Why do shops use multiple shifts?
It’s all about the economics. The thing to keep an eye on that drives these economics is plant and equipment utilization.
Let’s say you’re running a shop every day of every week, and you run it with 3 shifts so things are going 24 hours a day. Phew!
That’s a lot of activity, but it pays off because you’re keeping your plant and equipment productive for 7 days x 24 hours for a whopping 168 hours a week.
Now let’s drop back and say you’re only open 5 days a week and one 8 hour shift. Now you’re down to 40 hours a week of plant and equipment utilization. That’s less than 1/4 as much. You plant and equipment are sitting idle 76% of the time, not making you any money.
Adding one more shift will just about halve this waste. Now you can see why shop owners often want to run more than one shift.
Here’s another way to look at it. Suppose you are doing well and your orders just doubled. You’ve got two scenarios for how to double your shop’s production:
Scenario #1: Hire More People and Buy More Machines
In our first scenario, we will continue to run one shift. To double our capacity we’re going to hire more people and buy more machines.
Scenario #2: Add a Shift, and Hire More People to Man It
In Scenario #2, we still have to hire more people, but we don’t need more machines or any more floor space to accommodate new machines. We just keep running the machines after the first shift goes home.
Looked at that way, it’s pretty easy to see that adding a shift is cheaper than adding machines. Often, adding a shift carries the following benefits:
1. We double production capacity or, looked at another way, we cut manufacturing lead times in half. That’s a lot of flexibility.
2. Using Lean Manufacturing techniques, we can often save cash by reducing our work in progress inventory (since we manufacture twice as fast, the inventory sits around half as long).
3. Two shifts effectively doubles our tooling and equipment inventory since we get to use it twice a day.
Adding a shift is a very capital efficient way to grow.
Halving Manufacturing Lead Times Without Adding Staff
The advantages of adding a shift get even more compelling. Imagine taking half your staff and using them to man a second shift. Each shift now has half the workers as your original shift. You can’t really produce any more, because you are running the same number of worker/hours. However, you are wasting fewer hours in the day!
Most orders are a function of what day they will be delivered on, not what hour. Reducing the daily waste of hours can bring the day of delivery in, reducing lead times. Doing it this way also gives you more flexibility to work around problems that come up. You can revert back to a single shift until the problem is cleared up, or reduce the number of workers held up until the problem is fixed to half since that’s all that are on a shift.
Let’s say you’re running a single shift and decide to move half the staff to a second shift. You get the manufacturing lead time advantage mentioned, but now you’re getting better operational flexibility. The machine and tooling inventory when you ran one shift was presumably just enough to handle the needs of one shift. Breakage or losses meant somebody couldn’t get their hands on a machine or tooling they needed to keep going. When you split tooling and inventory sufficient for one shift across two shifts with the same number of people, suddenly there are reserves available to offset outages. You have gained operational flexibility.
More Ways to Slice and Dice Multiple Shifts
There’s a lot more that can be accomplished with multiple shifts. Suppose you’re having a hard time hiring for a late shift or even a second shift. Up the ante by offering the let people work 4 days, 10 hours a day, with 3 days off. The 3 days float, and you can set up two shifts with a little scheduling work. Many workers are attracted to having 3 days off, so it can be easier to hire such a situation.
You can work through these kinds of scenarios on a spreadsheet to see exactly how you might benefit from putting on an extra shift or two.
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