchased and those who were on the shelf gained new customers for life. This customer acquisition trend through product availability (or lack of availability) will have an impact on demand long after the pandemic is over.
So, what does this mean for labor? As shockwaves continue to reverberate through the supply chain, employees are being asked to be more agile than ever. The amount of overtime worked during the pandemic for many of these employees is unsustainable, and fear of reduced hours below the traditional 40 is now a real fear as consumer demand adjusts. This type of whiplash is especially painful for companies who have not created agile labor strategies and systems to handle such fluctuations.
As exhausted as we all are right now, there is no better time to assess what has happened, develop the right labor strategies, and make our companies more resilient for the next big disruption. It is not a question of if, but when it will happen again.
Today's post comes to us from the executive director of The Workforce Institute, Dr. Chris Mullen, Ph.D., SHRM-SCP, SPHR.
The grocery store aisles may currently be stocked with Halloween candy, but I can tell you that retailers everywhere (along with my kids) are already thinking ahead to the holiday shopping season. The latest UKG survey looks at retail trends for this holiday season which, in light of the unprecedented global pandemic we are all currently living through, is likely to be a season like no other.
The survey touches on a variety of issues from how confident retailers are about staying open through the holiday season, to how good managers are more important now than they ever have been.
Some of the findings I found most interesting focused on prioritizing employee well-being and evolving for the new normal:
The retail industry has shown remarkable resilience and innovative thinking throughout this pandemic, and it's critical that they continue to do so as the holiday shopping season commences. Perhaps most important, retailers must recognize and appreciate their frontline workers and minimize the risks they face while doing their jobs each day.
And a final thought: We as shoppers and consumers should also remember how indebted we are to these hardworking frontline workers. Be extra patient while waiting in the check-out line, show your genuine appreciation to the person helping you pick out that perfect gift, keep your sense of humor when things don't go as quickly or smoothly as you had hoped. A little patience, gratitude and good will goes a long way in these difficult times!
You can download the full report here.
Today's post comes to us from board member John Frehse, Senior Managing Director at Ankura Consulting.
When my colleagues and I ask executive management teams about their labor strategies, they often tell us how it is supposed to be rather than how it actually is. In many cases we hear about 3-shift operations working Monday-through-Friday with weekends off. As we dig deeper though, we often learn that employees are working at least 20 weekends a year, morale is low, absenteeism and turnover are high, and the current schedule is broken. Reality can be harsh.
The First Step is Admitting You Have a Problem
When we ask management teams how it is possible that the demand for their products and services equals exactly 120 hours of labor coverage, they usually smile and say, “Of course it's not exact, but this is the strategy we have had forever and we tweak it all the time to make it work.”
Although labor strategies with no weekend work are often simple, easily understandable, and in theory, predictable, they don't always provide adequate production capacity during the “traditional” workweek. This lack of planned capacity forces managers to constantly move people around to meet the actual demand. In principle, labor strategies with no weekend work allow managers and business to operate within their comfort zones, but in reality, last minute demand changes cause last minute schedule changes. As a result, employees are “voluntold” to work overtime on their Saturdays and Sundays, leading to reduced employee morale and motivation.
7 Warning Signs That Your Current Schedule Strategy May Be Broken
1. Rapid company growth
2. High amounts of Saturday and Sunday overtime
3. High levels of absenteeism and turnover
4. Events driving demand (outside of management's control)
5. Inaccurate forecasting
6. Impossibly low inventory
7. Increasing reliance on temporary employees to cover off-shifts
Strategies to Address Broken Monday-through-Friday Schedules
Awareness is the first step in addressing the realities of broken schedules. The next step is to review solutions to mitigate the problem. Possible solutions may include:
• Providing alternative shift lengths with more days off even with weekend work
• Developing alternative day-on day-off patterns to share the burden of weekend work
• Reaching out to employees to learn what they like and do not like about their current schedules
• Building in predictable overtime for employees who want more hours
• Using automated scheduling tools, analytics, and activity management to better understand and manage scheduling
• Providing longer periods of time off, allowing employees to recuperate and enjoy quality time with their families and friends
Changing employee scheduling practices is something that very few companies do well and many companies do poorly. Although challenging, getting out of your comfort zone and coming to terms with the fact that you are no longer a Monday-through-Friday operation is the key to turning your company into a more responsive, agile, and resilient operation.
OK - I borrowed the title from a Steely Dan song from one of my favorite albums (link provided for those born after 1970). The song refers to a few cataclysmic events. For retailers, it refers to the day after Thanksgiving - when the holiday shopping begins in earnest, and retailers' financial fates are in the hands of the consumers. Retailers are worried this holiday season as the mortgage market does the mambo, oil hits $100 per barrel, and the average consumer may be inclined to limit the holiday budget while waiting out the storm.
In partnership with Retail Systems Research, we've recently concluded a survey of major retailers entitled "The State of Retail Workforce Management". You can download the full text of the survey from their website. This research is especially timely as it highlights the balancing act retailers need to achieve between customer service and expense management. From the Research section of this site, you can download “Customer Centricity's Impact on the Workforce”, by Nikki Baird, Managing Partner at RSR Research. This article summarizes the survey findings and describes how management practices for the retail workforce and the tools used to manage the workforce must change if retailers are to survive in a customer-centric environment.
Among the principle findings of the survey is that while retailers almost universally cite their workforce, and specifically their customer facing workforce, as their most important asset, many still treat their workers as a means to an end vs. a strategic asset. There are some exceptions out there. In his blog HRCleanUp, my friend Jay Hargis cites customer service leaders like Starbucks and In-N-Out Burger that offer their employees benefits and seem to reap the rewards in employee and customer loyalty. A recent Boston Globe story indicates that some retailers are rethinking the marathon hours for their employees, and foregoing 5 am opening times in favor of having well rested employees who they believe will produce a better result for them.
I'd love to hear from you about retailers you think are doing a great job balancing employee satisfaction with business results. Happy shopping!
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