Wednesday, February 27. 2008The Management Help Desk for Shift Work EnvironmentsComments
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Last year our 500 person facility implemented a corporate lean manufacturing initiative. We increase reduced costs by more than $400,000 in 2007, which is what we hoped. While the savings are great, I still see a lot of labor dollars spent during our off-season for little output. We need the employees in the summer, so I don't feel we can afford to reduce staffing, but I hate wasting money. I've been researching something called "Kaizen events". Is this the best approach to labor efficiencies?
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This is the number one issue facing management teams in the United States. We don't typically layoff an entire workforce for a group of months (unless you are a teacher!!) so flexibility can be really tough. Food manufacturers feel this pain more than anyone because in most cases freshness is an issue and they can't store too much additional inventory. Everyone else doesn't want to pay for the inventory they can store and so they aren't in great shape either. If we agree that lower inventory is the right answer from a cost perspective, and asking your customers not to buy product at certain times of the year is suicide, then the only thing left to flex is the the employee base.
The term flexible schedules is thrown around a lot these days and in most cases it translates into employee abuse. Jerking employees around with no predictability, rhyme or reason is the status quo. There is a better way to go. Examining the demand curve for the year as well as weekly trends is the first step. Next, you must understand adverse labor costs and build a system that gets you closer to where you are supposed to be in the first place. This includes staffing levels by day and shift that may be different than what you have now. Next, setting a baseline staffing level that can flex up AND down for the slow periods may mean having some overtime built in. Core Practice Partners generally frowns on going below 40 hours based on fixed benefit costs (but in few cases it does make sense). In closing, taking a scientific approach to this emotionally charged issue can provide some perspective. Do your homework or call us, but either way, you typically only have one chance to get it right. John Comment (1)
I run a food manufacturing operation which helps supply a national fast food company. We run two 10-hour shifts for production, then an 8-hour shift at night for sanitation. The sanitation crew would like to work 10s as well, but our calculations prove that it would be too costly. The night crew would real longer shifts to get the extra days off like the day and afternoon crews. Any scheduling ideas?
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We use Kaizen Events to improve productivity. It's effective because employees are making the changes. It reminds me of the high performance work teams we used pre-2000. These changes are affecting small groups of people, but I want something that will impact all 700 employees. We can't pull 150 employees off the lines each week for the improvement process, plus it will take 9-months to get the savings. Any other CI programs out there that works? I'm also concerned with overlap of efficiencies because we've done so much reengineering so far.
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We run 24/7. Our #1 problem is turnover and training. 1st shift is fine, but 2nd shift is horrible and 3rd shift is actually our best performer. We have a lot of senior people who will retire in a few years, which will open up a lot of day shifts, but we're going to loose a lot of experience without much depth. How do I get the 2nd shift people to stick it out until day shift people retire? We need more experienced people to prepare for the future.
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Gail:
2nd shift is the least preferred shift and compared to 3rd shift it is twice as unpopular. 12 hour shift schedules are one way to eliminate 2nd shift. If you promote your second shift or afternoon shift to day shift you will still have to backfill the shift an the problem remains. Look at shift schedules that can solve the problem instead of just pushing it off onto the next generation. 12 hour shifts have many real and perceived issues and without the right implementation and base schedule, you are destined for failure. Do your homework and consult people that have done it before. We always recommend http://www.corepractice.com. Comments (3)
Where are American Jobs Going? China Starts to Ask About Their Own Job Market Deterioration
We wanted to include a blog post from John Frehse at his blog http://www.corepractice.blogspot.com regarding the evolution of the international job market. Developing nations are feeling the pinch as businesses shift faster to low cost options. Chinese Labor Market Feels Growing Pains- Core Practice Partners Works The Solution For Immediate Release: March 24, 2008 - Shanghai China Chinese labor is starting to see signs trouble as the government assigns more rights to shift workers and labor laws grow. Athough the average factory worker still makes around 1000 RMB (about $140 USD) each month, new rules on firing employees, workweek hours, and overtime constraints are causing some manufacturing companies to look elsewhere. Americans in the same positions make at least 20 times the Chinese wage rate, but with global competition, this is not enough of a savings. Most manufacturers are producing commodities and the margins are tight. As competitors head to areas like Vietnam to further reduce costs and increase flexibility, others are likely to follow. Looking globally at this challenge, it is clear that although markets are maturing slowly in places like Taiwan and China, they are in fact maturing. Human rights issues and employee protections are improving the quality of life of impoverished communities around China in the short term. New concerns about neighboring competition may drive jobs out of the country and hurt the Chinese labor market in the longterm. So, China is viewing Vietnam and others similarly to how America views China - a low cost provider that can hurt jobs. What happens when we run out of places to go next? The slow evolution of our global economy and the technologies that drive it will and do change the way we do business. Americans have always said that the world needs ditch diggers, too. That may not be true in 20 years as technologies from companies like Vermeer (in Iowa) replace those jobs. The fact that Chinese labor is maturing is a good sign for civil rights, but also highlights that civil evolution may be a bad thing for capital markets. Comments (3)
This is an article I copied from http://www.corepractice.com.
Shift Work Pay Is False Solution For Improving Shift Work Schedules and Employee Schedules In General - It's Not About The Money! Employees will always want more money, but an increase in pay doesn’t solve the real issues that affect morale and therefore productivity. According to shift workers, failure to identify relevant employee issues is the number one reason managers aren’t positively affecting long-term labor improvements. If you don’t ask the right questions, you’ll end up holding unproductive employee meetings that don’t address the real issues, or even increasing pay, praying that it will improve morale. Identifying the relevant issues is a good start, but how big are the issues you are facing? Benchmarking is a great way to measure your unique environment against a national industry average and provides focus and priority for developing solutions. However, solutions must be based on operational strategies. Transforming business goals into a vision that employees will understand and embrace allow companies to achieve cost savings while improving morale. The 2007 Core Practice Partners Benchmark Database consists of more than 100,000 shift worker responses from over 150 companies. The anonymous data collection process ensures employees give honest feedback on morale and labor scheduling topics such as: management effectiveness, overtime preferences, current schedule satisfaction, the importance of predictability and how life outside work is directly impacted by their work environment. Results can be sorted by industry, geographic location, company, and the transitional issues each client faced at the time of the survey. The database allows for a detailed look at how corporate behavior translates into employee morale and provides a roadmap for productivity improvements. Management teams can now effectively address the relevant issues and create a more productive, satisfied workforce. Case Study : Food Manufacturing Shift Workers With Morale Issues Threaten To Unionize and Productivity Is Down. A food manufacturer in the Midwest was struggling. Several key management roles had not been filled in the last year and the team was spread thin. Employees were threatening a union drive and productivity was down. The manufacturer needed to investigate what could be done quickly. Within several weeks, a study was completed to better understand the business and all of the employees were surveyed so management could clearly understand the issues. Comparing established benchmarks to client-specific data raised significant red flags. Many of the responses rated worse than the database averages. Quantifying each issue using benchmarks as a measuring stick provided the critical perspective required to begin creating solutions that could solve the current crisis. Contact Core Practice Partners for the results of the survey (free) Even when paid fairly, it is human nature to still want more pay and benefits. However, employees understand the local economies and pay rates a lot better than commonly thought. 77% of the employees at this company stated they felt the current pay and benefits were good. With 77% being so close to the benchmark of 81%, why, the management team wondered, would they want to unionize? But that was the key point. Management didn’t understand that in almost all cases today, employee morale is not tied to pay and benefits. Trying to solve morale issues with a pay increase only delays the inevitable distractions associated with turnover, low morale and unionization. These are expensive problems to have. By asking the right questions management discovered that 72% of the employees said things were getting worse (with relation to their lives at work). 72% is far worse the 40% benchmark, so we looked at more detailed responses to discover why. 47% of the employees surveyed were working more than 11 hours of overtime each week. At that point we added the 11 hours of overtime to their base labor schedule to see the effects on days off, weekend work and predictability. We continued our probing and found that 56% said they were working more overtime than they wanted. At many facilities employees want overtime and when scheduled the right way, the desire to work 10 to 15 hours of overtime is not uncommon. Was overtime being deployed in the right way at this facility? 62% of the employees said that their schedule wasn’t predictable in allowing them to know when they would work and when they would have time off. Overtime is a great way to meet the flexibility needs of the business, while providing employees with extra hours they desire, but it must be scheduled in the right way. If employees have no predictability with their current schedule, they won’t have the ability to plan anything personal for the weekend. No amount of pay could make up for lost time with family, and paying them more money is a way to distract them short term, but doesn’t address the schedule problem. To solve the predictability and pay off issues above, schedule options were reviewed which first met the needs of the business and then factored in the preferences of the employees. Working longer shifts enabled the workforce to meet the business needs for flexibility, while giving employees more total days off with built-in predictable five day weekends once every three weeks. By combining business needs with employee preferences these schedules became desirable. Some employees bid into those departments requiring weekend work just to get the predictable 5-day weekend breaks. In this example, we see how innovative scheduling techniques that combine the business realities with employee feedback allow real improvements in employee lifestyles. Productivity increased without extra cost to the company. In fact, labor cost decreased with fewer shift changeovers based on utilizing longer shifts. Improving schedules is only one part of any solution. If employees feel an “us vs. them” attitude about management, they will be less incented to work towards the company goals. 71% of employees stated that they felt they were part of their crew or team. Is this number good or bad? Is there any correlation between perception and communication, and what about employee feelings towards the company as a whole? Combining specific data points and using benchmarks unlocked hidden issues and gave the management team a complete picture. Traditionally, supervisors are the lifeline of information for shift workers and are considered part of their team. They are perceived to have a better relationship with employees and because they work the same schedule, they may be the only management figure employees see on a regular basis. They wondered why they were working nights and weekends while senior managers worked Monday through Friday, 9 to 5. The assumption was that no one in the office cared about them and the work they did (except their immediate supervisors who work with them on every shift). The management team thought this was “not a big deal” as they were working at least 55 hours every week and were often there late at night and on weekends. Managers regularly stated that “the workers on the floor just don’t understand.” The truth was that managers weren’t visible to shift workers and working long hours in their offices provided little consolation to the shop floor employees. Only 26% of the shift workers felt the management team cared about the employees (74% said the management team did not care). Although 39% is the benchmark (still very low), this number was critical in getting to the answer. Combining this low 26% with the only 19% who believed the management team communicated well with employees brought some clarity to the root issues causing unrest and union talks. No increase in pay was going to solve this costly distraction from productivity improvement initiatives. 52% of employees surveyed said they did not feel like they were a part of the company. Poor communication separates office staff from shift workers. Management teams typically don’t communicate well with employees, often fearing the worst and therefore not asking employees for feedback. Employees may feel removed from the goals of the organization and that can destroy morale and productivity. The scheduled monthly update meetings did not address employee concerns, although employees liked sitting down for a half hour, eating doughnuts, drinking coffee, and getting paid for it. Further analysis at this client revealed that employees didn’t want senior managers onsite every night and weekend. However they did feel that if senior managers showed up occasionally on the off shifts to answer questions, employees would feel more apart of the company. Before the employee study, management had considered ideas to boost morale including adding a new break room and repainting the existing ones. This further illustrates the importance of asking the right questions. 74% of employees felt that working conditions were good at this facility. Although below our benchmark if 80%, 74% is within the acceptable range to be considered normal. This information ruled out the possibility that the cause of widespread unrest was based on working conditions. You can’t effectively listen to employees without asking the right questions. The leadership team wasn’t listening to employees and almost spent money in an area that wasn’t a problem. The answer included several initiatives, some of which were implemented immediately and others that were gradually introduced. Senior managers utilized a new communication strategy and began working non traditional shifts once every 4 weeks. With these new ideas in place the employees felt they were finally heard and the vote to unionize didn’t pass. It didn’t even come close. Although pay increases and other paid benefits could have postponed the inevitable union vote, the only thing that could have ended the drive for good was something that didn’t cost anything. By understanding the root cause, the management team was able to provide a focused solution and no, it wasn’t about the money. The deterioration of employee morale is a slippery slope. Productivity is the first area to suffer, but it certainly isn’t the only area impacted. Turnover, training costs, product quality, and attendance issues are also heavily hit. This client realized over $1.6 million in cost saving and profit making opportunities during this process, with $675,000 directly related to morale and productivity improvements. When you cost out the impact from each area, the answer is clear: Management teams must spend more time working with employees to communicate, educate, and show that they care. It sounds simple, but communicating can be tough. Business realities aren’t always good news. Having the courage to share variability in customer demand can mean asking employees to be flexible. But when the right schedules for each employee group are coupled with an effective communication plan, this flexibility can dramatically reduce labor costs and improve a company’s profitability, while increasing employee morale. For this client, the reality was that clear communication about company direction, schedule changes, and clarity on potential issues made employees more productive and saved the client money. Most importantly, they learned that throwing money at labor challenges doesn’t create solutions, but delays and distracts employees from being productive members of their teams. Making Best Practices Your Core Practice It’s Not About The Money 115 E 86th Street Suite 53 / New York, NY 10028 / (212) 534-0539 / Fax (312) 275-7888 Comments (3)
Employee Scheduling, Shift Scheduling, and Employee Scheduling Software all seem to be the hot topics for 2008 in the labor management field. Either management teams are trying to schedule shift workers manually or with software, but one way or another they are realizing that this is, in most cases, a million dollar issue.
If you are looking for employee scheduling software, there are a few choices. We do not recommend Tugboat Software. It does have all the bells and whistles of most of the other guys, but they don't have an in depth knowledge of business strategy that is critical when solving customer issues with automation. ScheduleSoft and Kronos both have solution, but cater to different audiences. If you want a non-biased review, shoot me an email and tell me your situation. I can probably save you some headaches. SAP and the other giants don't really care about scheduling and it is more of an afterthought. Don't get involved with them especially considering they won't care about service. When it comes to operations and shift scheduling, we do that work and have for about 25 years. Check out our website and see if you can get answers to your questions for free. We are at http://www.corepractice.com. Case studies and other whitepapers on labor strategy are free to download and offer hard evidence of what works and what doesn't. Sending jobs overseas is a trend we don't see slowing down. Because of this, the best jobs will be in areas that can't be outsourced. The problem is keeping those companies competitive with the high wages that the American market currently commands. Food manufacturing, mining, and power companies are key examples of sectors that will remain domestic. Parts of the phone company and other service organizations will also stay in country. A serious overhaul of these areas will occur as unemployment rises and more competition for these jobs develops. Comment (1)
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The Management Help Desk for Shift Work Environments
Tracked: Mar 31, 05:54