Big Data meets HR meets Call Center Management

We have already written in the past about the use of data analytics to best route customers to agents based on demographics and other characteristics.  The NY Times has an interesting article on the use of data analytics to improve retention and employee-employer relationships (“Big Data, Trying to Build Better Workers“)

The article discusses the broader appeal of these ideas, but focuses on applications to call centers. Why call centers? In contact centers, customer service agents, that are hourly workers handle a steady stream of calls under challenging conditions, yet their communication skills and learning capabilities play a crucial role in determining both the employee’s tenure and performance. The article discusses a new startup, Evolv, which helps firms find better-matched employees by using predictive analytics.

Transcom, a global operator of customer-service call centers, conducted a pilot project in the second half of 2012, using Evolv’s data analysis technology. To look for a trait like honesty, candidates might be asked how comfortable they are working on a personal computer and whether they know simple keyboard shortcuts for a cut-and-paste task. If they answer yes, the applicants will later be asked to perform that task.

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Those shelves won’t stock themselves

Another day, another Wal-Mart story. This one is from Businessweek and deals with troubles Wal-Mart is reportedly having getting goods on the shelves (Walmart Faces the Cost of Cost-Cutting: Empty Shelves, Mar 28).

Wal-Mart Stores (WMT) has been cutting staff since the recession—and pallets of merchandise are piling up in its stockrooms as shelves go unfilled. In the past five years the world’s largest retailer added 455 U.S. Walmart stores, a 13 percent increase, according to company filings in late January. In the same period its total U.S. workforce, which includes employees at its Sam’s Club warehouse stores, dropped by about 20,000, or 1.4 percent. …

At a Feb. 1 gathering of Walmart managers, U.S. Chief Executive Officer Bill Simon said Walmart was “getting worse” at stocking shelves, according to minutes of the meeting obtained by Bloomberg News. Simon said “self-inflicted wounds” were Walmart’s “biggest risk” and that an executive vice president had been appointed to fix the restocking problem, according to the minutes.

Note that this is not a supply chain issue. Rather it is a store operations problem. The goods are getting to the stores; they are just not getting out to the shelves.

At the Kenosha (Wis.) Walmart where Mary Pat Tifft has worked for nearly a quarter-century, merchandise ready for the sales floor remains on pallets and in steel bins lining the floor of the back room—an area so full that “no passable aisles” remain, she says. “There’s no manpower in the store to get the merchandise moving,” says Tifft, who oversees grocery deliveries and is a member of OUR Walmart, a union-backed group seeking to improve working conditions at the chain. “Customers come in, they can’t find what they’re looking for, and they’re leaving.”

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Would you deliver packages for Wal-Mart?

Right now, same day delivery is one of the hottest topics in e-commerce with multiple firms experimenting with different ways of fulfilling on-line orders tout suite. See this Wired graphic-fest for a summary of what different firms are trying.

Then there is this.

Wal-Mart Stores Inc is considering a radical plan to have store customers deliver packages to online buyers, a new twist on speedier delivery services that the company hopes will enable it to better compete with Amazon.com Inc. …

“I see a path to where this is crowd-sourced,” Joel Anderson, chief executive of Walmart.com in the United States, said in a recent interview with Reuters.

Wal-Mart has millions of customers visiting its stores each week. Some of these shoppers could tell the retailer where they live and sign up to drop off packages for online customers who live on their route back home, Anderson explained.

Wal-Mart would offer a discount on the customers’ shopping bill, effectively covering the cost of their gas in return for the delivery of packages, he added.

(Wal-Mart may get customers to deliver packages to online buyers, Reuters, Mar 28)

The article describes this as being at the “brain-storming stage” and I must admit that I don’t know where that lands on Woody Allen’s notion-concept-idea spectrum. Indeed, it strikes me as being something of an elaborate April Fools’ joke.

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How far does supplier responsibility extend?

How much responsibility does a downstream buyer have for how its suppliers behave? That has been a recurring question over the last several years as various news reports have highlighted tough working conditions in (largely) overseas factories. Apple’s relationship with Foxconn has been front and center here.

Now we have two stories that leave Wal-Mart facing similar questions. A horrible garment factory fire in Bangladesh killed over a hundred workers, some of whom were apparently making clothes for Wal-Mart. The problem, according to the Wall Street Journal,  is that they weren’t suppose to be (For Wal-Mart, Sears, Tough Questions in Bangladesh Fire, Nov 29).

Wal-Mart says it followed its play book when it yanked its business from a Bangladesh garment factory after the retailer’s inspectors found problems. But the chain’s clothing was still being produced there when the factory went up in flames last weekend, leaving at least 112 workers dead. …

The world’s largest retailer said it had revoked the factory’s authorization to make its products months before the fire, but declined to elaborate. It would not name the supplier it said was responsible for giving its business to Tazreen Fashions Ltd., a modern factory set up in 2007 near the Bangladeshi capital of Dhaka. …

Wal-Mart’s system of inspecting factories grades them on a color scheme ranging from green to red. It said most of the audits are done by outside firms, though Wal-Mart has an internal team that conducts surprise audits and checks factories with known problems. Factories with repeated bad grades can be banned from doing business with the company.

Wal-Mart said it is the responsibility of the suppliers to use factories approved by the company, and warns suppliers in an extensive manual that they can be banned from doing business with the retailer if they fail to do so.

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The rise of the part-time workforce

So how is this for effective workforce scheduling (A Part-Time Life, as Hours Shrink and Shift, New York Times, Oct 28):

At the Jamba Juice shop at 53rd Street and Lexington Avenue in Manhattan, along with the juice oranges and whirring blenders is another tool vital to the business: the Weather Channel.

The shop’s managers frequently look at the channel’s Web site and plug the temperature and rain forecast into the software they use to schedule employees.

“Weather has a big effect on our business,” said Nicole Rosser, Jamba’s New York district manager.

If the mercury is going to hit 95 the next day, for instance, the software will suggest scheduling more employees based on the historic increase in store traffic in hot weather. At the 53rd Street store, Ms. Rosser said, that can mean seven employees on the busy 11-to-2 shift, rather than the typical four or five.

Such powerful scheduling software, developed by companies like Dayforce and Kronos over the last decade, has been widely adopted by retail and restaurant chains. The Kronos program that Jamba bought in 2009 breaks down schedules into 15-minute increments. So if the lunchtime rush at a particular shop slows down at 1:45, the software may suggest cutting 15 minutes from the shift of an employee normally scheduled from 9 a.m. to 2 p.m.

This seems like every managers dream: Turn employees into on demand resources and pay for what is needed as opposed to what might be needed. The downside of this, of course, is that it shifts risk to employees who end up with both fewer hours per week and more unpredictable schedules.

“Over the past two decades, many major retailers went from a quotient of 70 to 80 percent full-time to at least 70 percent part-time across the industry,” said Burt P. Flickinger III, managing director of the Strategic Resource Group, a retail consulting firm.

No one has collected detailed data on part-time workers at the nation’s major retailers. However, the Bureau of Labor Statistics has found that the retail and wholesale sector, with a total of 18.6 million jobs, has cut a million full-time jobs since 2006, while adding more than 500,000 part-time jobs. …

The widening use of part-timers has been a bane to many workers, pushing many into poverty and forcing some onto food stamps and Medicaid. And with work schedules that change week to week, workers can find it hard to arrange child care, attend college or hold a second job, according to interviews with more than 40 part-time workers.

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The gratuitous iPhone 5 post: Charging to stand in Apple’s queue

In case you have been living under a rock, Apple is releasing a new iPhone and if you stop by an Apple store this Friday you can get one. That is, of course, if you get there early enough. For most releases of new Apple gadgets people line up early and often in order to have the newest device a week before their neighbor. But waiting is a hassle. Or, perhaps, a market opportunity (TaskRabbit: We’ll sell ya a spot in the iPhone 5 line, CNET, Sep 13):

San Francisco-based TaskRabbit has rolled out a new program that lets people in the San Francisco Bay Area, as well as New York, purchase four hours worth of wait time in line at an Apple retail store for $55. That’s more than a quarter of the price of Apple’s entry-level iPhone 5, and $55 more than it costs to pre-order the phone from Apple’s Web site and carrier partners.

Surrogate waiting is by no means a new thing. What kind of neat here is that it is being intermediated on (potentially) a large-scale by a “distributed workforce” company.

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Logistics sweatshops

We have had a few posts about the reported poor working conditions in e-commerce fulfillment centers (see here and here). Now The Guardian has an article describing similar issues in distribution centers for bricks-and-mortar retailers (‘They shout at you and harass you’: how workers toil at Walmart’s US suppliers, Jul 25). Many of the complaints are similar to those heard about fulfillment centers: unrealistic quotas, poor pay and benefits, and a general disregard for worker safety. And, as with some of the earlier reports, these are being publicized by organizations tied to unions.

For my money, the most interesting part of the article is its characterization of the Wal-Mart’s supply chain in California’s Inland Empire.

While much recent attention has focused on abuses at the outsourced Chinese supply chains of companies like Apple, some experts believe Walmart’s US-based supply chain is built on a similar model, but one constructed within America US itself.

As is common in China, the supply chain is marked by layers upon layers of subcontracting. So, while every single box packed and unpacked at NFI Crossdock is destined for Walmart, the warehouse is owned, run and staffed by myriad other companies. The supply model has been dubbed “insourcing”, and experts say it is defined by ruthless cost-cutting as each layer of subcontracting seeks to eke out a profit margin.

“Walmart’s suppliers run out of places to squeeze out the costs, and they are left with the workers,” said Catherine Ruckelshaus, co-author of a recent report on the supply chain called Chain of Greed, that was produced by the National Employment Law Project.

Walmart is not the only big-box retailer supplied by the huge warehouses of the Inland Empire. Other major firms, such as K-Mart, Home Depot and Toyota, also work there. But Walmart sets the model for the others by its sheer size.

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Customer and employee management at the Olympics

The London Olympics have wrapped up and now it is time for evaluation. I am talking about medal counts here. Rather if we consider the Olympics as a service enterprise, were they well run?

That’s basically the question considered in an Economist article (The joy of the nudge Olympics, Aug 11). They give the organizers positive marks for how they managed Olympic goers but are less positive on how they managed their employees and volunteers.

In terms of managing customers, the game organizers have relied on some lessons from behavioral economics.

[T]he London games have been a “nudge” Olympics, where locals and visitors have been coaxed rather than coerced. Nudging, a theory developed by two American academics, Cass Sunstein and Richard Thaler, is in vogue in Britain.  …

Organisers have, for example, tried to make enjoyable Olympic experiences that might otherwise be annoying. The long trudge from Stratford station to the Olympic Park is lined with grinning volunteers, many shouting cheery messages reminding people that this is a once-in-a-lifetime event. Banners carry slogans: “You’re part of it.” Commentators rouse crowds in a similar way. It sounds cheesy, particularly for Britain. Yet it works.

Spectators have been nudged out of their cars—public travel passes were sent out with tickets—and persuaded to avoid hotspots by a heavily-marketed website that helps them plan their journeys. “People aren’t passive. They like to feel they are making decisions,” says Peter John of UCL, an adviser to the government’s behavioural insight team.

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Human resource management at Chipotle

Fast food restaurants are interesting cases to examine from an operations perspective. On the one hand, it’s a competitive business and shaving seconds off serving customers at the drive through or reducing food wastage by a small percentage can have huge consequences. (See, for example, this post on Taco Bell.) On the other, the firms in the market are not completely interchangeable so it is intriguing to see where they differ. We have, for example, posted in the past on how Pret A Manger manages it people.  Now Time has a profile of Steve Ells, the founder of Chipotle that highlights how the burrito chain selects and develops its people (The Fast-Food Ethicist, Jul 23).

The rapidly growing restaurant chain has 13 official characteristics every employee must have, and four of them basically mean happy. But if Miranda thinks I’m not qualified to make burritos because of insufficient cheeriness, then there is no way Steve Ells, the founder and a co-CEO of the company, could get a job at Chipotle either.

Sitting at the unfinished-wood conference table at Chipotle’s small, sparse, exposed-brick offices in New York City, Ells at 46 is skinny, fashionable, passionate, exacting, candid, digression-proof, smile-free and unwilling to suffer even fools who are writing a long profile about him. The reason his employee-incentive program works, Ells explains, is that it makes happy people pleasers behave more like him. Miranda is one of about 300 restaurateurs–promoted from Chipotle’s 1,300-plus managers–who get stock options, a company car and, most important, $10,000 for each employee they develop into a general manager. The program has spiked profits at the restaurateurs’ branches. “That’s because restaurateurs started firing their low performers,” Ells brags. “And their mediocre performers. What fast-food place ever lets go of mediocre performers?” Seriously, Ells could never land a Chipotle lettuce-dicing gig.

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Living and working in an Uberized world

So we have written in the past about Uber, the San Francisco based company that lets you hail a car service from your smart phone. Now both Fast Company (Stop Hailing A Taxi And Come Ride With Uber CEO Travis Kalanick, Jun 13) and Wired (For Limo Service Uber, Downtime and Idle Resources Are Fuel for Profits, Jun 22) have stories about them. The former has a nice video showing how the service works. Go here to see it (sorry, I couldn’t get it play properly here). The latter has some information on how the system works for drivers.

For its customers, Uber is a pleasant splurge, but for its drivers the service is a godsend, a ticket to a whole new standard of living. Uber doesn’t employ the drivers directly, but what it does is arguably better: It taps into the luxury rides and professional chauffeurs already employed by existing car services. Because of the inefficiency of typical dispatch systems, those cars can be empty for much of the day, even when their owners—sometimes the drivers themselves and sometimes small businesses—would love for them to be carrying fares. (Jankosky’s vehicle is part of a seven-car fleet owned by a firm called 7×7 Executive Transportation.) Uber can fill those fallow hours with brilliant efficiency. One San Francisco chauffeur estimates that the work he gets through Uber nets him more than $45 per hour, on average. Another says that his total earnings are now roughly $2,100 a week, with $920 of that coming from the service. Since the cars are already paid for and the drivers want to work, Uber is like found money for everyone: the drivers, the owners, and of course Uber itself, which takes 20 percent off the top of every ride.

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