Labor Profit management Flashcards
Why is controlling labor costs so important?
- Increase labor cuts into profits
* Next to material cost labor is the largest production cost
When is the correct time to use overtime?
- Only permitted if it will negatively impact the customer or business
- Maintenance needing to be done on off hours.
What are the reasons that overtime should only be used as a last resort?
- Partners can get used to it and start to rely on it
- Causes fatigue
- Is expensive
Why is overtime particularly troublesome in our industry?
- It is a sign of poor managements
* Our business is predictable and we should be able to see ahead and know what we will need to get the work done on time
When is the correct time to use to use temporary labor from a staffing agency?
- Never
* Traditional hiring practices are not generating fast enough or no good quality candidates.
What are the reasons that staffing agencies should only be used as a last resort?
- If we are not able to support the business
- We want to hire long term partners that fit with our culture
- Staffing agency gets a premium
- Usually don’t find good long term partners
- Causes lower partner engagement with current partners
What is the benchmark for total production labor as a percent to sale?
- 11.25- Auto sort
* 12.25- manual sort (World class) our location goal is 15% or less
Where can the 20 keys of material cost be accessed?
- 20 keys link
* SharePoint
Describe the role of pull percentage in material cost
• The more garments we pull from our stockroom the lower our material cost will be.
What are some factors that can increase a location’s pull percentage?
- Being on schedule with OOS
- Stockroom organized efficiently
- Garments filed correctly
- Following the standard product line
- S-grade requests
- Low scrap rate
Statistically speaking what is the number one cause of CONTROLABLE garment requests?
- Size changes
* Re-orders (data entry errors ex. Color /trim)
What are the five components of an effective reliability program?
- Proper staffing
- Well executed PM program
- Good work order system (Emaint)
- Effective execution of repairs and long term projects
- Communication between PM & maintenance
What are some consequences to delaying a repair on a piece of equipment?
- Breakdown of equipment
- Excessive wear and tear
- Unsafe environment
- Increase in expenses
- Decrease in partner engagement
What are some conditions that cause our equipment to break down prematurely or unexpectedly?
- PM’s not being completed
- Delaying repairs
- Dust or lint build up in the baring or electrical components
- Water in contact with uncovered electrical components
How can an effective PM program prevent these conditions?
- Can spot issues before major breakdowns
* Cleaning and inspecting equipment on regular basis
