Labor Strategy Session – Foundational Strategy<br />Proven Cost Reduction<br />
2<br />Core Practice: Company Profile<br />Founded to create flexible, low cost scheduling options for companies that don’...
3<br />Share Best Practices From Other Industries<br />Niagara Regional<br />Police Service<br />
4<br /> 2005, Core Practice Partners LLC<br />Results Oriented? It Must Be About Cost Savings!  <br />
5<br />Operations<br />& Labor<br />Employee<br />     Buy In<br />Safety &<br />Health<br />  Implementation<br />4 Key C...
6<br />Hidden Costs of Current Scheduling  <br />High overtime <br />High inventory levels<br />Inability to staff efficie...
7<br />What is a Schedule?<br />FORGET ABOUT SHIFT LENGTHS AND START WITH BUSINESS DRIVERS!!<br />A customer demand driven...
8<br /> 2005, Core Practice Partners LLC<br />Correct Policies are Critical to Success<br />Shift Change Strategies	$	201,...
9<br /> 2005, Core Practice Partners LLC<br />
10<br /> 2005, Core Practice Partners LLC<br />Profit = 10%<br />Additional <br />Profit<br />Fixed Cost = 30%<br />Variab...
11<br />Finding The Long Term Low Cost Option<br />Cost per Case<br />Current<br />Future<br />
12<br />For 100 core positions, the total annual mismatch cost = $552,000<br />Cost/Week/Position (Dollars)<br />Weekly Op...
13<br />What is your TLC (True Labor Cost)?<br />$12.00<br />Average Wage =<br />Burden = <br />Pay Ratio = <br />Cost of ...
14<br />The Implications of Different Staffing Strategies<br />Short Staffing     Even Staffing     Extra Employees<br />
15<br />For 100 core positions, the total annual mismatch cost = $232,000<br />Cost/Week/Position (Dollars)<br />Weekly Op...
16<br />OVERTIME:<br /> 2005, Core Practice Partners LLC<br />
17<br />Out of Industry Example: <br />Lost Efficiencies (37%) Occur During Low Milk Supply Periods On Wednesday and Thurs...
Employees Get Sick More Often On Fridays: <br />At Least 40% More Than Any Other Day<br />
September is the Least Healthy Month <br />September is 63% Higher than the Avg.<br />24<br />14.75 Avg.<br />
Vacation Distribution By Month<br />Migrate Vacation to the Low Season<br />146 Avg.<br />
Shift Overlap Costs = $408,000<br />Current: 3 – 30 Minute Overlaps<br />6:30 AM<br />3:00 PM<br />11:00 PM<br />1st Shift...
22<br />Drive Employee Acceptance – <br />Great Ideas Are Worth $0 Unless You Can Implement<br /><ul><li>Narrow options to...
Heavy employee interaction and input
Documented course correction based on employee feedback
Buy-in achieved through combination of participation and benchmark results</li></li></ul><li>Scorecard<br />23<br /> 2005,...
24<br />Hidden Costs of Current Scheduling  <br />High overtime <br />High inventory levels<br />Inability to staff effici...
Upcoming SlideShare
Loading in...5
×

Shift Work Scheduling Strategy: A Labor Management Crash Course

1,773
-1

Published on

In this session John Frehse, Chief Strategist at Core Practice, will share business strategies around labor management and how to remove costs from your organization. This exercise will not only educate, but will help you focus on the biggest opportunities available now. John will begin by sharing a list of the top hidden costs that most companies miss. He will then lead a short discussion about foundational labor issues including the importance of properly defining and creating a labor strategy that makes sense for your company with a closer look at pay policies. Next, strategic scheduling initiatives will be shared including how to manage variability. John will finish with a discussion about employee benchmark information that will be helpful to everyone in operations and human resources. He will accept questions at the end of the presentation.

Published in: Business, Technology
3 Comments
0 Likes
Statistics
Notes
  • Be the first to like this

No Downloads
Views
Total Views
1,773
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
57
Comments
3
Likes
0
Embeds 0
No embeds

No notes for slide

Shift Work Scheduling Strategy: A Labor Management Crash Course

  1. 1. Labor Strategy Session – Foundational Strategy<br />Proven Cost Reduction<br />
  2. 2. 2<br />Core Practice: Company Profile<br />Founded to create flexible, low cost scheduling options for companies that don’t have traditional “9 to 5” operations<br />Senior team members each have a minimum of 10 years experience successfully implementing cost savings and change management strategies<br />Rapid improvement methodology with a focus on operations and labor means cost savings are achieved within a short timeline (12 – 16 weeks)<br />Typical savings equal 11 to 17% of total labor costs<br />Implementation is done directly with the workforce <br />Heavy employee involvement means cost savings stick<br />Clients are Fortune 1000<br />Best Practices database with over 10 million data points<br />
  3. 3. 3<br />Share Best Practices From Other Industries<br />Niagara Regional<br />Police Service<br />
  4. 4. 4<br /> 2005, Core Practice Partners LLC<br />Results Oriented? It Must Be About Cost Savings! <br />
  5. 5. 5<br />Operations<br />& Labor<br />Employee<br /> Buy In<br />Safety &<br />Health<br /> Implementation<br />4 Key Components – To Be Successful, You Must Use All of Them<br />
  6. 6. 6<br />Hidden Costs of Current Scheduling <br />High overtime <br />High inventory levels<br />Inability to staff efficiently for seasonal, monthly, weekly or daily demand<br />No full time/part time/temporary employee strategy <br />Uneven skills across shifts <br />Idle labor time (overall or pockets) <br />Hard to recruit and retain good employees <br />Outdated HR policies<br />Past changes have not achieved long term results <br />Consolidation or blending opportunities<br />Not maximizing current capital <br />Inefficient and/or numerous startups and shutdowns <br />Poor forecasting tools<br />Not meeting productivity potential/goals <br />High level of unplanned absences <br />Continued/Increasing health and safety problems <br />Hourly employees have morale issues <br />Us vs. Them employee/management mindset <br />Problems communicating to evening and night shifts <br />Inefficient vacation, lunch or break staffing <br />Green Room time underutilized – shift change inefficiencies <br />
  7. 7. 7<br />What is a Schedule?<br />FORGET ABOUT SHIFT LENGTHS AND START WITH BUSINESS DRIVERS!!<br />A customer demand driven system for utilizing people and capital equipment, incorporating employee preferences, optimal HR policies, and high levels of flexibility to provide a low cost solution. <br />
  8. 8. 8<br /> 2005, Core Practice Partners LLC<br />Correct Policies are Critical to Success<br />Shift Change Strategies $ 201,000<br />Relief Staffing $ 104,000<br />Absenteeism Policies $ 292,000<br />Incentive Strategies $ 462,000<br />Holiday Shutdowns $ 215,000<br />Quality Incentives $ 126,000<br />Off Shift Retention Plan $ 147,000<br />Pay Differential $ 234,000<br />“44th Hour” $ 615,000<br />Break and Lunch Costs $ 725,000<br />TOTAL $ 3,121,000<br />
  9. 9. 9<br /> 2005, Core Practice Partners LLC<br />
  10. 10. 10<br /> 2005, Core Practice Partners LLC<br />Profit = 10%<br />Additional <br />Profit<br />Fixed Cost = 30%<br />Variable Cost = 30%<br />Labor = 30%<br />The Profit Greater As Utilization Increases?<br />Currently: 5 Day Base Schedule<br />7 Day<br />6 Day<br />Price/Cost<br />Per Unit<br />100%<br />Profit<br />Fixed<br />80%<br />Cost<br />60%<br />Labor<br />40%<br />20%<br />Variable<br />Cost<br />0%<br />600,000<br />500,000<br />700,000<br />Annual Units<br />
  11. 11. 11<br />Finding The Long Term Low Cost Option<br />Cost per Case<br />Current<br />Future<br />
  12. 12. 12<br />For 100 core positions, the total annual mismatch cost = $552,000<br />Cost/Week/Position (Dollars)<br />Weekly Operating Hours<br />500<br />160<br />400<br />140<br />300<br />120<br />200<br />Coverage Required<br />Coverage Provided<br />100<br />Staffing Mismatch Cost<br />100<br />80<br />0<br />Jun<br />Jul<br />Aug<br />Sep<br />Oct<br />Nov<br />Dec<br />Jan<br />Feb<br />Mar<br />Apr<br />May<br />Seasonal Workload<br />Staff to the Average Workload (Average Hours of Coverage =132)<br /> 2005, Core Practice Partners LLC<br />
  13. 13. 13<br />What is your TLC (True Labor Cost)?<br />$12.00<br />Average Wage =<br />Burden = <br />Pay Ratio = <br />Cost of Straight Time= <br />Cost of Overtime=<br />Adverse Cost of Straight Time =<br />Adverse Cost of Idle Time=<br />Adverse Cost of Overtime = <br />30%<br />10%<br />1.30 X<br />1.10 = <br />$17.16<br />$12.00 X<br />$19.38<br />1.0765 = <br />$12.00 X<br />1.5 X<br />Idle Time Is About 8 Times More Expensive Than Overtime<br />$17.16 - $17.16 = $0<br />$17.16<br />$19.38 - $17.16 = $2.22<br />
  14. 14. 14<br />The Implications of Different Staffing Strategies<br />Short Staffing Even Staffing Extra Employees<br />
  15. 15. 15<br />For 100 core positions, the total annual mismatch cost = $232,000<br />Cost/Week/Position (Dollars)<br />Weekly Operating Hours<br />500<br />160<br />400<br />140<br />300<br />120<br />200<br /> Coverage Required<br /> Coverage Provided<br />100<br /> Staffing Mismatch Cost<br />100<br />80<br />0<br />Jun<br />Jul<br />Aug<br />Sep<br />Oct<br />Nov<br />Dec<br />Jan<br />Feb<br />Mar<br />Apr<br />May<br />Seasonal Workload<br />Optimum Staffing (Average Hours of Coverage = 116)<br /> 2005, Core Practice Partners LLC<br />
  16. 16. 16<br />OVERTIME:<br /> 2005, Core Practice Partners LLC<br />
  17. 17. 17<br />Out of Industry Example: <br />Lost Efficiencies (37%) Occur During Low Milk Supply Periods On Wednesday and Thursday At a Cost of $367,000/Year<br />
  18. 18. Employees Get Sick More Often On Fridays: <br />At Least 40% More Than Any Other Day<br />
  19. 19. September is the Least Healthy Month <br />September is 63% Higher than the Avg.<br />24<br />14.75 Avg.<br />
  20. 20. Vacation Distribution By Month<br />Migrate Vacation to the Low Season<br />146 Avg.<br />
  21. 21. Shift Overlap Costs = $408,000<br />Current: 3 – 30 Minute Overlaps<br />6:30 AM<br />3:00 PM<br />11:00 PM<br />1st Shift<br />7:00 AM<br />2nd Shift<br />3rd Shift<br />2:30 PM<br />10:30 PM<br />FT : 112 * (1/3) * 14 overlaps * ½ hour overlap * 49 weeks = 12,805 hours ($30.02) = $384,000<br /> Temp Employees: 21 * (1/3) * 14 overlaps * ½ hour overlap * 49 weeks = 2,401 hours ($9.94) = $23,866<br />
  22. 22. 22<br />Drive Employee Acceptance – <br />Great Ideas Are Worth $0 Unless You Can Implement<br /><ul><li>Narrow options to choices that meet both business needs and employee preference
  23. 23. Heavy employee interaction and input
  24. 24. Documented course correction based on employee feedback
  25. 25. Buy-in achieved through combination of participation and benchmark results</li></li></ul><li>Scorecard<br />23<br /> 2005, Core Practice Partners LLC<br />
  26. 26. 24<br />Hidden Costs of Current Scheduling <br />High overtime <br />High inventory levels<br />Inability to staff efficiently for seasonal, monthly, weekly or daily demand<br />No full time/part time/temporary employee strategy <br />Uneven skills across shifts <br />Idle labor time (overall or pockets) <br />Hard to recruit and retain good employees <br />Outdated HR policies<br />Past changes have not achieved long term results <br />Consolidation or blending opportunities<br />Not maximizing current capital <br />Inefficient and/or numerous startups and shutdowns <br />Poor forecasting tools<br />Not meeting productivity potential/goals <br />High level of unplanned absences <br />Continued/Increasing health and safety problems <br />Hourly employees have morale issues <br />Us vs. Them employee/management mindset <br />Problems communicating to evening and night shifts <br />Inefficient vacation, lunch or break staffing <br />Green Room time underutilized – shift change inefficiencies <br />
  27. 27. 25<br />Optimization, Not Automation, Yields 23% Savings…<br />23%<br />Find economies of scale across teams<br />Minimize over-staffing<br />Increase employee productivity<br />Reduce staff turnover<br />Develop pay policies<br />Assess impact of business changes on costs (attrition, training, etc)<br />14%<br />Operational Best Practices<br />Up to 9%<br />Software<br />Labor Cost Savings<br />
  28. 28. Thank You For Your Attention!<br />www.corepractice.com<br />
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×