doing more with what you have: optimization through ...€¦ · analytics, here we are focusing on...

Doing More With What You Have:Optimization through Workforce Analytics

industryinsights

Table of ContentsIntroduction

Definitions Context: Staying Competitive in Manufacturing Workforce Analytics: Doing More With What You Have

Examples of Workforce KPIs

How SchedulePro Analytics Work

Opportunities, Not Obligations?

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3industry insights • Optimization through Workforce Analytics

We prepared this brief for those in the manufacturing industry who are faced with a common conundrum: the need for staying competitive is just as intense in the globalized landscape, but opportunities for increasing output seem scarce. Even with the most sophisticated software and cutting-edge equipment, there isadifficultyinimprovingprofitmargins.

In this context, the problem is not with the physical equipment in the plant as with hard assets, output potential is pre-defined.Butwithhumancapital, productivity can vary greatly depending on levels of engagement and overall job satisfaction. So a worthwhile question to pose is about who is involved in the process and how optimally they are performing. The human dimension in manufacturing analytics has been absent for a long time, simply, due to a lackofdata.Butweb-basedtools in workforce management are quickly changing the competitive landscape by giving access to important insights such as overtime rates, under-utilized resources, compliance violations, and more. This

new knowledge can enable executives to make data-driven andhighlyeffectivedecisionson workforce organization and even planning, and ultimately make employees happier, safer, and more productive.

Recognizing the depth and varianceinthefieldofworkforceanalytics, here we are focusing on the key data derived from employee scheduling. Employee scheduling software is a unique platform for analytics because it creates a pool of useful data whilefulfillinganimportantand independent function. This bring us to the idea of ‘doing more with what you have’. The data collected through analyzing workforce schedules isamajorbenefit(andinsomeways, a by-product) that is both opportune and unprecedented.

Now enterprises can gain exclusive visibility into their workforce, while reaping a high ROI through streamlined processes.

Introduction


Analytics

Analyticsisanimportanttermtodefine.Broadly,itreferstothefieldofusingdatatoimprovebusiness,whetherthroughmetricsor complex algorithms. In this brief, we refer to analytics as a deep process of data analysis which can reveal relationships such as causeandeffect.Forexample,trackingapatternofabsenteeismto identify the employees at risk of leaving involves analytics. In contrast, a metric would simply state the number of sick days per employee without connecting the dots to possible scenarios.

Dashboard

Adashboardisanefficientwayoforganizingmetricsandanalytics for maximum readability and by extension, actionability. Workforce data serves its true purpose when it can be linked to higher corporate goals and get translated into decisions. The best waytoensurethisisbymakingdatabothvisual(throughcharts,graphs,andmeters)andvisible(prioritizedandeasytoaccess).Abest-practicedashboardfulfillsthesecriteria,inadditiontobeingaccurate, real-time, and customizable.

ERP

Enterpriseresourceplanning(ERP)systemsarewidelyusedinmanufacturing to provide an integrated and comprehensive oversight of plant activities. As a cornerstone in modern manufacturing, this software controls and also aggregates data across many applications that range from product planning, manufacturing, marketing, inventory, to shipping. Modern suites can encompass diverse HR functions in payroll, training, and workforce planning. Traditionally, ERP systems are focused on managing physical equipment, and precludes the area of workforce management as a product focus.

Definitions


KPI

Alsoknownaskeysuccessindicators(KSIs),keyperformanceindicators(KPIs)areawayofmeasuringsuccessinabusinesssettingthatisorientedtowardsspecificstrategicgoals.Assuch,theycanmanifestdifferentlyfrombusinesstobusiness,although adhering to industry standards is useful and important for benchmarking purposes. In manufacturing, best-practice KPIsincludeoverallequipmenteffectiveness(OEE),turnoverinequipment and personnel, and ratio of up-time vs. down-time in equipment, among many others.

Lean manufacturing

“Lean” is a philosophy that has shaped manufacturing processes since the 1990s. Originally derived from the Toyota Production System(TPS),leanmanufacturingisbasedonminimizingwastein order to concentrate on value-adding activities. In addition to measuring production output, quality is also a key tenet in this philosophy, although in this brief, we will abbreviate a thorough discussionassuchandfocusontheprincipleofefficiency.

Metrics

Metrics is a term often used interchangeably with analytics, but there is a key distinction between the two terms. Metrics bythemselvesarequantifiablemeasuresofperformanceandproduction and they are not necessarily presented in business-orientedtermsasanalyticstendtobe.WhenidentifiedasaKPI,metrics are just as critical and can often serve as building blocks for more complex analyses.

SaaS

SaaS stands for Software-as-a-Service, which is a popular method of delivering technology to businesses that uses the ‘cloud’ infrastructure. Unlike on-premise software which needs to be purchased, installed, and deployed to hardware separately, SaaS is a scalable solution that uses a subscription-based model for keeping an application up-to-date and functioning optimally. TolearnmoreaboutSaaSanditsbenefits,readourwhitepaper,TheDefinitiveGuidetoGoingSaaS.

http://www.edpsoftware.com/portfolio-posts/guide-to-going-saas/


Manufacturing is a pillar of many economies and touches every aspect of modern industry and society. Since industrialization began, there have been several developments and paradigm shifts that have revolutionized the process to dramatically increase production. An early example is the assembly lines used to build theFordModelTintheearly1900s,whichwassoefficientthat in its peak year of output, Fordmademore cars than all other automakers combined. In just 10 years, the cost of a Model T dropped by 75% and Fordbecameanindustryleaderand benchmark, with the power to set prices.

This illustrates the impact ofprocessefficiencyonabusiness’s competitive edge. The concept of maximizing output while minimizing input andwaste(=efficiency)holdstrue in all manufacturing contexts. Lean manufacturing is a production philosophy made influentialandsymbolizedby the success of another automaker, Toyota. Emerging as an articulated methodology in the 1990s, the principles are thought to be responsible for the steady growth of a small

Japanese company into the largest automaker in the world. In essence, it emphasizes the elimination of activities that use resources without adding direct value to consumers.

This “lean” thinking underpins the development of technological tools in the manufacturing sector. ERP systems are designed to oversee operations and show how the hard assets and resources are being utilized and identify areas for repairs and improvement. Bytrackingallthemovingpartsin a plant, the aggregated data paintsapictureoftheworkflowand gives a critical end-to-end oversight in large and complex work chains. The information serves as a driving force for making process improvements andincreasingprofitmarginsbyeliminating waste.

ButwhileERPsystemswillproveindispensable for a long time to come, the manufacturing sector is facing the law of diminishing returns, where the value of efficiencyimprovementshasplateaued. Even as pressures such as global competition and outsourcing heighten the need for advances, processes have seemingly reached a critical

point where the gains become marginal. Short of saying that the current model has been perfected, there is no ground-breaking development on the horizon. Even as innovation continues in making machines moreefficient,themodelitselfhas stabilized.

Enter workforce analytics. New technologies are quickly unearthing new realms for investigation and improvement and mapping the interactions between hard assets and human capital. Workforce insights can answer previously neglected questions of who and how. Who is working the overtime shifts? Who is best-suited to work in specificshifts?Whoisatriskoffatigue and should be given a break? Also, how are the shifts being scheduled and based on what criteria? How optimal are thoseallocatedshifts?Beforedelvingintothesespecifics,wewillfirstelaborateontheideaof‘doing more what you have’.

In short, analytics help manufacturers become more efficient. Beyond measuring the output of equipment, workforce management is providing a new realm for improving performance.

Context: Staying Competitive in Manufacturing

http://corporate.ford.com/our-company/heritage/heritage-news-detail/672-model-t


The importance of KPIs

We live in a data-driven world where the range and volume of information is exponentially increasingyearbyyear.Fromcustomers to operations to workforce, there is seemingly no end to sources of data, either. And consider that the proliferation of smart devices makes information more accessible to a lot more people, alotmoreeasily.Butdataalone is not useful, and can lead to information overload and burnout if not harnessed and interpreted correctly. In order to capture its full value, there needs to be solid guiding principles and techniques for transforming bytes of data into value-adding change.

Key performance indicators (KPI)canserveasthatlensfornavigating through the age of BigData.Theframeworkallowsenterprises to set priorities, and then methodically implement ways to collect, track, and analyze information. It works as a channel for connecting metricsfromthegroundfloorto corporate goals. The impetus for improvement can work both ways: unusual data patterns can trigger an action item for management, or often, strategic directives from higher-up can trickle down and incentivize tracking of certain data.

Important manufacturing KPIs such as overall equipment effectiveness(OEE)followaveryspecificformula,whereeachcriterion(availability,performance, quality) is then composed of various measures.ThisqualifiesOEEasa compound metric, beyond a single dimension. This process can yield insights that connect the dots across multiple areas of an organization to give a more holistic view. With industry-standard KPIs like OEE, it also becomes possible to benchmark against best-practice competitors.

In short, KPIs allow businesses to collect metrics that correspond to corporate priorities. Simply put, what gets measured gets done, and what gets rewarded gets done again.

Workforce Analytics: Doing More With What You Have


Workforce as the new frontier

As mentioned previously, most existing software in manufacturing such as ERP software is focused on equipment and other hard assets.Butthispresentsamathematical challenge. When calculatingtheeffectivenessofmachines,laborefficiencyisnotconsidered. This oversight can cause a discrepancy between expected output and real output, with no clear way of accountingforthedifference.Ifthis continues, business outlook will consistently be hampered by blind spots.

With labor, the reality is much morecomplicated.Forexample,fatigue is a common and well-documented phenomenon that can not only disrupt productivity, but also pose risks for the safety of everyone. In a more subtle manner, a sub-optimal delegation of shifts can stagnate productivity as well, such one employee being repeatedly scheduled for overtime instead of several employees sustaining a better balanced work pattern. In the language of lean manufacturing, these missed opportunities represent “wastes”.

Previously, these labor considerations were ignored due to the lack of a solution. When employees are being scheduled ad-hoc on pen and paper or on Excel, there was no easy way to either manage theworkforceeffectivelyortocapturerelevantdata.Butthe reason we are now able to characterize losses in labor productivity as “wastes” is precisely because there is a better alternative. With web-based scheduling software, thereisawaytofixtheprimary pain of poor workforce schedules and in addition, gain an unprecedented access to a wealth of analytics.

In short, while it was a previously neglected area, workforce analytics are gaining new momentum as a result of new advances in workforce management technology.



Workforce scheduling as the bedrock

So what is so special about workforce scheduling software? Surely, there are several components that make up a successful workforce management, and furthermore HR and ERP environments. Butworkforceschedulingisthefirstpieceofthepuzzlebecause it is where you start to do more with what you have. Even before discussion of hiring orfiringemployees,itisaboutfindingandschedulingthebestemployee to work every shift, in every schedule you create. It is optimization in the truest sense, allocating resources to where they are most needed without causingdisruptiontoworkflowsor requiring demographic changes.

Workforce scheduling software can accomplish this as a virtue of two things: how it is built and how it is delivered. While therearedifferencesbetweensoftware(readourBuyer’sGuide for a more in-depth discussion), customizability tends to allow for greater optimization. When asystemisconfiguredtoacustomer’sspecificcomplianceneeds and scheduling nuances (e.g.forassigningovertime),theaccuracypotentialforfindingthe best possible employee increases. The method of delivery, then, refers to the comparative advantages of using SaaS solutions versus on-premise software. The most cutting-edge features are being developed by SaaS vendors who emphasize frequent updates, scalability, and adaptability to changing needs. A good foundation, as explained above, serves as a good source of analytics.

In the big picture, having an optimized schedule already achieves the goal of increasing efficiency.Intheory,itseemsthat a “perfect” schedule will yield a correspondingly perfect analytics report that shows all key metrics in balance. However, reality is rarely quite simple. Two scenarios that leave room for analytics to further investigate andoptimizearefirst,acapacityproblem and second, ad-hoc situations. The former refers to not having the right number of resources, thus requiring structural changes such as hiringandfiring,orre-trainingemployees for high-demand qualifications.Thelatterreflectsthe reality on the ground, where last-minute changes can occur anytime—someone calls in sick, equipment breaks down, and emergency situations mayrequireadditionalstaff.In this case, the goal is to recognizethatbufferroomisalways needed and to allow forflexibilitysothattherepercussions are minimized.

In short, workforce scheduling provides a unique opportunity for channeling and sourcing key data about the workforce, while solving a critical business need.


http://www.edpsoftware.com/portfolio-posts/buyers-guide/


Here we will introduce a few examples of workforce KPIs that can be derived from workforce scheduling. These metricsfulfillthecriteriaofkeyperformance indicators, in that theyarespecific,measurable,achievable, relevant, and time-phased(SMART).Thereareother implications of optimized scheduling that, albeit abstract, merit a mention, such as higher employee satisfaction and improved communication between employees and managers.

Under-utilization (Graph1)

This refers to the ability to track how many extra employees there are on every shift by location. At many facilities, employees work on set shiftpatternsandmayfindthemselves working as an extra. Therefore, these employees are not directly creating value for the business. Scheduling can solvethisproblemby“shuffling”tofindthebestcombinationofemployee shifts. In rare cases ofconsistentoverstaffing,theemployees may be moved to a differentdepartmentorbere-trainedfornewqualifications.

Overtime rates (Graph2)

Overtime rates are a common pain for managers in any industry. They are a drain on budgets, and when persistent and pushed to the limit, fatigued employees can be a real risk to workplace safety. Understanding patterns of where overtime is occurring can encourage proactive decisions on hiring more resources or distributing training requirements more evenly across the workforce. Compliance violations Compliance issues are closely tied to tracking overtime rates, as many labor regulations center on hours-of-work limits.Theramificationsofcompliance violations include fines,increasedriskofincidents,as well as possible reputation damage arising from incidents. Beyondnumbers,loggingthereasons for each violation can help businesses understand the root causes and take relevant actionstofixthem. Other KPIs include the ratio of planned work vs. unplanned work and the ratio of up-time vs. down-time, and many more.

Graph 1 - Shows the percentage of surplus staff by location.

Graph 2 - Shows the percentage of overtime hours by location.

Examples of Workforce KPIs


SchedulePro is an industry-leading workforce scheduling software that is used at manufacturing plants across North America. Our strength is in delivering solutions that are tailored to specificschedulingneedsandnuances of each customer. With a unique ‘pluggable’ platform, oursystemcanbeconfiguredtoaccommodate any combination of work rules, no matter how complex. Having a foundation that optimizes your workforce gets your business ahead of the curve even before data enters the picture.

Our analytics features have evolved in line with customer needs. At first,webuiltcustomreportsto meet the auditing and data-collecting needs at enterprises. Add report after another, and it was not long before we realized how much insight lies in our scheduling data. After just weeks of scheduling, customers build up a reservoir, a wealth, of valuable knowledge about their workforce: how are overtime rates distributed across locations, where is the surplusstaffingoccurring,whatare the most frequently-occurring compliance violations, and more. We realized that this information is too powerful to keep untouched.

Now, workforce analytics is a product priority—we are passionate about unleashing the potential of workforce data to transform businesses. We believe this knowledge should serve asthefirststepinworkforcemanagement. This data is not meant to disrupt or prescribe; it’s about allowing visibility into an often-misunderstood, but critical, element in businesses and empowering both employees and managers to connect the dots.

We have 3 guiding principles that summarize our philosophy:

Real-time

Data analysis sounds like an intimidating task that takes endless days of crunching numbers, scavenging through piles of paperwork, and drawing up multiple charts and diagrams. At SchedulePro, we take care of the back-end wiring so that you can cut through the paper chase. Instead of waiting for weeks to gather data, and then another week to analyze the collected data, we serve up information as it happens, sourced right from the schedule. In our dashboard, you can get an immediate look at data suchasratioofvacantvs.filledshifts and the ratio of production vs. non-production hours.

Accessible

Once enough data has gathered, converting the information into actionable items is the next step. Our reporting features allow the user to manipulate the data according to needs: for any specifieddaterange,forselectedgroups/locations, for certain types of rule types, and more. And once the data has been organized, it can beexportedintoanyfileformatthattheuserdesires.Thisflexibilityensures that the information can be accessed at every level oforganization,tofitwhichevercontext. Customized

This follows directly from our approach to workforce scheduling. Customization is core to our company philosophy and we believe in prioritizing your unique needs and goals, rather than asking you to learn our way of doing things. In analytics, this means understanding your reporting structure and building features that reinforce your strategic priorities and enhance your success.

How SchedulePro Analytics Work


Having discussed in-depth about the power of workforce analytics, we will close by openly acknowledging a dilemma for businesses. Areas to oversee and improve are seemingly endless, ranging from better equipment, better processes, to better software. With so many tools available, and with so many solutions touting to reduce bottom line, how do you move forward with workforce analytics as a business priority? The truth is, analytics are still relatively new and as a business focus, they do not carry the sameurgencyasfixingbrokenmachinery or dealing with complianceissues.Forsometime to come, they may be considered a “nice-to-have,” rather than a pressing item that can directly impact business from day one.

Here is where we make our case. Analytics derived from workforce scheduling are where the stars align to make lives easier for everyone, from employees and managers to executives atop. The very process of solving a critical business need—allocating employeesefficientlyandsafely—yields invaluable insights about employees.

As software providers, our job is to wire the data so that users can access information directly, right away without delay. Analytics should not add a complicated and cumbersome layer to an already complex work chain. This is why we emphasize “doing more with what you have” instead of “doing more with more expensive and hard-to-use tools”.

This also brings us to the key takeaway: business decisions around the workforce are made everyday,fromthegroundfloorto the executive meeting room. Fromdecisionsonhiringmorepeople, training employees in certainqualifications,tosimplyscheduling shifts, there are choices being made at every level of the organization. Status quo is not a good enough answer to continue making decisions in the dark. Especially in the increasingly competitive business landscape, analytics are not mere opportunities, but an indispensable dimension to operating a business in the modern day.

Opportunities, Not Obligations?

About Us

SchedulePro is an automated and web-based solution for employee scheduling in medium to large organizations. It has a unique ‘pluggable’ technology that can customize to any combination of compliance needs and deliver optimal results.

EDP Software is a leading provider of web-based and custom workforce management software. Our main product is SchedulePro, which delivers tailored and cutting-edge employee scheduling solutions forenterpriseslikeFordandShell.Wealsoofferuniqueanalyticsandreportingfeatures, in addition to time and attendance and payroll integration. We are located in thebeautifulGastowndistrictofVancouver,withofficesinOntarioandNewBrunswick.

Contact 55 Water Street

Suite315,3rdfloorVancouver,BCV6B1A1

Phone:1-877-501-7776

Email:[email protected]

Website:www.edpsoftware.com

© 2014 EDP Software. All rights reserved.

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