Utilizing More of the Available Hours
OK, so we’re a one-shift, five days / week, operation. What’s wrong with that?
Well, nothing is WRONG with that shift pattern. But, changing to a multi-shift crewing pattern might offer some significant operating and competitive advantages. Let’s look a bit deeper.
Here’s an illustration of the plant and equipment utilization of an 8 x 5 operation:
There are 168 hours in a week (24 hrs/day * 7 days/week = 168 hrs/week).
On an 8 x 5 schedule, we are utilizing 40 of the 168 available. Plant and equipment are unavailable for work 128 hours, or 76% of the time!
But what happens if we were to move half of our workforce to a second shift?
As shown above, by simply moving half of our workforce to the off-shift, we have doubled the availability of the plant and equipment.
So what’s the advantage of that, you ask?
Actually, there are several very significant advantages to doing so:
1) We can typically cut our manufacturing lead times in half
2) We will free up cash and space via inventory reductions, and
3) We have effectively doubled our tooling and equipment!
Let’s use a simple example to illustrate the lead time impact:
In the above example, we have four sequential operations. Each operation requires eight hours of process time.
And, as the illustration shows, our minimum manufacturing lead time is four days.
Now, suppose we transition to a two shift operation, with 50% of our workforce now on the 2nd shift.
Now, operation 1 occurs on the first shift of the first day, and operation 2 happens on the 2nd shift of day one, etc. What happens to our average lead time?
Correct: By doubling the available hours, we can half our manufacturing lead times!
It is important to note that we DID NOT INCREASE OUR TOTAL HEADCOUNT.
We still have the same number of people, and essentially the same amount of capacity. By moving half of our workforce to the 2nd shift, all we have done is make more of the 168 hours available for production.
Now, instead of our product sitting idle 16 hours per day, it is only sitting idle 8 hours per day.
What is the impact on the amount of Work In Process (WIP) inventory?
Correct again. By utilizing more of the available hours, we can cut our manufacturing lead times in half, which also cuts our WIP inventory in half. This frees up cash and space.
Note: If you are a “make to stock” operation, one of the factors used in calculating the appropriate level of Finished Goods inventory is the replenishment time. Cutting your manufacturing lead time, i.e. the “replenishment time,” should also allow you to reduce the amount of high dollar finished goods inventory needed to achieve the same fill rate.
But how does moving half my workforce to the 2nd shift, add to the amount of equipment and tooling available?
Let’s look at our 8 x 5 situation:
What happens if a machine breaks down? What if you’d like to double the output on a product, i.e. use two pieces of equipment to make the same part number, but you only have one set of tooling? Fully manning all operations severely limits your operational flexibility.
But what happens if we move half our workforce to the off shift?
Now, if a machine breaks down there’s a possibility that the operator can still be productive on another machine. This availability of equipment and tooling also allows for the possibility of one operator running two machines.
Maintenance and change-overs can be done without taking a machine off-line. In fact, many of our clients were able to dedicate a machine to a high running product and completely ELIMINATE the change over for that product!
Spreading a portion of your production processing into the traditionally “off” hours can also have a positive impact on your utility costs . Most electricity utilities bill their customers via a variable rate schedule, with the standard “eight to five” time frame having the highest rates. In our area of the country, the “day shift” rate is 2.1 times as expensive as the night shift rate! In some energy intensive industries this rate difference can have a significant impact on the total cost of goods produced.
As you can see, utilizing more of the available hours has a major impact on company well-being. But why stop there?
With our two eight hour shift operation, we are still utilizing less than 50% of the available hours. How do we improve on these gains?
Well, you could go to a three shift five day week. However, another alternative has some significant advantages.
A client of ours had been attempting to add capacity by creating a second shift. They ran ads for over six months, with no success. People just didn’t want to work that shift.
We proposed to our client that they offer a four day, ten hours/day, shift. The catch was that the four work days might not be Monday through Thursday, and might include a Saturday (this is known as a staggered crewing schedule). Examples of this shift pattern, and many others, are illustrated in our article “Alternate Crewing Schedules.”
We also proposed that the start times for the second shift be adjusted to allow parents to be at home for dinner with the family before coming to work. They ran an ad for a four day work week, with starting time, 8:00 PM.
The results were amazing! People were standing in line to get on that shift.
A full second shift was in place and operational within a few months. Then the first shift’s hours were also adjusted to ten hours / day, four days / week, with staggered crewing.
Tooling, equipment, and crewing are now available 120 hours of the total 168.
Lead times and WIP inventory can be cut by two thirds.
Let me emphasize; none of the alternate schedules shown above increase your total capacity. In each example, we have the same number of people, working the same number of hours / week. However, if you should need to add capacity, the infrastructure is now completely in place. Just add people. The equipment and a trained workforce “core” are already on hand.
To further enhance flexibility and responsiveness, we would encourage you to consider moving toward the “Rubber factory” concept. Doing so provides the necessary Capacity Flexibility to respond to changes in the level of demand.
Note that your improved responsiveness can, and should, be leveraged to gain both market share and price.
Needless to say, there is a considerable amount of additional information that goes beyond the introductory scope of this discussion.
There are ways to gradually transition to any of the illustrated crewing structures that do not disrupt people’s life’s. There are also ways to incorporate similar options for your non-production processes, and ways to cover all shifts without adding supervisory or manufacturing support personnel.
Going to the ten hour, four day shift pattern will impact your holiday and vacation pay schedules as well.
We can help you with these and other related issues.
If you would like to address how multi-shifting might apply in your specific situation, drop us an e-mail or give us a call. There’s no charge, and we’ll do our best to be helpful.
All the best on your lean journey toward World Class operating performance.
PS: You might also find our article “How to Optimize Your Entire Plant” applicable.