1 SAP Thought Leadership Paper Workforce Scheduling and Optimization Optimized Shift Planning and Scheduling Creating Shifts and Aligning Resources to Match the Forecasted Workload
3 Table of Contents 5 Shift Structures and Patterns Tackling the Shift-planning Challenge Employee Needs, Desires, and Preferences Automated Shift Scheduling Optimizing Staffing Levels About the Author Stewart Hill is the director of Corporate Marketing at ClickSoftware and a veteran of the mobile workforce management and service optimization industry. He is the primary author of ClickSoftware s minibook Service Chain Optimization for Dummies.
4 Service organizations often look to roster changes to help meet operational goals like increasing efficiency, productivity, and customer satisfaction. But work schedules and roster changes are delicate subject areas. Changes to either can elicit strong emotions and adversely affect employee satisfaction. Explore how automated workforce scheduling of shifts coupled with better anticipation of demand can help you make informed staffing decisions while keeping employee preferences in mind.
5 Matching Resources to Your Environment Shift Structures and Patterns Tackling the Shift-planning ChallengE Employee satisfaction often plays a vital role in the overall success of service organizations. Happy employees provide better customer service. They increase productivity through reliable attendance and efficient work, and they are less likely to leave their jobs. This results in low employee attrition and decreased recruitment costs for replacing employees. In contrast, disgruntled employees reflect poorly on their organizations. Not only do they speak negatively about their employers, but their productivity and work quality decrease as a result of their attitudes. In some instances over the past few years, strike action in response to scheduling changes has either occurred or been threatened in many countries. To help meet operational goals, service organizations often look to roster changes to achieve higher levels of productivity, customer satisfaction, and costeffectiveness. But employees are very protective of compensation arrangements and working conditions, and it s unclear whether roster changes can achieve greater efficiency without upsetting employees. Both areas elicit strong emotions and opinions, even when changes to these are simply proposed. Closely aligned with these areas, and also of importance to employees, are working hours and the impact they have on family life. Employees appreciate predictable and reliable shift patterns as well as early visibility of future shifts. Changes to these patterns can become highly contentious. To be efficient and keep operating costs under control, organizations need to focus on their macro- and microeconomic environments and not simply dismiss unpopular changes. This often necessitates organizational change, such as reviewing and revising shift patterns. By not responding to changes in their environments, organizations risk becoming outdated in their operations, with inefficiency fast becoming endemic. Shift patterns may remain unchanged for many years, decades, or even centuries, but businesses themselves and their environments change. These patterns are not necessarily relevant, therefore, in today s competitive environment. Herein lies the first part of our challenge: designing shift structures and patterns that are relevant to the environment within which an organization operates. Staffing at a Constant Capacity When shifts are staffed using a constant capacity, there is always the same number of people working. This is the organization s supply of labor. This schedule does not realistically consider the real demand anticipated by the organization, so there are periods of capacity shortage alongside periods of overcapacity. Capacity shortage occurs when the number of people allocated to a shift is insufficient to accommodate the amount of work. This has numerous negative implications that will vary depending on the industry: Slower response times for fire and police emergency services result in dangerous and potentially lifethreatening outcomes. Increased waiting times for rail customers purchasing tickets lead to frustration, decrease customer satisfaction, and gradually erode passenger demand, as customers choose other modes of transportation in the future. Slower average speed of answer in call centers and contact centers means that customers wait for longer periods of time before speaking to someone. This results in increased call abandonment rates and increased inbound call volume as customers try calling again, thus further increasing answer times. Increased response times in field service environments for the utilities industry elongate power outages and delay responses to emergencies such as gas and water leaks. Not only do emergencies inconvenience and potentially endanger utility consumers, but they may eventually contravene regulatory requirements, thereby resulting in the incurrence of significant and costly fines. Increased response times in general field service environments for maintenance, installation, and repair events potentially lead to customer dissatisfaction and increase the chances that customers will switch to more efficient competitors in the future. SAP Thought Leadership Paper Optimized Shift Planning and Scheduling 5
6 Contingency Plans To counteract negative outcomes, many organizations have contingencies in place, such as contracting resources to increase the total capacity and volume of work that is managed on a given day or during a given shift. Companies may use contracted resources as a planned arrangement that outsources part of the work on a routine basis or on a shortterm basis in response to a peak in demand. Alternatively perhaps even additionally organizations may resort to paying overtime to employees to either prolong the length of their shifts or temporarily increase capacity by having more people working a particular shift than initially planned. Whether an organization uses contracted resources or pays overtime wages, there is one attribute associated with both approaches: cost. Both approaches increase operating costs. Although companies may anticipate and budget for them, these costs potentially represent deep operational inefficiencies within the organization. Overcapacity In contrast to capacity shortage, overcapacity increases employees idle time because there is not enough work to keep everyone busy. One benefit of overcapacity is that employees are always available to quickly respond to customers. So the average speed of answer improves, and the call abandonment rate decreases in call centers and contact centers; retailers can expedite home deliveries; and gas or water leaks are rapidly constrained and corrected. Although overcapacity may offset some of the problems common to capacity shortages, it highlights the unbalanced nature of operations and leads to a particularly large problem: employee dissatisfaction. This is especially true when employee pay is related to productivity in terms of the amount of work completed every day. Underutilized and inactive employees may become bored, which may eventually lead to increased staff attrition and turnover as employees seek more engaging employment. Attrition and turnover further elevate an organization s operating costs and inefficiencies through constant recruitment efforts. This point segues into the second part of our challenge: designing shift structures and patterns that take into account the needs, desires, and preferences of your workforce. A fundamental principle for managing your organization s service chain is having the right number of people, in the right places, at the right times, with the right skills to provide timely service to your customers.
7 Employee Needs, Desires, and Preferences A fundamental principle for managing your organization s service chain is having the right number of people, in the right places, at the right times, with the right skills to provide timely service to your customers. This is a difficult challenge, particularly when you consider that employees have preferences about their desired shifts and limitations on their availability and flexibility. Even if shift planning manages to balance employees requests, employees may subsequently decide to trade shifts with colleagues, potentially unraveling all prior planning. To avoid problems with trading, shift planning and trading processes must be adequately managed and controlled. Workload demands and employee preferences are often at odds, so service managers and HR managers should ask themselves the following questions to help reduce and avoid conflict: Is it possible to consider the demand forecast when shift planning, to have more people available at the times when they are required and, therefore, have better coverage? Is it possible to use flexible shift patterns that vary frequently, rather than static shift patterns, to improve operational efficiencies and reduce costs by having people available only when they are needed? Is it possible to automatically create flexible shift patterns and schedules, which are built in accordance with business demand and employee preferences, rather than having to manually create and manage this process? It s difficult to overcome the shiftplanning challenges involved in matching the design of shift patterns to expected demands while also considering employees skills, competencies, availability, location, and preferences. Additional factors to consider include customer satisfaction, industry regulation, operating costs, efficiency, and employee satisfaction. Despite the number of variables and challenges involved in shift planning, it is important to remember that overcoming such challenges is possible. Difficulties with Manual Scheduling Manually creating shift schedules and manually creating employee rosters for work schedules are inefficient practices, because the scheduling burden often becomes a full-time role for some employees or even a much larger team. It is a burden on those in charge of scheduling to manually redefine shifts, shift schedules, and rosters, and the longer these schedules remain static, the more established they become. Over time, this causes shifts and shift schedules to become outdated, thus resulting in capacity shortages and overcapacities. Although maintaining the status quo to provide predictability and stability may seem like the easiest With complete automation, changes to shift schedules are quicker to test and implement, with the scheduler able to quickly identify and resolve any gaps in capacity. Shift trading also becomes more manageable and transparent. SAP Thought Leadership Paper Optimized Shift Planning and Scheduling 7
8 approach and most practical solution, it does not respond to an organization s true operating environment and needs. As such, it is surprising that so many organizations decide not to make changes to their scheduling structures and patterns. Perhaps these organizations want to avoid the disruption, unrest, and uncertainty that proposed schedule changes can introduce, such as those outlined in our introduction. So the question remains: What can you do to make a positive change? Automated Shift Scheduling The first step in reducing scheduling complexity is to focus on automation. This does not necessarily mean throwing away the years of effort that have been invested in creating the existing shifts and shift schedules as they are still usable in the short term. Automated shift scheduling can use existing shift patterns to expedite the creation and management of future rosters by assigning people at the touch of a button, literally, as illustrated in the following figure. With complete automation, changes to shift schedules are quicker to test and implement, with the scheduler able to quickly identify and resolve any gaps in capacity. Shift trading also becomes more manageable and transparent. Optimizing Staffing Levels Automation plays a vital role in improving operational efficiencies with regard to optimization. One of the primary business objectives outlined earlier is realigning static shift patterns to better meet an organization s demand. Shift patterns that have remained unaltered for many years are predictable and comfortable for employees, but they can result in capacity shortage and overcapacity with their corresponding challenges. This is where optimization becomes a vital part of the solution. Within shift planning, optimization is the process of logically creating shifts and shift schedules that match the forecast workload the demand. Figure: Automated Assignment of Resources to Schedules
9 There is a major difference between the traditional and optimized methods of shift planning and scheduling. An organization s demand is highly variable and tends to vary by time, day, week, and month, and for many other reasons. This means that shift patterns and schedules will vary, possibly even daily, because of the need to efficiently match shift planning, availability of resources, and capacity of resources to the demand. If the demand changes, then so do the shifts. Optimized shift planning therefore necessitates that an organization must make the greatest effort possible to calculate the demand forecast accurately. Factoring in Employee Competency Demand is only one part of the equation; another is employees. Optimized shift plans and shift schedules take into consideration employees skills, competencies, locations, and preferences, as well as wider business rules such as working time directives and union agreements. Thus, they provide the absolute best overall match for both the organization and its employees. Even with the power and benefits provided by optimization, a small degree of error will remain because demand will always be variable. Optimization minimizes the margin of error, with results evident in the levels of capacity shortage and overcapacity. Optimization makes it possible to conduct demand-based shift planning and scheduling via an automated, accurate, and efficient process that does not alienate employees. The process can be tailored to allow employees to trade and bid for shifts that suit their preferences and lifestyles. Benefits of Optimization The benefits derived from optimization affect many departments and people. The following benefits are neither exhaustive nor indicative of what might occur in your organization. Your organization may aim to translate the benefits of optimization into other areas such as resource utilization and productivity. Learn More All the processes outlined in this paper are enabled by the SAP Workforce Scheduling and Optimization application by Click- Software. This application encompasses manual, automated, and optimized shift planning, shift scheduling, and roster generation, plus appropriate forecasting and simulation tools. It is a solution that encompasses every aspect of the workforce, regardless of role, location, or function, plus it accommodates both mobile and office-based workers. SAP Workforce Scheduling and Optimization is a solution extension that integrates with SAP software and complements the functionalities within SAP solutions. As with all solution extensions, SAP tests, validates, and supports the application so that you can rely on a high level of quality and commitment. For information, visit orkforcescheduling. SAP Thought Leadership Paper Optimized Shift Planning and Scheduling 9
10 Cost Control and Savings By adopting the demand-based and optimized planning approach, periods of overcapacity and even costlier periods of capacity shortage are minimized, thus reducing total operating costs. Another benefit of optimization is that organizations can quickly identify whether they are employing sufficient resources for the levels of service that they want to provide to customers. Customer Satisfaction Improvements in customer satisfaction that are achieved through quicker response times manifest themselves in several areas and not necessarily in direct measure to customer satisfaction surveys. Increases in repeat and new business and reductions in the number of customer complaints reflect a happy customer base. Employee Satisfaction Initiatives to reduce costs and improve customer satisfaction are likely to be impaired if employees are not content in their roles. Considering their preferences, assigning them to roles that complement their skills, and providing them with tools to trade shifts with colleagues all contribute to overall employee well-being and happiness. Optimized shift planning and scheduling transform the operation and efficiency of service organizations. Service organizations that embrace this new way of operating will be most able to compete and succeed in the future. With today s economic environment pressuring organizations in every industry sector to reduce costs and increase efficiency, the acceptance and deployment of optimization are no longer a matter of if they are a matter of when. Optimization makes it possible to conduct demand-based shift planning and scheduling via an automated, accurate, and efficient process that does not alienate employees.
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