Early Warnings: Avert Nasty Timeclock Surprises
Automated OT prevention, schedule monitoring lower labor costs for expanding franchise
Corner Bakery Cafe, the fast-casual chain based in Dallas and started in 1991, is on an expansion tear. Late in April, the Dallas Morning News reported that the company’s 29 “franchise partners” had signed deals to open more than 350 locations in the next eight years, more than doubling its current number. Part of the chain’s attraction is its per-location sales of $2.3 million, one of the highest in its restaurant segment. Other draws, noted Camille Lee-Johnson, a new franchisee opening in Jacksonville, Fla., were CBC’s “ability to expand the catering program and the addition of forward-thinking technology.”
One of those far-seeing technologies, just finishing a three-month trial, has been applied to controlling labor costs, an imperative intensified by rising wage pressures and the Affordable Care Act. Gary Price, president since the fall of 2012, came to an organization whose labor scheduling, like those of many, was based on spreadsheets. “At that time, we had no schedule enforcement. There was a lot of opportunity here to help improve our economic model as well as ease overall operations for our general managers… by controlling overtime and getting better control of labor rules compliance.” One third of CBC’s stores are in California, he notes, with particularly stringent labor laws. Violations of which, of course, can result in steep fines or worse, class-action lawsuits.
Corner Bakery Cafes have run Xpient point-of-sale systems for the past five years, and time-clock systems from the same vendor. But the system gave operators a rear-view mirror view of labor schedules — too late to prevent early clock-ins or unapproved overtime.
The company drew up an RFP and sent it to 10 bidders; selection took three months.
Must-Haves in Timekeeping
CBC’s requirements included full integration between POS, timekeeping and scheduling. “It had to be fully integrated, and a single end-to-end solution. It also had to all come from a single vendor, says Price. Some companies take separate solution parts from separate vendors for labor, food management, cash, and HR management. “For us, this was not a good answer. You have to have a strong internal IT department to make all those components talk to each other. That takes a lot of time. For us, speed-to-market was paramount.”
“The system knows that Johnny is supposed to come in at eight o’clock, so if Johnny comes in a 7:30 and clocks in early, the system will say, ‘No, you’re not supposed to clock in until eight. You have to go get manager approval,’ eliminating what I call ‘pirated’ time.”
It also had to be software-as-a-service, and enterprise level. It needed very powerful above-store reporting, with an easy-to-use dashboard that could easily be pulled up through any browser, or on an iPhone or Ipad. “We needed for our managers to see ‘Here, in these four stores that I oversee, here’s what my labor is, my overtime, here’s my food costs variance,’ in a snapshot view.”
Two finalists came to Dallas for two days of demos in front of CBC’s IT steering committee, made up of home office IT support personnel and multi-unit franchisees. Price says that the group’s selection of Altametrics’ e*SmartClock was unanimous.
What won the customer? First, “It was fully integrated with forecasting. Food service is a just-in-time manufacturing facility with a retail component. It’s important to have just the right number of people on hand to produce just the amount of product you need to meet your sales demand. The ability to adjust the schedule accordingly, while you’re writing it, was very important. Also the ability to configure the system with different triggers, which trip in real time.”
In this case, forecasting as well as labor scheduling were provided through a concurrent purchase, Altametrics’ e*Restaurant management solution. (While e*SmartClock works with other vendors’ schedulers, choosing two components built to mesh by the same vendor yielded richer functionality.)
Asked to clarify POS-labor integration, Price explains: “e*Restaurant is constantly pulling data from the Xpient POS. It sees the transactional volume. It has history loaded in it, so It knows that on this day last year you sold 30 chicken pomodori paninis and 12 club paninis. Based on what you sold last year and on that forecast, it has an algorithm that helps you put the right people in place. It also has an algorithm that tells you, hey, you need to produce x amount of chicken pomodori paninis and have that prepped.”
But the system is even smarter than that: “Yesterday — Cinco de Mayo — is a good example. That changes our business flow.” Price recalls. “We’re not in the Mexican segment, so if we’d scheduled that Monday the same as last year’s we would have been overstaffed. The system knows and adjusts labor for the holiday.” It also lowers the amount of food prep required, preventing waste.
Equally important is the ability to monitor labor costs in real time. “e*Restaurant is a fully integrated system, with a very robust forecasting engine that helps managers very easily write a schedule. Because it’s integrated with e*SmartClock, the system knows that Johnny is supposed to come in at eight o’clock, so if Johnny comes in a 7:30 and clocks in early, the system will say ‘No, you’re not supposed to clock in until eight. You have to go get manager approval.’ Eliminating what I call ‘pirated’ time — clocking in early or clocking out late – not clocking out for scheduled breaks – that’s where you gain labor efficiency and help the economic model.”
Clocking in and out with e*SmartClock’s fingerprint verification also eliminates buddy punching — a more flagrant piracy. Price also notes that eSmartClock’s prominent interface has made employees much more schedule-conscious.
Perhaps most important, e*SmartClock actively alerts managers to employees about to go into overtime, with enough advance notice to avoid that extra expense and have them end their shifts. In fact, says Price: “ We’ve almost completely eliminated overtime. We’ve got much tighter control on food cost and overall labor cost.” And if business is slower than forecasted, e*SmartClock notices. Set with the right triggers, it can notify the manager that “you might want to put someone on break, or send them home.”
Also important to Price was reducing administrative workload. “Formerly, operators would have to take the transactional data from the POS, print it out, key what they prepped manually into the spreadsheet, and then it would spit out what it needed [in kitchen inventory]. It was just a fancy calculator. It was very administratively burdensome. For managers to be able to hit a button and have e*Restaurant do all that — that’s saving them about 90 minutes a day — time they could be spending the time doing what they do best — which is ensuring that we’re serving the highest quality bakery products on the market, ensuring great guest service to our customers in the dining rooms, and spending time with team members and ‘bread heads,’ making sure they’re trained to do their jobs appropriately.”
Forecasting Based on Tasks, Not Dollars
Corner Bakery Cafe is also changing the way it forecasts labor needs, to a more precise model based on actual tasks required instead of sales volume. e*Restaurant can be configured to use either method as well as others. Price used the services of an industrial engineering firm that performed time-and-motion studies, loading the system with the time it takes to do everything required to prep, cook, plate and serve anything on the menu, as well as all ancillary restaurant tasks. With this info, the system can now take what it’s been told about those man-minutes, combine that with what menu items it knows are sold on any given day, and come up with a much more accurate labor forecast.
In other words: A $2,500 sales volume based mostly on easily assembled sandwiches requires much less labor than $2,500 sold in chicken pomodori paninis. Knowing the difference prevents over- or under-staffing. “For managing a national chain, this allows us to allocate our labor dollars appropriately,” says Price.
e*Restaurant’s Labor Scheduler clearly displays employees’ weekly hours, color coding by role. It can also present all needed roles to be filled, ensuring complete coverage.
e*Restaurant has also made it easier for CBC’s accounting staff, according to Price. “They can pull invoices and pay partners more easily.” Its HR functions, tied to a separate payroll system, have made it easier to deal with managing a 4500-employee workforce.
Spanning eight company-owned stores in five states and Washington, D.C., the three-month test proved e*SmartClock’s ability to enforce a widely varying range of labor laws. “There are very specific rules that limit the working hours of high schoolers, for example,” says Price. Break rules also vary from state to state; which are mandatory, and paid or unpaid? E*SmartClock and e*Restaurant were going into two more stores the week after our interview, and the first franchisee the week after that. After beta is completed, a national roll-out is slated for August.
Price says that e*SmartClock deployment was an overnight affair in each store. With e*Restaurant running in the Altametrics cloud and user access via URL, there were no servers to install at each store, only e*SmartClock hardware and software. “Each e*SmartClock only took a few hours with a little training, basically to show employees how to clock in and out.”
Integration with the chain’s Xpient POS systems is a configuration step, says Price: one that’s already been done behind the scenes, for all franchisees. “ Once we’re satisfied with the beta we’ll just turn it on.” The system will be part of what CBC sells franchisees.
“Franchisees helped choose it and want to use it,” he says. I think it will help us accelerate our growth. This will help them make a greater return, so they’ll want to build more restaurants more quickly.” Future plans may include the solution’s mobile applications, allowing employees to use their own devices to see or make change requests to their schedules and receive training.
While he won’t give us more than a “cautiously optimistic” forecast for e*SmartClock and e*Restaurant, Price admits that all CBC’s goals for the systems have been met to date. “We’re right on track and on budget. Knock on wood, for an IT project so far, it’s gone as well as I could hope for.” And as for Altametrics, “They’ve been an outstanding partner for the whole process, from RFP to answering our questions, helping us get things configured. It’s why they have the largest installed base of this system in the industry.”