No manufacturer’s workforce is static. Those who understand the variable nature of their workers, and manage that variability, gain competitive advantage, says John Frehse, Partner and Owner at workforce management consulting firm Core Practice Partners. Reducing workforce variability is not only a key to increasing quality and reducing costs in drug facilities, Frehse says, but also to improving worker morale. Automating and applying metrics to workers and their performance is a first step. Pharmaceutical Manufacturing spoke with Frehse to learn more.
PhM: When you speak of reducing "variability" in the workforce, what are you really talking about?
J.F.: There are two types of variability that we are concerned about. The first is created by the shape of the demand curve for the products and services offered by the company. As demand changes, the need for variable levels of staffing are also needed. Without the right labor strategies, this variability can be costly as overtime and idle time become larger when management teams can’t adapt labor effectively to these adjustments.
The second form of variability is much more dangerous. Quality can be compromised when employees are asked to be flexible with their work hours. The variability in an employee’s alertness, rest level, and consistency have become major realities in the life sciences sector. Removing human error and providing an environment that fosters focus must be given more attention. This means deploying the right labor strategies with heavy respect for the physiological effects of shift work and also deploying the right workforce management software to monitor results.
PhM: What are the keys to reducing variability in the pharma manufacturing workforce?
J.F.: We cannot reduce the variability associated with launching new products, demand spikes, and seasonal requirements, so we have to focus on the areas we can control. Consistent quality should be the focus. To accomplish this, employers need to take a fresh look at labor practices. Employee morale plays a large role and every workforce is different. Survey your employees to understand what they like and do not like about the current operation. Find out what motivates them. You will be surprised that often the answer has little to do with money. Then design a scheduling system with labor strategies that not only work for their lives, but also have health and safety factors built in to maximize alertness levels and reduce variability.
PhM: When you look at the workforces of drug manufacturers, what glaring weaknesses jump out at you?
J.F.: Drug manufacturers have long believed that the answer lies in the length of the shift. This simply is not true. If they have 8-hour shifts, companies may adjust to 12-hour shifts thinking that it will solve morale problems. They may be successful, but they may also increase payroll costs in the process. Due to federal labor laws, employers may increase payroll costs by over 2% in this transition because overtime occurs in some weeks and working less than 40 hours occurs in other weeks. We call it the “44th Hour Problem” and it is rampant.
Other work and pay policy adjustments (or lack of adjustments) can lead to millions of dollars in additional costs. We do not, however, think that overtime is a bad thing. Healthy levels of overtime should be used where needed. Although we do not advocate spending money for no value (the 44th Hour), we do advocate using overtime as an effective tool to manage spikes in demand.
PhM: Where are drug manufacturers in terms of automating their workforce oversight, and what's holding back the laggards?
J.F.: Drug manufacturers are excellent at measuring and monitoring everything—except the workforce. Although software and other forms of technology have been heavily implemented to improve quality, consistency, and the supply chain, many management teams are still using Excel, pencil and paper to manage shift workers. It just does not make sense. Few can identify labor best practices, top performers, and detailed labor inefficiencies and are left managing to the status quo. The laggards are too comfortable with current practices and will not change unless they are hit with a catastrophic event. Of course at that point, it is too late.
PhM: What does real-time management of a workforce mean? What key factors are being monitored and manipulated?
J.F.: Real-time management of the workforce means that management teams can look at effectiveness throughout the day and not just a week later when reports have been tabulated. It allows management teams to look at key performance and productivity measures and understand success while also making immediate course corrections as employees deviate from best practices. In summary, it is a way to maintain the highest levels of labor quality all the time. The basic views typically surround productivity (how many, how fast, for how much effort). As advances in data integration have improved performance analytics have thrived. The question of “how many” and “how fast” have been augmented, but not replaced, by “how well.” This is the key to managing quality and not just cost. Units produced per hour can now be units with zero defects produced per hour. Microbial counts can be integrated as well where applicable. The move to quality-based analytics (and not just quantity) have driven lower-cost, higher-quality solutions for both businesses and consumers.