Hema invests in efficiency as European expansion continues

Dutch retailer Hema, which recently launched in the UK with a store at London Victoria station, says it is benefiting from recent investment in its workforce management processes.

The value chain, which sells low-priced homeware, apparel and fresh food, says that the work it has undertaken to amend its supply chain has reduced labour costs, improved worker productivity and given the business better visibility of labour demands.

Hema has been working with supply chain solutions provider JDA Software to bring about changes to its internal operations, as the business eyes further expansion into Europe. The retailer has around 650 stores in the Netherlands, Belgium, Luxembourg, France, Germany and now the UK, but is looking to grow its estate in the 12 months ahead.

Using JDA's workforce management solution over the last six months, Hema says it has been able to reduce labour costs by €3 million, improve employee productivity by 3% and increase scheduling accuracy by 18 percentage points, as well as eliminating 200,000 hours of labour with reportedly no negative impact on customer service.

Mischa Gijrath, efficiency manager at Hema, commented: "When we started the project, we chose certain algorithms that matched our business.

"Nowadays, the forecasting engine on sales is off by only 1% or 2%. That is a really, really good result. If your sales forecasting engine predicts the sales quite well, it's our experience that the metric that provides your labour demand is also quite good. That gives us a lot of insight into labour demand and costs, which enables us to improve our customer service by having the right people at the right time and in the right place."

Gijrath added that using JDA's systems have helped the retailer rank its stores by productivity levels and offer a transparent view of which employees are working and when. The tools are also being used to assess the future of its business processes.

"For example, the food department is always very time-consuming, and we had already implemented several improvements in our daily business processes to achieve better productivity," the efficiency manager explained.

"The JDA labour standard gives us insight into other improvement possibilities. For instance, do we still need service with pastries, or can we use self-service? Can we change the way we wrap products, or the way we check out? JDA has enabled us to start a productivity improvement programme to answer these kinds of questions."

Hema's London store opened in June store, marking the company's arrival in the UK, but the business now has shops in Bromley and Kingston.

A UK eCommerce operation has since been launched, with the retailer eyeing further store openings across the country in the year ahead.

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