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Why you may have the platform of a work-force management technology system and not know it

by Stephen Hawley Martin
for Virginia Business
January 4, 2007

When was the last time you read something that caused you to dramatically change the way you manage your business? I've been editing a book that has that potential. Called "Working the Clock," it's about a revolutionary new business tool called Workforce Management Technology (WMT). It uses data from automated time and attendance systems to enable executives to "see" what's really going on in their businesses.

Some companies run sideline businesses or build certain products that lose money, for example, but they don't know it. Overall, the company might be making money, but a few products or business units may be very profitable and make up for the losers. An enhanced automated time and attendance system can help determine the winners and the losers.

One company I know of manufactures a product for which a single subassembly, one that may or may not be required depending on a customer's needs, takes seven hours to complete. By tracking the labor time on units with and without the subassembly and calculating the actual cost to build them, management was able to determine that customers who require this subassembly were being undercharged.

The same product has another optional subassembly that requires 25 hours of labor. Sometimes customers want both these subassemblies. At other times, only one or the other is required. Accurate work-force data enabled the manufacturer to take a realistic look at what the various combinations actually cost to build. Pricing was adjusted up on some units and down on others so that each variation remained competitively priced, but at levels that made all of them profitable.

The data also helped the company get smart about how work was scheduled through the plant. Imagine the wasted manpower and poor plant utilization if an entire line was held up for 25 hours because a unit needed a particular subassembly.

Alternative routes were created that send products requiring extra steps along different paths. At times units would rejoin the main line, and then veer off again while an infrequently-called-for subassembly was installed. This might be compared to scheduling local trains that stop at every station and express trains that run nonstop from one large city to another. At times the local train will need to get off the main line onto a side track so the express can speed by and not have to slow down and wait.

How is information collected about how much labor went into a particular task? A number of ways exist including time clocks and telephones. Another way is barcodes. Visualize a laminated sheet attached to a clipboard with rows of barcodes on it representing different activities. A barcode-reading wand can be positioned nearby. As a product moves into a workstation for a subassembly to be installed, the employee simply scans the appropriate barcode. When he's done he scans another. The product moves to the next workstation, and this is repeated.

The information this produces can be use in several ways. It can be used for cost accounting as described above. It can measure a particular individual's performance against others who perform the same task. It can help establish the interval of time required for a particular operation. Or it might be used to calculate the pay for individuals who are compensated on a piecework basis.

In any event, it is valuable data that can be used to help a company run its business more productively, yet many top executives don't realize it's information that may not be all that difficult to get. If your company already has a time and attendance collection system, you may already have the platform of a Workpforce Management Technology system, and not even know it.

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Stephen Hawley Martin is a former principal of The Martin Agency in Richmond and the author of more than half a dozen books including his newest, Lean Enterprise Leader: How to Get Things Done Without Doing It All Yourself. He is editor and publisher of The Oaklea Press, a book publishing business dedicated primarily to helping business executives increase productivity.