Enabling operational excellence by improving employment cost and workforce flexibility
An increased global order book for an advanced engineering business required significant growth in manufacturing capacity. A more strategic approach was being adopted to decisions about what would be made in-house and what would be procured from the external supply chain. The manufacturing footprint needed to better reflect the global customer-base, and take advantage of low cost sourcing. A common standard for measuring operational capability, and a consistent approach to benchmarking across all facilities was developed to help assess competitiveness, inform improvement plans, and make sourcing decisions. A common methodology for measuring employment cost and workforce flexibility was established.
A standard ‘blueprint’ was developed for operational facilities, derived from Industry best practice. It covered areas such as working hours and shift arrangements, resource flexibility, team-work, and supervisory capability, as well as a consistent methodology for measuring employment cost. Around 70 facilities around the world participated in a review.
The blueprint analysis was used to drive best practice, develop operational improvement plans and inform sourcing decisions. Over £250m npv savings were embedded into operational plans as a result of the review. It provided a best-practice template for green field facilities around the world, and provided the basis for significant improvement in established facilities. The data enabled more constructive dialogue with employee representatives, since it illustrated clearly the business case for change and what was required to be globally competitive.
We have successfully tailored and deployed this review process in other businesses and sectors to identify opportunities to improve people practices and operational performance.