It seems everyone is struggling with this issue. In a growing economy, growth in jobs outstrips the supply of good labor.
In addition to getting more creative in finding and attracting new employees, an often overlooked solution is getting more value from existing staff.
Think about the term value added. Truly value added activities are those which transform a material into a product that a customer is willing to pay for. A good example is a stone saw operator: Value added time for that job is ONLY the time that the blade is cutting material.
Everything else – everything – is non-value-added.
As soon as you finish this article, take a few minutes to watch your version of a saw operator. Which activities are value added and which are not? How much of your operator’s day is spent on non-value-added activities? Next figure out how can you reduce or eliminate those non-value-added activities. Would it make sense to have a low-wage helper moving product around in your shop to allow your highly skilled and higher paid operators spend more time on value added activities? What can you do to speed up loading and unloading the machine?
You’re paying for the good labor that you already have and spending money and time chasing new talent. How much of time and money is being wasted on non-value-added activities?
We have provided a worksheet in the Tools section to help you assess value add activities at any workstation.
Good news/ bad news
With the continuing uptick in economic activity and historically low interest rates, construction activity is definitely on the rise in most areas of the country. This is great news for manufacturers as it means orders are up considerably.
However, this good news comes at a price. If you bounce from job to job inside your shop instead of focusing on getting a job completed through all process steps without stopping, then this increased business is creating a lot of chaos for you.
Having a shop where everyone looks like ants running around an anthill you just kicked over may feel productive, but you are actually hurting your profitability.
Every time you touch an order without completing it costs you money. For example: If you produce granite counter tops and start cutting stone for an order only to put that order on hold waiting for a sink or waiting on a final edge profile decision from a customer or because you just got a ‘rush job’ from another customer – you are investing shop capacity to do something that you can’t readily convert to billable dollars.
To get a handle on this chaos, only release jobs to template that:
- Have all details finalized and signed off by the customer
- All deposits are collected
- The site is absolutely ready prior to template
- All materials are on hand to fabricate the entire order
Execute this well and you will begin to see the level of chaos decrease.
Drop us a line and we can show you how to get more value added from the labor you already have. Ed@WeReduceChaos.com