How Managed Labor Increases Plant Output by 25%July 15, 2019
How much higher plant output would you achieve if you didn’t have labor shortages?
More specifically, how much higher plant output would you achieve if you didn’t have a revolving door of temps? Aren’t temps and the “temp-to-hire” model supposed to end labor shortages? Why aren’t they?
And what if these new workers were highly skilled and proactive in finding efficiency gains and cost savings?
A New Manufacturing Labor Model
Managed labor staffing has emerged as a compelling alternative to temp staffing in large manufacturing plants.
Instead of busing temps to your door, managed service providers are responsible for recruiting, screening, hiring, training, and managing the workers they provide, who are their employees. Managed labor employees are typically 25% more productive than temps – even when these employees previously worked as temps in the same facility.
And though hourly rates are higher than temps, managed staffing typically reduces outsourced labor costs by 30%.
Temp agencies crow about achieving “fill rates” of 93-98%, and “fill time” but what good is that when you’re not getting the right number of workers, your plant KPIs aren’t improving and your resources are tied up in training their people? The highest quality managed labor providers will align their KPIs to yours.
Managed Labor Employees Find You Even More Savings
From our experience, dating back to 1973, we’ve found that it’s common for our managed labor employees to find $10,000 to $100,000 in savings. We have also witnessed several cases in which $500k to $1 million+ were found.
Here are a few examples we have seen of savings discovered by managed labor employees:
- $4 million per year in savings from consolidating products from five offsite warehouses into four
- Waste reclaim was increased 50% for a paper mill
- Weekend shifts were eliminated for a manufacturer by negotiating more weekday deliveries from their trucking company
- Tens of thousands of dollars in annual savings achieved by retooling a product loading process to eliminate damage