2020

EXPERT ANSWERS

This month’s question

My organization has been struggling to define the right headcount and staffing at our U.S. plants. Are there any guidelines about the staffing (headcount) structure for a tier-one automotive original equipment manufacturing company with about 15,000 employees?

Our response

There are many approaches to right-sizing an operations or production team. In the case of your manufacturing company, you can attempt to narrow the field of available options by determining the organization’s true goals.

Walking through the initial define phase of the define, measure, analyze, improve and control process, interview various department or business unit leaders, who will clarify your goals. The assumption is that representatives from facilities management, finance, R&D, production forecasting and HR (among potential others) all play integral roles in this initial discovery process.

After interviewing all the required stakeholders to understand their specific expectations for the right amount of production, socialize and package their feedback into a distilled problem or opportunity statement.1 By taking this first, all-important step, you eliminate the waste of starting out on a well-intentioned mission with poorly defined expectations and end results. To start down the right path, you must charter the mission and plot the course.

Analyzing historical trends of order and production data will help you understand the nature of your business cycle. This may be unique to your company, or may mirror the larger automotive parts market in general. If you can determine when you may need more resources working on a particular production line, it will help you determine where and when to assign those resources for maximum productivity.

Another plan to consider is cross-training the production teams to focus on demand in one of many specific areas. This will help reduce waste by minimizing or eliminating downtime, pulling value through the continuing production of any widget (or car part) that can be shipped to market. An example from my personal experience is cross-training data-entry pharmacy technicians to work on insurance resolution in a different department during certain months of the year. This guaranteed their full-time employment—rather than temporary or contract employment, which can be messy—and maximized throughput while meeting or exceeding customer expectations.

Doing a deep dive into the data surrounding your current workforce—specifically, the people doing the work—also can help immensely. This analysis should consider several different characteristics, such as age, which can help you form a communication plan for approaching shifts in upcoming business expectations. An excerpt from one study, for example, focuses on determining the most effective strategy to communicate production-line changes to millennials versus older generations.2 One part of the plan might communicate shifts via social media or text message, which millennials would appreciate, versus a one-on-one or small group discussion preferred by older team members.

One word of advice here: Don’t take those details for granted. Team members—especially those performing repetitive, potentially monotonous work—may appreciate the customized approach management can take when communicating with them. Higher job satisfaction can lead to greater productivity, retention and profits.

Another key component to the headcount analysis should be a performance dashboard readout. This likely is a piece the company soliciting answers already knows, but advice without this part is not worth taking. There are some key questions a performance dashboard must answer to be effective:

  • What are the key benchmarks for performance on the production floor? What does success look like on an hourly, shift-focused or daily basis?
  • In what ways, and how often, is this reiterated to staff?
  • What are the key performance indicators management wants to track?
  • What are the visible areas of performance that can be optimized?

After the ideal state of production is identified and real goals are determined for optimization, the process of right-sizing can continue. The strategic implications of knowing the goal and having leadership from each responsible department on the same page regarding that goal are critical.

Tools in the toolkit

As a source of further aid to getting the headcount right, the company may decide to enlist a third-party consultant or software tool to help. Depending on leadership’s true goals, it may be worth the investment and training in an enterprise resource planning (ERP) software, such as WorkWise ERP or Made2Manage ERP. These types of programs can do a lot of the heavy lifting for management, as long as cost controls and corporate culture are relatively static.

Keep in mind, these are just some of the guidelines companies can deploy to get their numbers where they need to be. As long as a tool or method can work, it might—or might not—work for you, and there are plenty of other options out there.


References

  1. T.M. Kubiak, The Certified Six Sigma Master Black Belt Handbook, Quality Press, 2012, pp. 82-87.
  2. Alexey Sukhanov, Irina Demicheva, Rafail Miftakhov and Irina Samokhvalova, “Headcount Modeling: Optimization Tool,” Deloitte, 2018, pp. 1-19, https://tinyurl.com/headcount-modeling.

This response was written by Trevor Jordan, senior program manager, AdventHealth, Altamonte Springs, FL.


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