Boosting ROI in Shiftwork Scheduling Projects

Understanding the return on investment (ROI) for any project is critical when evaluating whether it is a smart decision. The key to accurate ROI calculation lies in thoroughly assessing costs, risks, and benefits as an interconnected whole—though this process is rarely straightforward.

Take this scenario: a company struggles to meet production goals. One option is to invest in additional equipment and the staff to operate it. Another is to add a new crew and extend the operating hours of current equipment. Comparing these options boils down to identifying which delivers the best ROI.

In this case, buying new equipment incurs significant costs and time delays with high upfront costs. At the same time, it can increase production speed and reduce labor costs. On the other hand, adding an extra crew is faster, requires less capital, and maximizes equipment usage. The more efficiently equipment is used, the higher the return on the investment made in that equipment. Which one is likely to become the ROI winner?

Many companies come to us for help with this strategic decision and to determine the value of making a professionally designed shift change vs. implementing a homegrown solution. We guide companies through this decision-making process and shed light on the full picture of ROI by addressing key questions, such as:

    • What schedule will maximize underutilized equipment hours?
    • How will you communicate schedule changes and their benefits to employees?
    • What staffing levels are needed to balance absenteeism, turnover, and overtime goals?
    • How can employee preferences (e.g., shift patterns or start times) shape the schedule?
    • What overtime levels are optimal for costs and workforce satisfaction?
    • How should work and pay policies evolve to fit new schedules?
    • How will production seasonality or product mix variations be handled?
    • What are the long-term requirements for production output?

Companies that overlook these questions risk costly mistakes and harming ROI. Examples, we saw include businesses:

    • with an ineffective vacation policy in place, leading to $2 million in avoidable annual expenses,
    • with an unbalanced staff distribution, resulting in an 8% overstaffing,
    • with a 30-minute staff overlap at every shift change – instead of the necessary 10 minutes – causing an extra payment of 20 minutes at OT rate for each employee.

In contrast, a well-designed vacation or overtime policy, or an ideal shift change protocol not only prevents financial pitfalls but also contributes to a healthier ROI.

ROI is crucial when it comes to scheduling in manufacturing because the right schedule can significantly impact productivity, costs, and profitability. Here’s how ROI ties into scheduling:

Equipment Utilization: A well-planned schedule maximizes equipment usage, ensuring that machinery operates at optimal levels without unnecessary downtime. The more efficiently equipment is used, the higher the return on the investment made in that equipment.

Labor Costs: Effective scheduling can optimize labor costs by ensuring that workers are scheduled based on demand, reducing overtime, and minimizing idle time. This increases the ROI on labor investment.

Inventory Management: Scheduling impacts how inventory is managed, including raw materials, and finished goods. Proper scheduling reduces excess inventory, storage costs, and waste, leading to better ROI.

Throughput Time: Faster throughput times mean products move through the manufacturing process more quickly, allowing the company to fulfill orders faster and reduce lead times. This improves customer satisfaction and boosts revenue, enhancing ROI.

Energy Efficiency: Scheduling can influence energy consumption. Running machinery during off-peak hours can reduce energy costs, contributing to a better ROI.

Maintenance Planning: Scheduled maintenance minimizes unexpected breakdowns, reducing repair costs and production halts. This ensures a higher ROI by maintaining steady production levels and extending equipment life.

By focusing on these aspects, manufacturers can ensure that their schedules are not just efficient but also profitable, aligning with overall financial goals and driving a higher return on investment. This strategic approach to scheduling can make a significant difference in the competitiveness and profitability of manufacturing operations.

With 30+ years of experience, Shiftwork Solutions ensures these challenges are addressed through careful planning and employee engagement, delivering results that align business needs with workforce satisfaction.

Discover how we can help you build schedules that drive profitability and employee well-being.

Contact us today!

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