Monday, March 30, 2009

Leading Shiftwork Consulting Firm Outlines How to Manage Shiftwork Operations During a Recession

A leading shiftwork consulting firm, Shiftwork Solutions LLC, noted that when the economy is healthy and growing, managers of shiftwork operations tend to focus on increasing sales and expanding the business - often by changing their employee work schedules to enable 24/7 coverage.

During a recession, however, most executives focus on reducing capacity and cutting costs, which may mean operating only 5 or 6 days a week. Shiftwork Solutions explained the most efficient ways to approach these goals.

Reduce Capacity

When demand for a company's products drops for an extended period of time, it may be necessary to curtail production. In many shiftwork operations, the number of people required may not change when the output changes. For example, a facility may need 15 people when it is producing 250 cases an hour. It may need the same 15 people when it is producing only 25 cases an hour. In these situations, it is best to operate equipment at its most efficient production rate, and reduce the time the equipment is running to less than the full 168 hours per week.

Cut Costs
When cost cutting is the goal, staffing levels are often the first item looked at. Other opportunities to improve productivity and lower the labor costs per unit of production are often overlooked, for example:

  • Shift-to-shift communication practices. Smooth shift hand-offs allow operating efficiency to be maintained throughout the day, improving labor and equipment utilization.
  • Shift routines. Do machines need to be cleaned after every shift, or should they be cleaned only when they're dirty? End-of-shift cleaning routines often become an excuse to line up at the time clock at the end of each shift.
  • Maintenance and production scheduling conflicts.
  • Unnecessarily starting and stopping equipment at breaks, lunches, and shift change. This can lower quality, increase equipment breakage and downtime, and results in lost time to perform the stop/start routine.
  • Travel time and unauthorized break extensions result in lost time, production, and poorer service.

Management decisions

According to Dan Capshaw, a partner with Shiftwork Solutions LLC, "Managers may be reluctant to change their shift schedules, especially if they put a lot of effort into changing to a 24/7 culture. They may now be afraid that backing off from continuous operations will waste the effort invested to get to the 24/7 schedule." Shift schedules that don't match the workload are very expensive. For example, if you have 300 employees making $15 an hour, a 5% mismatch between the required coverage hours and the scheduled hours would cost about $468,000 a year for wages alone.

If you change the shift schedule, what happens when demand goes back up? Jim Dillingham, also a partner at Shiftwork Solutions LLC, says that the answer is to prepare the workforce to return to their 24/7 schedule even before you change it. Carefully communicating the need to change today, as well as the likely need to return to higher capacity schedules in the future can keep the door open for variable economic conditions. You are much better off continuing to respond to your business requirements, and fostering a culture of flexibility and responsiveness rather than keeping an inefficient schedule in place because it was hard to implement.

Consultants from Shiftwork Solutions LLC have helped hundreds of companies in a variety of industries to develop shiftwork solutions that satisfy business requirements, employee preferences, and health/safety considerations. The company's two partners, Dan Capshaw and Jim Dillingham, have worked as consultants in this specialized field for more than 17 years apiece.

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