Investing in your shop to save your investment in your people

Last week, we talked about measuring the output of your people and protecting the investment that you make in them. In manufacturing, you may have expensive equipment that drives a lot of cost, but your people are right up there in terms of cash outlay. More importantly, however, your people make your product. Without them, you don’t have anything to sell.

We discussed the labor efficiency ratio (LER) and how it helps you know how your people are performing. The concept of LER was created by Greg Crabtree and the most important part of the concept is it compares you against you over time. Only you know how fast and far you can go. The LER helps you measure your people over time.

Let’s say that you have come to the realization that you need a software tool to help you manage your shop and your staff. Paper is no longer working for you and perhaps you’re even drowning in Microsoft Excel sheets and their calculations. That’s fair. I’m not sure I’d know how to run a company using Excel.

Perhaps you’ve made a list of things you need the system to help you with or solve. Are there key issues in your shop that you just can’t wait to get rid of? (If you need help making this list, see our blogs on requirements.) These are the things you should focus on when selecting a tool. Share your problems with the software vendors you’re looking at and see how they would suggest solving them. A good vendor should be able to help you identify the cause and educate you on how their tool helps you solve that issue.

requirements for labor

We started this conversation around underutilized labor. You have the people. You pay the people. Whether you have the work for them to do or not, you pay them. So how do you know that they are well utilized? Without a system, it’s hard to tell. This is not about scheduling people for 40 hours a week. This is about utilizing the talent that you have in the best ways possible.

Last week, we talked about your supervisors and your higher-paid staff. The ones that you can and should leverage to get your most important work done. These are the people that you want to be most effective for you. And the only way to do that is to make sure that your people know what to do and when to do it. How do you know that? Let’s dive in.