Background
Thomas Sanderson is the UK’s leading supplier of
conservatory blinds and patio awnings.
The
company experiences two major peaks in sales
throughout the year.
The first is the ‘natural
demand’ that occurs each summer and the second
is the ‘sale-time demand’ which arises during
the discount season.
An extra 20% of product has
to be manufactured during this period from
November to February.
The annualised hours scheme was introduced in 2004.
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Thomas
Sanderson - Annualised Hours
Dramatic Improvements in Productivity achieved
following implementation of
Annualised Hours
An annualised hours scheme was introduced to 150
employees at Thomas Sanderson's Waterlooville
production facility at the beginning of 2004
Prior to 2004 the
company was employing most of its staff on
fixed-hours contracts, with full-time and
part-time staff on 43-hour and 21-hour weeks,
regardless of demand. This resulted in
significant differences in productivity - with
staff typically being under-occupied during
quieter periods while the company were paying overtime
at premium rates during busy periods.
Nigel Campkin, Executive Director at Thomas
Sanderson says:
“I attended a seminar where we discussed the
concept of annualised hours. After speaking with
the consultants it became clear that the
seasonality we experienced could be managed
better by implementing an annualised hours
scheme."
In accepting an annualised hours scheme,
employees agree a
specific number of working hours per year in
exchange for a fixed salary - paid in equal
instalments over the year regardless of the
hours worked in each period. Staff are
able to choose an annual hours contract which
suits them based on an average of between 20 and
48-hours per week.
The annualised hours scheme enables Thomas Sanderson to control
its labour costs while offering the staff a
fixed monthly income. As Nigel explains:
"We were able to say to the staff – how would
you like to work less hours, earn more money and
have more time off? It wasn’t too tough to sell
– once we convinced everyone we were serious. In conjunction with the
consultants, we estimated our savings and were
able to distribute some of these among the
workforce; a benefit that was really appreciated
by our staff.""
A win-win with annualised hours
The
new annualised hours programme has already
provided real benefits to the staff at Thomas
Sanderson. As
well as the financial benefits, staff have also
seen an improvement in their work-life balance
since the scheme gives them the opportunity to
work fewer hours in certain periods, as it suits them, in line with
the manufacturing programme. Morale and
staff satisfaction levels have improved.
Productivity is now monitored and forecast at
department level throughout the factory rather
than across the company as a whole. This enables
Thomas Sanderson to control productivity levels
and keep its labour costs constant and
predictable. Nigel explains:
"This year we’ve
seen an improvement in productivity of 25% and
our labour costs are lower than they were two
years ago."
By
getting labour costs under control, Thomas
Sanderson has been able to put an end to costly
overtime. There have also been reductions
in staff turnover and improved staff retention.
Alan Bishop, Manufacturing Manager for Thomas
Sanderson says:
"We ’ve managed to match our rosters to the
business needs and cover all our hours, and so
far we haven ’t worked any overtime at all,
which is very good news for the business."
"There’s no way we’d go back to the old system.
The annualised hours scheme enables us to match
our rosters to the sales forecasts every year.
This year has been absolutely superb, we’re
already seeing cost savings just from
controlling our hours."
The consultancy work referred to in this case
study was carried out by Ken Beaumont and Philip Lynch
while Directors of Smart Consulting Ltd trading
as Philip Lynch Consulting in 2003-04.
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please contact us.
©
Workforce Logistics Ltd 2010
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