Expansion vs. doubling shifts

[tulum]

Hey folks,

Does anyone have any experience or know of any articles that discuss the pros and cons of expanding (i.e buying another facility) vs. double worker shifts?

Currently our organization works 40 hour weeks 8 - 4:30 5 days a week with overtime as needed. To keep up with the workload we have been doing alot of overtime... our facility is not big enough to increase personnel... so we either have to add on / buy a second location OR starting working a morning and afternoon shift.

To me it seems clear that the double shifts is the easiest most cost effective solution, however, what extra cost are incurred? I would assume you have to pay premiums for shift work, and what about the workers - how do they respond in general?

Any comments welcomed.

Regards,
TULUM

 

[gerhardl]

This is a 'standard' and very often coming up 'case-study' with a lot of pros and cons, and a very rich flora of business administration descision tools available, game theory and others.

Classical 'game -theory' case, you could try searching for similar cases here.

The clue, in my opinion, is however, as you states, the response in the working market (availability and price of working force at your factorys location). (You have to give your country /state of location to get local advice)

If working force highpriced, difficult to recruit and this trend stable or increasing: perhaps better to expand factory, machinery and automation.

If opposit: increasing in manpower and more unfavourable working hours perhaps a better choice for the nearer future.

 

[greenone]

Please consider the human aspects of forced overtime. While employees often like the added pay, they at the same time complain they have no home life. Also, I have seen the injury rate increase in manufacturing facilities where there is continuous overtime. Safety often takes a back seat due to perceived production stresses. eventually, what the company saved on new employees, they paid out in injury claims.

 

[gerhardl]

to greenone and tulum:


... and social reactions is of course one of the most important factors to put into your 'theoretical' game theory chart, trying to maximize your gain.

From my point of view (Scandinavian) I would go for the best long-term solution, giving both attention to investing in mechanical production tools, automation, total quality control, and not at least a satisfying work situation for the emplyees (better than normal or best possible working hours / terms).

This longterm survival strategy, I believe, is the long term winner, even if it means less income on shorter term.....

 

[Ashereng]

greenone,

I read the OP that he is starting a second shift, NOT, going to overtime.

tulum,

Going to a second shift is more economical - you are taking advantage of existing capital equipment. Yes, finding people who like doing shift work is tough - but hey, lots of people do it. Some may even prefer it as it gives them time with their family, run errands, etc. For example, in textiles, they run 24/7 with 3 8 hour shifts. In oil and gas, often they run 2 12 hour shifts.

If you expand capital wise, it is a much bigger risk. Perhaps, you can run a second shift, see how it works, before investing in new capital.

"Do not worry about your problems with mathematics, I assure you mine are far greater."
Albert Einstein
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[DonPhillips]

The only cons I can think of adding a second shift is finding second shift workers versus first shift, providing incentives to keep them on second shift, the transition between shifts requires good communication and controls, and the lack of daylight that may effect some activities and certainly affect utility costs.

Don Phillips

http://worthingtonengineering.com

 

[GregLocock]

If you can time your shifts around family life you may well find a source of ready applicants (ie cheap labour). For example 6 hour shifts in the middle of the day are very popular with those whose children are at school.

Is there any reason why your shifts should run back to back?



Cheers

Greg Locock

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[opsops3]

the typical way I saw in many american businesses is :

keep as many staff on the cheapest rate possible and use overtime.

cheap staff is easy to downsize or recruit ( flexible workforce)

investing in capital requires long term commitments that reduces flexibility

the new paradigm is flexibility flexibility

 

[GregLocock]

and that is bad because....?

Cheers

Greg Locock

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[tulum]

Thanks guys,

I am just compiling thoughts right now...

We have some areas that are bottlenecks right now, and the only real answer I think is two shifts... not quite sure of the end logistics...

From what I can see most of the young guys like overtime, and even if you are paying time and 1/2 they seem to get condisderably more done working overtime becuase there isn't anybody around to pull their attention away to other jobs etc...

Regards,
TULUM