Game of Inches
I love football, especially, American Football. I grew-up in San Diego as a fan of the now displaced Los Angeles Chargers. For better or worse, they are still my team, that is, until the NFL decides in its infinite wisdom, to bring a team back to my home town. Anyone who loves football knows that it’s truly a game of inches. An inch can be the difference between a 1st down or a punt, 3 points or no points, a touchdown or a turnover on downs. Inches are the difference between winning and losing, and even an inch matters.
This is true in business as well. To be successful in today’s competitive and global business climate, inches translates into percentages, dollars and cents, margin, efficiency, production, and time. To ignore the opportunity for potential gains in these categories can be the difference between a satisfied customer and a negative review, hitting or missing production targets, or booking that big order and keeping your team busy versus drowning in raw materials. The business of manufacturing, like football, is a game of inches.
I won’t be Ignored
Workforce Management is one such area that is measured in the smallest increments for Manufacturers and Distribution companies. Notably, demand-based scheduling is often overlooked in these industries as a means of quality, efficiency, and even employee engagement. The industry is built on the age-old system of fixed schedules, three-shifts with a weekend flex, and a workforce where everyone gets 40 hours a week, plus the opportunity to grab overtime. This model has been the backbone of American Manufacturing for centuries – but new technology and offshore margin pressure is exposing weakness.
Technology advancements in robotics, AI and AR, machine learning, and analytics – along with a new generation of workers with very different expectations for work and engagement, have forever altered the competitive landscape. These “business inches” are now visible and transparent for all the world to see, and if you don’t focus on squeezing-out operational improvements, someone else will. It’s time to leverage a modern, digital Workforce Management system as a competitive advantage – not just a tool.
There’s a Playbook for that
Let’s look at the playbook. Workforce management is not just employee timekeeping that feeds a payroll system punch data. In today’s game of inches, we need to start with a deeper understanding of the demand profile and its relationship with standards and quality. How many widgets need to be built or assembled, and in what time frame? With this foundation, staffing plans and schedules can be determined with more accuracy and at a lower cost. In other words, you avoid running an inside dive play on fourth and long. Okay, enough with the football analogy. Let’s ask a few hard and direct questions.
- Do you have data to support your instinct as to which team can produce the most widgets?
- Which team or site can pick, pack, and ship with the greatest efficiency?
- If you’re behind on targets, can you automatically schedule high performers to fill the gaps?
- Do you know both direct and indirect labor costs related to a repeat customer order?
- If you get a large order today, do you know if you have the capacity and labor to fill it?
- Can you see, in real time, total labor cost when compared to other sites or divisions?
- Can you guarantee schedule and pay compliance with 400+ wage and hour laws in effect today?
If you answered “no” to any of the above, you are giving-up inches to the competition, and to the bottom line. Waiting until tomorrow to extract key performance indicators about today, will quickly turn those inches into yards, and yards soon enough will become insolvency. You’re beating yourself. But, preparing to win in today’s game of business could be as simple as taking four steps – like four downs – that each build on the other. Daily commitments and investments in WFM will yield measurable results, as follows:
- Engagement (First Down): a modern WFM system will motivate employees to use and adopt the system – not because you’ve mandated it rather the insight and relevancy that it offers about themselves and the work that they do. Further, by staffing employees based on their skills and preferences, you can expect lower schedule costs, less accrual liability, and better retention.
- Compliance (Second Down): a compliant WFM system that automates pay rules and schedules employees in accordance with Union or FLSA rules (and at a lower cost), can eliminate wage and hour disputes while improving margins and overall profitability with each pay period.
- Cost (Third Down): an enterprise WFM system will lower schedule costs, reduce payroll, eliminate FLSA risk, and provide real time visibility to labor analytics and total related costs. Under the most conservative estimate, think of achieving just a 1% improvement in each area to the bottom line.
- Efficiency (Fourth Down): an industry-specific WFM system will improve production visibility and throughput efficiencies. Further, your employees will be better at what they do because they will better understand the (exact) measurement of quality. What could you do with a 1% margin add?
The Chargers aren’t coming back to San Diego but I still love them. And, I doubt that I’ll be able to adopt the next team that shows up – so, I’m stuck. But, you’re not. Workforce Management is one business application area that consistently delivers on its promise to deliver ROI. It answers the right questions about the Manufacturing process and its people, and in a timely manner. In this context, inches become yards and yards become competitive advantage and much improved profitability. We all love to play that game.
Robert Means, Area Vice President, Manufacturing, Americas @robertmeans
- Infor Workforce Management