Human Resources – Year 2 TQM – Year 4

1. Human Resources – Year 2TQM – Year 4

2. Human Resources

3. Production Staffing

4. Human Resources Module • Complement • The number of workers required to fill the production schedule without Overtime. • Caliber • Talent of the workforce; recruiting a higher caliber of worker, results in higher Productivity and lower Turnover. • Up to an additional $5,000 per worker can be spent. • If nothing extra is spent, the recruitment cost per worker remains at $1,000 and they get an average person off the street. • The more spent, the higher the caliber of the worker. • Training • Training leads to higher Productivity and lower Turnover, but takes people off the job while they are in the classroom. Each training hour costs $20 per worker.

5. Recruiting & Separation Costs • Recruiting costs • incurred when new workers are hired. Recruiting costs average $1,000 per worker. • Decreasing Production • schedules, whether it is because capacity has been sold, or production curtailed to sell excess inventory, will result in lay-offs. • Separation Costs • are generated when workers are laid-off. Separation costs average $5,000 per worker.

6. Recruitment • $2,000 has been entered in Recruiting Spend, the amount of money spent — per worker — to attract a higher caliber worker. Note: In this example the Productivity Index remains at 100%. As the rounds progress, Recruiting Spend and Training Hours expenditures will increase the Productivity Index.

7. Training • 20 Training Hours per worker per year have been added. Training Hours pull workers off the assembly line, therefore the Needed Complement rises to 301. • The Turnover Rate drops to 9.2% — workers are happier because of the training. • Training will cost $120,000.

8. 2nd Shift and Overtime • Your plant has one production line for each product. • Each line contains workstations, and a worker staffs each station. • Each line has a capacity, which is defined as the number of units that can be produced per year with a single shift. • The plant can work into the night by adding workers to a 2nd shift. • 2nd shift labor costs are 50% more than 1st shift labor costs. If you schedule a production run in excess of your 1st shift capacity, a 2nd shift or overtime will be required. • Increasing capacity will reduce the number of workers on the 2nd Shift, and therefore decrease labor costs. • Increasing capacity will not decrease the overall Needed Complement, it will simply move 2nd Shift workers to the 1st Shift.

9. 2nd Shift and Overtime • Production schedule set to 1550. • The Staffing area reflects the information that has been entered on the Production schedule. • The Needed Complement is now 298, but the Complement has held steady at 248. • Overtime has jumped to 32.6%. • The Turnover Rate has gone to 13.3% — workers are leaving because they are disgruntled about the Overtime.

10. Total Quality Management

11. Yearly investments of < $250,000 will create little improvement • Yearly investments above $1,000,000 push well into diminishing returns • Investing more than $2,500,000 in the same initiative over 2- 3 year period creates little or no additional improvement

13. Process Management Initiatives • These initiatives improve business procedures, resulting in improved efficiencies and cost structures • CPI (Continuous Process Improvement) Systems -Reduces Material cost and to a lesser degree Labor costs • Vendor/JIT (Just in Time [Inventory]) - Reduces Material costs and Administrative overhead • QIT (Quality Initiative Training) - Reduces Labor costs • Channel Support Systems Increases the effectiveness of the Sales Budget, and therefore demand • Concurrent Engineering - Reduces R&D cycle time, the time needed to move products on the Perceptual Map and to change MTBF specifications.

14. Continuous Process Improvement • A processis a series of progressive and interdependent steps by which an end is attained. • Continuous Process Improvement (CPI) is a strategic approach for developing a culture of continuous improvement in the areas of: • reliability • process cycle times • costs in terms of less total resource consumption • quality, and productivity. • Deployed effectively, it increases quality and productivity, while reducing waste and cycle time.

15. Just in Time Inventory • Just-in-Time inventory system is designed to ensure that materials or supplies arrive at a facility just when they are needed so that storage and holding costs are minimized. • The Just-in-Time system requires considerable cooperation between the supplier and the customer. • The customer must specify what will be needed, when, and in what amounts. • The supplier must be sure that the right supplies arrive at the agreed-on time and location.

16. Quality Initiative Training • Leaders of quality initiatives (project managers, managers, and senior leaders) develop useful and relevant knowledge and skills to ensure that company resources and efforts are utilized in the most effective manner. • Leaders gain useful and skill based learning in these core quality leadership areas: • Leading Teams Through Quality Initiatives • Quality Philosophies and Approaches and Lessons Learned at Other Firms • Customer Needs and Expectations • Quality Improvement Management Systems • Ethical Decision Making

17. Channel Support Systems • Support system to facilitate information sharing that increases productivity and profitability, untangling the web that once blocked the transfer of information. • Predictive modeling. Determine how to market the right product to the right person at the right price and the right time. • Customer, product and business line profitability. Identify the customer, product, organization and business line profitability bottom line. • Product development and creation. Determine what products will sell; define the distinctive product characteristics and pricing. • Target marketing. Sell the right product to the right person at the right time at the appropriate return. • Sales execution and tracking. Collect information pertaining to who sells what product to whom, when and where.

18. Concurrent Engineering • Concurrent engineering is a business strategy • replaces the traditional product development process with one in which tasks are done in parallel • there is an early consideration for every aspect of a product's development process. • Concurrent engineering provides a collaborative, co-operative, collective and simultaneous engineering working environment. • The concurrent engineering approach is based on five key elements: • a process • a multidisciplinary team • an integrated design model • a facility • a software infrastructure

19. TQM Initiatives • These initiatives improve product quality while reducing the time and resources required to design, manufacture, warehouse and ship products. • Benchmarking - Reduces Administrative overhead • Quality Function Deployment Effort - Reduces R&D cycle time and enhances the effectiveness of the Promo and Sales Budgets • CCE (Concurrent Engineering)/6 Sigma Training - Reduces Material costs and Labor costs. • GEMI TQEM Sustainability Initiatives - Reduces Material costs and Labor costs.

20. Benchmarking • A process in which organizations evaluate various aspects of their processes in relation to best practice, usually within their own sector. • This allows organizations to develop plans on how to adopt such best practice, usually with the aim of increasing some aspect of performance. • Benchmarking may be a one-off event, but is often treated as a continuous process in which organizations continually seek to challenge their practices.

21. Benchmarking Procedure • Identify your problem areas • Identify other industries that have similar • Identify organizations that are leaders in these areas • Survey companies for measures and • Visit the "best practice" companies to identify leading edge practices • Implement new and improved business practices

22. Quality Function Deployment Effort • Flexible and comprehensive group decision making technique used in product or service development, brand marketing, and product management. • QFD transforms customer needs into engineering characteristics of a product or service, prioritizing each product/service characteristic while simultaneously setting development targets for product or service development. • QFD can strongly help an organization focus on the critical characteristics of a new or existing product or service from the separate viewpoints of the customer market segments, company, or technology-development needs.

23. Six Sigma Training • Six Sigma is a management technique that aims to develop and deliver near perfect products and services. • "Six Sigma" refers to statistical constructs that measure how far a given process deviates from perfection. • Processes are designed from the perspective of the customer and are enabled by a commitment to thinking in terms of processes across the organization. • Metrics such as performance, reliability, price, on-time delivery, service and accuracy provide the targets.