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Making the Change to a
24x7
Shift Work Schedule
by Jim Dillingham - Partner, Shiftwork Solutions
One of the most common reasons that companies contact us at
Shiftwork Solutions is that they need help designing and implementing a
schedule that will cover 24x7 (twenty-four hours a day, seven days a week.)
Most of these companies are on a 5-day schedule and want to increase their
coverage to seven days a week. This type of change has a broad impact on
an organization, and should not be taken lightly. It should always be carefully
orchestrated to ensure a smooth transition.
Who is going to a
24x7 operation?
There are many reasons for going to a 24x7 operation. The
more compelling the reason, the easier it is to make the decision to do
so. The following is a list of typical reasons for having a continuous 7-day
schedule:
1) Startup and shutdown costs
make closing down the facility on weekends prohibitively expensive. A pretzel
plant was suffering significant losses during its weekly shutdown on Friday
and start-ups on Monday. In addition to product loss, everything had to
be perfectly clean for the weekend as anything left on a machine for a weekend
turned to stone. Nearly 10% of all labor costs were attributable to cleanup
requirements that would not exist if the plant ran seven days a week.
2) The cost of capital equipment is very high.
The semi-conductor business is a good example of this. A machine that would
fit in your living room may cost over 5 million dollars. A semiconductor
company will have a building filled with these types of devices. It is a
simple economic decision to run this equipment for as many hours as possible
each week. This reduces the amount of equipment that must be purchased.
For example, a company could run 5 machines for seven days a week or they
could buy two more machines and then run 7 machines five days a week. The
more expensive the equipment, the more obvious the choice becomes.
3) Companies frequently find that they have
run out of room. The cost of capital equipment becomes less of an issue
when one realizes that even if the equipment were free, there would be no
place to put it. Under this scenario, going to a 7-day operation is only
one of several choices. There are many factors that must be considered:
a. What is the cost of expanding
the current facility?
b. What is the cost of building/purchasing
a new facility?
c. Since growth is a typical reason for expansion,
is the current need for expansion based on a long term forecast or will
orders drop off again in a few months?
d. Is outsourcing an option?
e. How will the workforce respond? In a tight
labor market, this is clearly a major issue.
4) Responsiveness to customers can cause
a company to consider 7-day operations. An order placed on Friday afternoon
may not be filled until Monday with a 5-day schedule. On a 7-day schedule,
that order can be filled while the weekend is still young.
5) Depending upon the fill/draw characteristics
of local warehousing, a 7-day schedule may reduce the average volume carried
on-hand without reducing the buffering effect an inventory creates. Typically,
shipping takes place during the weekdays. To be prepared for Monday shipping,
a 5-day operation will make sure the warehouse is sufficiently stocked
by the end of Friday. This stock is then carried throughout the weekend,
with no return on the investment made to create the stock. A 7-day schedule
can allow stock figures to go low during the week because the weekend
can be used to replenish the warehouse by Monday.
6) Some companies implement 7-day schedules
to be worked in conjunction with 5-day schedules. This can happen for
a number of reasons. One of the most unique examples of this was when
a company realized that in a tight labor market, they needed to offer
more than one type of schedule to attract employees. Some employees prefer
weekends off while others prefer more total days off and the increased
income that many 7-day schedules offer.
There are certainly many other reasons for implementing a
7-day schedule. More often than not, it is a combination of several issues
that eventually result in the decision to become a 24x7 operation.
How will the workforce
react to a 24x7 schedule?
If you were to ask the average person on the street "How would
you like to start working on your weekends?" you should expect a nearly
unanimous "No Way!" But, ask the same person if he or she would like 10%
more pay (more information)
and 78 more days off and you would get a completely different response.
The point here is that the shiftworkers' response will be based on what
they know (or think they know.) Ideally, they are getting a complete picture
of what their options are.
Information is the key to gaining the support of your workforce.
The more the better. To better understand what type of information the employees
need, you must first understand their concerns.
1) Employees may feel that
the company is going to a 7-day schedule more for convenience rather than
for a realistic, compelling, economic need. If the business case for a 7-day
schedule is justifiable, then it should be presented to the workforce in
a manner that has meaning for them.
2) Employees will be concerned about the unknown
components of the 7-day schedule. What will happen to overtime? How will
holidays work? Who will provide coverage for absenteeism? Granted, there
is no way to completely eliminate all of the unknowns short of actually
working the schedule. A lot can be done to clarify those things that are
known. If you know what the anticipated overtime level will be on the new
schedule, tell the workforce. If you have a new holiday policy ready to
go, let people know about it.
3) Many people will focus on only the negative
aspects of a 7-day schedule. Most employees are not aware of the fact that
7-day schedules can offer up to 78 more days off a year than their current
Monday through Friday schedule. The most common 7-day schedules also pay
10% more than Monday through Friday schedules (this is largely due to the
overtime built into the schedule.) Another plus is that a 7-day schedule offers
time off during the week - lines are shorter almost everywhere.
What other issues must be
taken into account prior to implementation?
Implementing a 7-day schedule is easier said than done. Even
with compelling rationale for such an action, the logistics involved in such
a change can be overwhelming. The biggest problem is typically one of bringing
everything together. The following is an example of some of the disparate
issues that need to be resolved:
1) Employees need to be communicated with.
What is going to happen? When is it going to happen? Who is it going to
happen to?
2) The product flow through the facility
may change dramatically. Will stockpiling occur? Whose cost center is
responsible for it? Will the customer (internal/external) be impacted?
What about the suppliers (internal/external)?
3) It is very likely that current employee
policies will not support a 7-day schedule. For example, on a 5-day schedule,
a holiday that falls on a Saturday is typically recognized on a Friday.
On a 7-day schedule, holidays should be recognized on the days that they
actually occur. Disability, vacations, military duty, etc., will all need
to be reviewed for appropriateness. If you have a union, an addendum to
the contract may be required.
4) Staffing levels will be a major factor.
7-day schedules require approximately 33% more employees than 5-day schedules,
depending upon your target for overtime. Creating an even distribution
of skill sets may require breaking up some of the current crews.
5) Supervision generally increases in proportion
to headcount.
6) Maintenance scheduling can no longer
consist of "We'll get it done this weekend when the plant is shut down."
7) Support functions may need to be extended
into the weekends.
a. Quality, maintenance and supervision will
almost certainly require weekend components.
b. Shipping/receiving, food services, payroll
and human resources may also require some weekend representation.
8) Productivity standards will need to be
recalculated. Most plants become more efficient once shutdowns and startups
are eliminated. Adding two additional production days to a week will also
have a major impact (7-day schedules have 40% more hours than 5-day schedules.)
The finish line
There are a lot of potential benefits associated with a 7-day
schedule. The path to get there is filled with hazards and should not be
taken lightly by someone who has not gone there before. Our job is to help
you successfully navigate these waters.
Once you have successfully implemented a 7-day schedule, you
will begin to see the benefits of your efforts. The workforce will eventually
become accustomed to the schedule. Productivity will be up and costs will
be down. Best of all, you need not go through this monumental effort again…if
you did it right the first time. So do it right the first time.
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