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Justify More Labor/Increase Labor Efficiency

What?

If your plant is in an area where it's difficult to find skilled manufacturing talent without paying a high price for it, you may want to consider using downtime reason codes to justify the cost of a new hire.

How?

1. First, determine a set of rules for instances when "need more labor" would be an appropriate reason for downtime. For example, "No Operator Available" or "Running Multiple Machines" may be reason codes that demonstrate the need for more labor. Train your operators on these instances and have them label downtime accordingly.

2. After 4 weeks of labeling, add up the number of hours lost due to these reason codes. Then, extrapolate this number over the course of one year

3. Once you determine that number, multiply it by your average rate of production. Not sure what the number is? Check out this article and work with someone from finance to see what your cost of production is.

4. Ask yourself, how many people could you hire for that cost?

  • Example: say you lost 150 hours/month because there was no operator present. If your average rate of production is $40/hour, that's $6,000 month. Over the course of one year, that's $72,000 a year—how many skilled operators could you afford to bring on for this cost?

5. Once you determine how much money you are losing each year due to staffing, use that data to justify posting more open positions, or to increase the salary range on an already open position to get better/more candidates. Bring the information to your HR representative to discuss your hiring options!

6. If hiring additional resources isn't an option at the time, try using the downtime data to justify the cost of cross-training/developing your current operators to run multiple machines.