Let me tell you a story about a company I worked for. This story never stops fascinating me, because it shows how a simple “hack” in a complex system of processes within an organization can save millions, before you even start solving the problem.
What the hell do they do?
It happened in a local manufacturing site of a global company. Their products are quite labor intensive, so they hired me and the team to help them use their human resources in a smarter way, using lean manufacturing. One of the problems that they complained about was huge amount of overtime hours of hourly-paid workers that cost them millions.
The workers come in their free time and on weekends to do extra work – special maintenance, cleanups, installation of new equipment and other things. It is coordinated and signed off by their supervisors.
“I only have a vague idea what they do. I am not a production guy,” the client’s HR director told me. “I just know that we have double the overtime hours than our other sites.”
They were suspicious that the overtime hours is often not necessary, but pushed by the workers as a source of extra cash.
It is hard to give advice before knowing the current situation, so I suggested this: Every time a worker comes for overtime hours, his supervisor needs to track the time spend and the reason why he was there working. And this will be reported to management.
The surprising end
I came back to the HR director after a month to check the data and start fixing the problem. I could not believe what he told me:
“In last month, overtime hours dropped by half. We are fine now.” he told me. Apparently, tracking the reasons for overtime and presenting them to management discouraged the people from abusing them. That simple thing saved them millions.
Ok, what’s in for me?
This solution I proposed would probably not work long term, but it helped me learn an interesting point: Ambiguity, missing data, oral agreements, and vague processes – these aspects create dark corners in your operations where shady things happen.
Process visualization and collection of data helps you see what happens and where the problems are. And it often discourages them from even happening. Do not let it happen to your company, turn on the light too.