Business, Case Study

Why Spend more?

A manufacturing company was under pressure to increase production for key product lines and defer investments in new plant and equipment.  The company decided to use overtime to fill the gap.

Using overtime allowed production volumes to increase, but this strategy also led to longer term outcomes that included:

  • inequity amongst employees for overtime opportunities,
  • added stress and obligations to cover additional hours each week, especially for certain skill sets and individuals,
  • fatigue from working over 60 hours per week
    • although the average overtime sounded reasonable (53.33 hours per person), only half the workforce was interested in overtime, so individuals working overtime averaged 68.66 hours per week,
  • increased costs,
    • hours exceeding 38 in a week attracted double time and time and a half premiums, and
  • uncertainty of coverage
    • many workers started calling in sick on Mondays after working weekend overtime.

To assist, Shiftwork Solutions designed alternative roster solutions using ordinary hours of work, adequate breaks between work cycles, improvements in shift handovers and better utilisation of key equipment.

As a result, production levels increased without new capital expenditure, unit production costs reduced, and the company received a return many times their initial investment within the first 12 months.  The company saved $600,000 per year, while meeting their duty of care obligations for employee work hours.

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