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Component Manufacturing dverti$er
Don’t Forget! You Saw it in the
May 2019 #11238 Page #41
Adverti$er
An Effective Productivity Incentive Program for Truss Manufacturing
Todd Drummond
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t is possible to give your shop employees a raise and actually achieve more capacity through greater productivity and make more net profit for your company by implementing an effective productivity incentive program. However, most of the incentive programs (IP) that are touted in the component industry fail to achieve the desired results. It’s important to emphasize the word “effective.” An IP is not effective if it does not actually increase productivity and lower costs consistently. According to industrial engineering consultants Mitch Fein and Fred Myers, most companies experience a more than 42% gain in productivity by properly measuring productivity, setting realistic goals, taking corrective action in response to unacceptable practices, and rewarding individuals. Three things are happening at once: The company’s costs are lowered, its total volume is increased, and the employees are rewarded for exceeding the average productivity level. Every company administrator should desire this mutually beneficial situation because it reduces the cost of labor and helps increase sales due to higher productivity. In addition to profit gains, effective productivity IP have numerous benefits: • Greater productivity output, which means greater capacity, which means more sales per day. • More satisfied long-term employees, which means less employee turnover, which in turn means fewer mistakes by unskilled workers. • Better utilization of existing assets will reduce pressure to invest in more equipment to meet current demands.
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