Many food and CPG manufacturing facilities are faced with the reality of improving their operations or risking plant closure. It is not uncommon to have a plant running below target on production goals while running over target on budgeted payroll and unit costs. What process and technology improvements around labor allocation can provide the visibility that’s critical for needed change?

Organizations that have automated employee scheduling are reaping tremendous gains across key business metrics including improved productivity, increased labor utilization and better product costing.

Case Study

• The customer: a specialty frozen dessert manufacturer with plants across North America.
• Hourly Employees: 320
• Number of SKUs: 100
• Union: BCTGM (Bakery, Confectionery, Tobacco Workers, and Grain Millers Union)

The Challlenges
Prior to ScheduleSoft this particular facility was unable to schedule its labor based on actual production demand. They staffed to what they believed was the right labor standard. This meant regardless of actual demand, the same labor standard was applied and any extra people were sent home on a voluntary basis. The facility was below its peers in production levels while payroll was over 100% of budget and capacity utilization was below 85%. There were frequent disputes between corporate and the plant over finite planning and although a 10% variance from production plan became acceptable, far larger variances were occurring.

The plant had inconsistent employee scheduling practices across shifts and departments and was settling 5-10 solicitation grievances per month. There was a strong suspicion of idle labor but no data available to uncover it. In addition, they lacked tools that provided visibility into labor cost by production line, SKU, day or shift so costing product accurately was virtually impossible. Worse yet, when an opportunity came up to take on additional production based on the plant’s utilization rate of less than 85%, they had to pass because even though there was a suspicion of idle labor, there was no visibility to it. This scenario represents a revenue opportunity that is permanently lost.

The Solution
ScheduleSoft provided the plant with the data necessary to actively compare deployed labor to labor required based on the actual production plan. Using this data, the facility uncovered a significant amount of idle labor and was able to determine more accurate labor standards for each product. The plant now combines direct, indirect and fractional staffing requirements and as changes in production occur, they are able to dynamically change their people requirements.

By scheduling to product mix and associating SKUs with deployed labor, the facility is able to accurately cost product runs. The facility now schedules its labor to what is actually being demanded by the production plan rather than scheduling to budgeted labor levels. This has resulted in like production mix labor savings of 12%.

The hard benefits don’t end there. ScheduleSoft has also provided a fair and accurate scheduling process which has helped the facility significantly reduce the number of grievances resulting in cost savings that alone is estimated to be in excess of $100,000 per year.

The Soft Benefits
Along with the hard cost savings ScheduleSoft provides, this food manufacturer has also reaped significant “soft” benefits. As part of the ScheduleSoft implementation, the organization reviewed its scheduling practices and procedures across all facilities. Doing so helped create a single standard by which to schedule workers which creates transparency in the scheduling process and translates to fairness and equality.

Employee engagement has improved by giving workers more control over the scheduling process.  Employees can now easily manage their shift and overtime preferences or request time off. Improved accuracy in seniority-based shift assignment and ScheduleSoft’s systematic capture of overtime equalization metrics helped improve employee morale. 

The Bottom Line
All of these benefits translate to an ROI that is rapid, and for this particular plant, it translated to uncovering enough idle time amongst its workers to be able to increase production by an additional two lines.

To find out who some of our customers are or to see a demonstration of the ScheduleSoft solution, contact us at 1-800-416-9006.