OK, so you’ve automated your factories and leaned out your supply chains. You’ve squeezed out every ounce of inefficiency. You’ve got your machines, your processes and your materials under control, and now the gains are getting harder to come by.

With the low-hanging fruit off the vine, maybe it’s time to take a closer look at more efficiently managing your labor force. It’s one area that many manufacturing companies have neglected, says Christa Degnan Manning, a research director at AMR Research Inc., in
Boston.

Double digits

But that is beginning to change. A variety of enterprise software vendors are taking aim at the space. And Degnan Manning says that HCM today is the single, fastest-growing enterprise application, with buying by manufacturers leading the surge.

One company that is starting to cash in on HCM technology is Elliott Co., a Jeanette, Pa., manufacturer of large turbines and compressors that is a subsidiary of Japan-based Ebara Corp. Elliott previously tracked time and attendance of its 250 hourly employees using manual spreadsheets, says John Russo, senior business systems analyst in Elliott’s information technology (IT) department. But when the company installed an Oracle enterprise resource planning system in 2004, it also installed workforce management software supplied by Kronos Inc., of
Chelmsford, Mass.

With the Kronos system, Elliott employees use any of about 30 personal computer (PC)-based platforms on the company’s factory floor to clock in when they start a job, and to clock out when they finish the job or end their work day. Employees either enter the data on the PC keyboard or scan their bar-coded employee badges along with bar-coded job work numbers, says Russo.

The time and attendance module within the Kronos system enables Elliott to track attendance and manage vacation and overtime pay based on union work rules. Russo estimates that the system saves 15 to 30 minutes per day for each of about 15 foremen at the company, who previously had to manually enter the data for each employee. The system has also improved record-keeping accuracy, he adds.

Beyond that, however, Russo notes that the activities module within the Kronos system is providing valuable workforce-related intelligence. “We have a lot of metrics that we get out of the system that actually help us manage our work effort,” he says. “Efficiency, productivity and utilization are three common measurements that we watch.”

Russo explains that each job within the company has assigned standards that include the amount of time required for completion. The Kronos system enables precise tracking of these hours vs. the hours that Kronos workers actually take to do the job. “If one of our industrial engineers estimated that a job would take, say, 15 hours, and the worker charges 16 hours to that job, then we know we’re an hour over,” Russo says.

When combined with an analytics package and some PC graphics dashboards developed by Russo that allow managers to drill down into the data, the Kronos system provides visibility into areas where the workforce is underperforming vs. the standards. When this happens, “since our standards are what our costs are based on, and what we try to sell against, then we know we’ve got some adjustments to make,” says Russo. “Either we have to find ways to get our employees more productive, or we have to raise our standards, and unfortunately, raise costs, which is not acceptable, because it’s pretty much a buyer’s market in our business.”

Russo notes that some foremen “really aren’t all that keen” on the system, which can reveal inefficiencies within their areas. “Not everybody likes ...