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Component Manufacturing dverti$ dverti $ er
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May 2022 #14274 Page #35
Detailed Process for Implementing an Effective Labor Incentive Program ne of my clients’ most often asked questions is, “How exactly do we track and implement an incentive program?” Most companies Todd Drummond are willing to pay their manufacturing employees more wages (incentives) based on greater output. Yet, the vast majority of wood truss component manufacturers (CM) fail to understand how to do that properly and effectively.
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If you’re looking for a proven method for increasing output and rewarding employees for their efforts, then look no further. This is my approach for effectively using the TDC truss labor time standards generated by the roof/floor truss programs so that you can have a successful incentive program. Once the TDC time standards are inputted into your roof/floor truss program, there should be three defined labor groups: 1. Fab – Table Assembly Labor for Fabrication 2. Saw – Cutting Labor 3. Other or Support – Not Table or Saw Labor
Only the Fab and Saw labor groups are used for proper time estimation. The Other/Support group is simply a multiplier of Fab and Saw to account for the labor cost of the support personnel, not a time estimation.
Tracked Time versus Estimated Time Efficiency Estimated Time Divided by Actual Time = Efficiency Example: Estimated 1 Hour ÷ Actual 2 Hours = 50% Efficiency
Tracking Shop Employee’s Time Rules Do Not Include x
Break times
x
Any time not related to the task, such as support activities of plate picking, lumber sorting, or lumber picking.
x
Any time that is not actually at or on the tables or saws.
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