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Executive
Summary from the Management Today report “Achieving Total Capacity Flexibility, New Employment Strategies for Manufacturing Businesses”
by
Professor Colin New , Dr Malcolm Wheatley and Dr Marek Szwejczewski of Cranfield
Business School.
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Major
changes in the business environment are forcing all businesses to respond
faster to market requirements. Out-of-date working practices on the factory
floor often mean labour resources are not available when they are needed, or
that they have to be paid for at very expensive overtime rates in order to
meet deadlines.
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Intrinsic
to remaining competitive in these conditions is
understanding demand
patterns. This is not a new problem, but it has become super-critical, as
economies have moved steadily from being supply-driven to demand-led. Not
only do demand levels now change very fast, but demand switches very rapidly
from product to product. It is important to understand whether your business
essentially operates in conditions of demand uncertainty or demand
variability, or a mixture of both.
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Traditionally,
unexpected changes in demand have been solved through offering overtime to
existing employees, or taking on temporary help. Whilst these solutions are
still valid in certain circumstances, they can create as many problems as
they solve; they are not long-term strategic responses to the changed
business conditions.
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Annualised
hours are an increasingly popular employment strategy for many types of
business. Used correctly, they can deliver considerable flexibility at
sometimes little extra cost to the employer. They can also offer
considerable benefits to employees, in terms of better working conditions,
more quality leisure time and improved pay deals. However, they are not
appropriate in all business circumstances, particularly those of high demand
uncertainty.
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Part-time
working is another neglected employment resource which is particularly
appropriate to achieving flexible working. Not only are part-timers
sometimes more efficient than full-time employees, but they are likely to be
able to boost capacity by a greater amount, and cost less. However,
employers should be wary of abusing their position: there is an increasing
amount of legislation governing part-time working, which is likely to erode
any direct cost differentials.
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In
practice, most companies use a range of flexible employment options to
achieve their aims, but calculating the pros and cons of each solution set
is extremely complex. The difficulties of predicting actual demand, even
when you are very familiar with the variables affecting your market place,
is extremely difficult. It is essential to use a model, and a monitoring
system that allows rapid adjustments to be made throughout a budget period.
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Negotiating
the new deals and drawing up new employment contracts is a lengthy process,
and professional advice is essential. Once in place, the new ways of working
have to be monitored carefully, for both internal control purposes and
external regulatory compliance reasons. Most companies invest in software to
help them manage the new system.
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Adopting
new employment strategies such as those described in this report can
represent a considerable culture challenge for a business, which should not
be underestimated. However, few companies will be able to avoid the
necessity - flexible working practices will be essential for survival in the
increasingly complex, faster-paced, networked environment of the 2lst
century. |
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Workforce Logistics Ltd 2010
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