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Don’t Forget! You Saw it in the
Adverti$$er
August 2021 #13265 Page #32
Reliable and Profitable Incentive Programs, Scheduling, and Pricing uppose you want an effective incentive program that improves productivity, saves your company labor cost, and rewards your Todd Drummond most valued production crews with additional wages. Perhaps you also want to improve the accuracy of your production scheduling that allows for a proper understanding of manpower and a more reliable completion date. Those two things by themselves would make most leaders feel good. But the one thing that’s even better is a greater profit-making method. Better than the standard cost markup method, you want a profit-making method that adds real dollars every week to the bottom line, and does it regardless of the project complexity, size of the material, or material cost. Great news – that’s possible and is built on a foundation of accurate definable time units of man-minutes based on proven time and motion industrial engineering practices.
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Flawed Units Measure Example #1 – Board Foot as an example: I have heard the same thing many times over and over. People want a better method of understanding truss manufacturing labor efficiencies, but they use the same flawed measurement units. “Todd, I’ve been in this industry for decades, and we have always used board foot per man-hour.” My reply: “So how does that work out for a low-board-foot project (hip roof) with many setups compared to a high-board-foot (AG trusses), low-setup project?” The response is never enlightening because BF/Man-Hour simply does not work consistently for every project. Flawed Units Measure Example #2 – Cutting lumber as an example: A somewhat newer trend is to use piece count, but this works only for run or assembly time with no setup time estimations. They try to get around the setup time by applying an “average” setup time to each piece. Using an average setup time for every piece will skew the labor too high or low depending on the piece count. Piece Count Example: Setup saw time = 1 man-minute for a crew of 2 Cut rate time per 2x4x8 piece = 0.17 minute for a crew of 2 Quantity 2 = (1 setup minute) + (0.17 * 2) = 1.34 minutes total = 0.67 each Quantity 20 = (1 setup minute) + (0.17 * 20) = 4.4 minutes total = 0.22 each A difference of 3 times! (0.22 * 3.05 = 0.67)
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