Action plan

Time and attendance (T&A) systems of one kind or another have long since been used by manufacturers, and their benefits and limitations are well known – or so, given the name, you might be forgiven for believing. But modern systems are not just about recording hours for payroll and preventing the practice of 'buddy punching', using biometrics. Nor are they only about managing absence and holidays, or supporting flexible working or even skills and certification management, useful though such functions can be. In fact, modern systems are also being put into service covering anything from controlling access points around sites, to managing roll calls for staff in emergency situations, particularly on large sites where hazardous processes are the name of the game. Latterly, however, there has also been a move among some manufacturers to turn their T&A software to providing considerably more – in particular activity tracking of people, as opposed to the machines, and operations around production. Sounds like Big Brother? That is, perhaps, a danger, but for Chris Buckley, service director for workforce management at software developer RedPrairie, it's the ultimate in ensuring a fair day's work for a fair day's pay. He makes the point that there is no fairness in expecting employers to pay for time that hasn't been reasonably spent working. Equally, it is hardly equitable to require employees to perform difficult or poorly thought through operations. So turning T&A systems to monitor detailed performance issues is only reasonable. And it can work both ways: with proper consultation of unions and staff, early adopters of activity monitoring are defining engineered labour standards that take account of real world factors, to provide fair, accurate and consistently achievable productivity goals for all employees on a per-job basis. "These standards also provide management with objective measurement data, supporting the introduction of performance-related incentive programmes for individuals and teams that consistently achieve targets," states Buckley. He also refers loosely to the benefit of the Hawthorne effect, which stems from research at Western Electric's Hawthorne Works back in the 1950s. This study – at the time, aimed at analysing data for best lighting levels – demonstrated that workers become more productive because of nothing more complicated than the fact that they are being monitored. However, it also showed that such improvements would be short-lived, with performance returning to baseline once monitoring stopped. Most important, though, Buckley propounds the unassailable view that "the greatest value of workforce management systems comes from improving the methods used to complete each task to be as efficient, accurate and safe as possible". In other words, automated activity monitoring systems can be invaluable in directing and tracking continuous improvement (CI) initiatives, supporting everything from identifying priority areas to enabling the detailed job analysis and the development of improved methods, jigs, set-ups and the rest. They can also help with the definition of associated performance standards and the training of workers and supervisors – and management. Productivity boost Buckley claims that productivity improvements of up to 35% are realistic from such sustainable CI work, as well as a further 20%-30% from associated incentive schemes. Manufacturers might well want to challenge those figures, but many would be happy even with far smaller percentages. So let's look at a couple that have taken the plunge and are currently working through various aspects of extended T&A, with a shared goal of increasing productivity and cutting costs, without jeopardising industrial relations. Garden watering equipment manufacturer Hozelock is one. Operations director Simon Noakes describes its implementation of Kronos' activity management module at the Birmingham site as about underpinning improvements in workforce flexibility and performance. He explains that the organisation initially equipped its portfolio of injection moulding, extrusion and blow moulding equipment with Barco Dextralog production systems to monitor and improve individual machine cycle times and performance, drive TPM work and assist with investment decision making. Going for Kronos was, he says, largely about achieving equivalent goals with its people and processes, particularly around Hozelock's assembly lines. In fact, Hozelock also had another incentive to buy into Kronos. The organisation already had a legacy workforce performance system that was not only no longer supported, but also did not match key milestones recognised by the company's QAD Mfg/Pro ERP system. It also only reported against individuals, departments and the overall site picture, using a separate database – not by line, production work area or product type, as per the ERP system. And weekly production reports only emerged four days after the previous week end. "That late, our meetings were just about justifying why we had failed, rather than understanding why and how we might change," comments Noakes. "So having made substantial changes to the business, consolidated our manufacturing on to one site, and seen effectivity improve, the next phase was to implement a much more up-to-date people performance measurement system. Changing to Kronos meant we would be able to monitor attendance in real time, as well as migrate decision making to local management, instead of everything having to go back to payroll," he continues. "Then, with a much better foundation in place, we could add the activity module and, for the first time, get visibility of where exactly we might be underperforming – enabling us to dig down and get to the root causes." Noakes reports that T&A was up and running within four months, but that activity management took longer – partly because of Hozelock's requirement for non-standard bar chart reports showing utilisation, effectivity, etc, by line, and partly a need to clean up some of the ERP data and gain the benefit of a single database. That meant, for example, tidying up standard production times held in Mfg/Pro for Kronos and consolidating redundant intermediate booking steps. He also says that, although the ultimate system may well see all employees and agency workers swiping on and off jobs, for the moment that is restricted to site access. Duration and output data on specific jobs are entered by local team co-ordinators, who also allocate people to the work. Once the system went live in December last year, however, the benefits were both surprising and fast, in equal measure. "We introduced it part way through our season, so we didn't expect too much at first. In fact, most of this year was supposed to be about gathering information on individual and line performance so that we could see where to target improvement activities next year. But very soon after we started having weekly reviews of the previous week's data, we found that effectivity had already improved about 2% over last year on the assembly lines. It appears that, because everyone was aware that we could now see and track performance in real time at a local level – instead of only globally – they were more focused on output performance and actions." It was the classic Hawthorne effect – except that Noakes makes the point that this improvement has not been short-lived, because performance monitoring is ongoing and constantly in the limelight. And there was more: Kronos also quickly revealed that some lines had been running consistently above accepted standard cycle times. "Although we had some idea that this may be the case, Kronos was able to provide us with factual data that proved it. That allowed us to take about 12% off the labour cost for certain product lines, without doing anything – and the real production rate is now the standard in MfgPro," comments Noakes. "We didn't anticipate that. We thought the system would target the poorer performing lines, and it will. But because we hadn't had the micro level of detail, it has also flagged 'over-performing' lines." That said, he states that the focus has since moved back to underperforming lines, with a goal of identifying route causes and taking steps to solve them. "We're already seeing success: in some cases we've started projects to re-engineer certain aspects of the lines, and in others we're revisiting training and method studies. In a few, we're looking to transfer assembly back from the main production lines into plastic processing, where operatives can do the work within the cycle time of the machine and run more frequently, rather than just now and again," explains Noakes. "We're already at 86% effectivity, so we know that improvements will be small and incremental, but it all adds up." What about the future? "Next year, we'll be focusing more on some of our individual jobs, where performance figures can fluctuate dramatically. It's about understanding why there are these variations in jobs that, in some cases, we've been running for years. Is it the manufacturing engineering? Is it the frequency of these runs? Is it the skill levels required? At the moment, we don't know for certain." All clever stuff, but how about other manufacturers' experiences? One major company in the offshore oil and gas drilling sector, with hundreds of sites around the world, also reports success. The company, which prefers to remain nameless, is currently rolling out T&A (also Kronos) worldwide, having completed go-live throughout its US operations last year – with around 300 sites on T&A and 75 of those now running with activity tracking. "What we liked about Kronos was its additional applications, and in particular the ability to collect labour data with time data," says the T&A systems manager. "We had already been collecting labour data manually against work orders and operations at some sites, both to get insight into what's going on and to develop better standards. But it was labour intensive and prone to errors, so the ROI from automating theses processes was obvious." Kronos, says our man, would also automatically reveal indirect time versus direct time, and show managers where there might be opportunities to make improvements that would positively impact shopfloor efficiency. And that has been his experience. "Kronos opened people's eyes; the data helps them look at things differently. For example, one site in the US, with over 1,000 staff, had a policy that meant every employee spent the end of shift time cleaning their stations. When they saw how much direct labour was being consumed and looked at what they were paying them, they realised it didn't make sense. They would be better off hiring people to clean full time and leave shopfloor operatives working on jobs." And he lists other improvements as including validated production standards, based on real per-part production cycle time data; and a new initiative to drive targeted training, using Kronos Analytics to compare operators and operations. "The ability to standardise an entire site, even a company on T&A and labour data capture is extremely important," says the spokesperson. "The value is outstanding: providing top level management with this data allows them to make better informed decisions about everything from staffing levels to operations." For the future, he says the organisation will also implement the absence and attendance management modules of Kronos, to improve the more conventional aspects of HR and compliance. In the meantime, 20 UK sites now have the standard Kronos T&A suite, and work is well underway to implement the activity management side on all of them, with completion anticipated in Q1 2012. "Any manufacturing company could benefit from this software. This is powerful. It takes the guesswork out of production management and is the fastest route to real, sustainable improvements," insists our man.