HUMAN RESOURCES

YEAR 2
TQM YEAR 4

Human Resources
Production Staffing
Human Resources Module
Complement
The number of workers required to fill the production schedule
without Overtime.
Caliber
Talent of the workforce; recruiting a higher caliber of worker,
results in higher Productivity and lower Turnover.
Up to an additional $5,000 per worker can be spent.
If nothing extra is spent, the recruitment cost per worker remains at $1,000
and they get an average person off the street.
The more spent, the higher the caliber of the worker.
Training
Training leads to higher Productivity and lower Turnover, but
takes people off the job while they are in the classroom. Each
training hour costs $20 per worker.
Recruiting & Separation
Costs
Recruiting costs
Incurred when new workers are hired. Recruiting costs
average $1,000 per worker.
Decreasing Production
Schedules, whether it is because capacity has been
sold, or production curtailed to sell excess inventory, will
result in lay-offs.
Separation Costs
Generated when workers are laid-off. Separation costs
average $5,000 per worker.

Recruitment
$2,000 has been entered in Recruiting Spend, the
amount of money spent per worker to attract a
higher caliber worker.


Note: In this example the Productivity Index remains at 100%. As the rounds progress,
Recruiting Spend and Training Hours expenditures will increase the Productivity Index.
Training
20 Training Hours per worker
per year have been added.
Training Hours pull workers off
the assembly line, therefore the
Needed Complement rises to
301.
The Turnover Rate drops to
9.2% workers are happier
because of the training.
Training will cost $120,000.

2nd Shift and Overtime
Your plant has one production line for each product.
Each line contains workstations, and a worker staffs each
station.
Each line has a capacity, which is defined as the number of
units that can be produced per year with a single shift.
The plant can work into the night by adding workers
to a 2nd shift.
2nd shift labor costs are 50% more than 1st shift labor costs.
If you schedule a production run in excess of your 1st shift
capacity, a 2nd shift or overtime will be required.
Increasing capacity will reduce the number of workers
on the 2nd Shift, and therefore decrease labor costs.
Increasing capacity will not decrease the overall Needed
Complement, it will simply move 2nd Shift workers to the 1st
Shift.
2nd Shift and Overtime
Production schedule set to 1550.
The Staffing area reflects the information
that has been entered on the Production
schedule.
The Needed Complement is now 298, but the
Complement has held steady at 248.
Overtime has jumped to 32.6%.
The Turnover Rate has gone to 13.3%
workers are leaving because they are
disgruntled about the Overtime.
Total Quality Management

Yearly investments of
< $250,000 will create little
improvement
Yearly investments above
$1,000,000 produces
absolutely no additional
benefit
Investing more than
$2,000,000 in the same
initiative over 2- 3 year
period creates little or no
additional improvement

Process Management
Initiatives
These initiatives improve business procedures,
resulting in improved efficiencies and cost structures

CPI (Continuous Process Improvement) Systems -
Reduces Material cost and to a lesser degree Labor costs
Vendor/JIT (Just in Time [Inventory]) - Reduces Material
costs and Administrative overhead
QIT (Quality Initiative Training) - Reduces Labor costs
Channel Support Systems Increases the effectiveness of
the Sales Budget, and therefore demand
Concurrent Engineering - Reduces R&D cycle time, the
time needed to move products on the Perceptual Map and to
change MTBF specifications.
Continuous Process
Improvement
A process is a series of progressive and
interdependent steps by which an end is attained.
Continuous Process Improvement (CPI) is a strategic
approach for developing a culture of continuous
improvement in the areas of:
reliability
process cycle times
costs in terms of less total resource consumption
quality, and productivity.
Deployed effectively, it increases quality and
productivity, while reducing waste and cycle time.
Just in Time Inventory
Just-in-Time inventory system is designed to
ensure that materials or supplies arrive at a facility
just when they are needed so that storage and
holding costs are minimized.
The Just-in-Time system requires considerable
cooperation between the supplier and the
customer.
The customer must specify what will be needed, when, and
in what amounts.
The supplier must be sure that the right supplies arrive at
the agreed-on time and location.
Quality Initiative Training
Leaders of quality initiatives (project managers,
managers, and senior leaders) develop useful and
relevant knowledge and skills to ensure that company
resources and efforts are utilized in the most effective
manner.
Leaders gain useful and skill based learning in these
core quality leadership areas:
Leading Teams Through Quality Initiatives
Quality Philosophies and Approaches and Lessons Learned
at Other Firms
Customer Needs and Expectations
Quality Improvement Management Systems
Ethical Decision Making
Channel Support Systems
Support system to facilitate information sharing that
increases productivity and profitability, untangling the
web that once blocked the transfer of information.
Predictive modeling. Determine how to market the right
product to the right person at the right price and the right time.
Customer, product and business line profitability. Identify
the customer, product, organization and business line
profitability bottom line.
Product development and creation. Determine what
products will sell; define the distinctive product characteristics
and pricing.
Target marketing. Sell the right product to the right person at
the right time at the appropriate return.
Sales execution and tracking. Collect information pertaining
to who sells what product to whom, when and where.
Concurrent Engineering
Concurrent engineering is a business strategy
replaces the traditional product development process with one in
which tasks are done in parallel
there is an early consideration for every aspect of a product's
development process.
Concurrent engineering provides a collaborative, co-
operative, collective and simultaneous engineering
working environment.
The concurrent engineering approach is based on five
key elements:
a process
a multidisciplinary team
an integrated design model
a facility
a software infrastructure
TQM Initiatives
These initiatives improve product quality while
reducing the time and resources required to
design, manufacture, warehouse and ship
products.
Benchmarking - Reduces Administrative overhead

Quality Function Deployment Effort - Reduces R&D
cycle time and enhances the effectiveness of the Promo
and Sales Budgets

CCE (Concurrent Engineering)/6 Sigma Training -
Reduces Material costs and Labor costs.

GEMI TQEM Sustainability Initiatives - Reduces
Material costs and Labor costs.
Benchmarking
A process in which organizations evaluate various
aspects of their processes in relation to best practice,
usually within their own sector.
This allows organizations to develop plans on how to
adopt such best practice, usually with the aim of
increasing some aspect of performance.
Benchmarking may be a one-off event, but is often
treated as a continuous process in which organizations
continually seek to challenge their practices.
Benchmarking Procedure
Identify your problem areas
Identify other industries that have similar
Identify organizations that are leaders in these areas
Survey companies for measures and
Visit the "best practice" companies to identify leading
edge practices
Implement new and improved business practices
Quality Function Deployment
Effort
Flexible and comprehensive group decision making
technique used in product or service development,
brand marketing, and product management.

QFD transforms customer needs into engineering
characteristics of a product or service, prioritizing each
product/service characteristic while simultaneously setting
development targets for product or service development.

QFD can strongly help an organization focus on the critical
characteristics of a new or existing product or service from the
separate viewpoints of the customer market segments,
company, or technology-development needs.
Six Sigma Training
Six Sigma is a management technique that aims to
develop and deliver near perfect products and services.
"Six Sigma" refers to statistical constructs that measure
how far a given process deviates from perfection.
Processes are designed from the perspective of the
customer and are enabled by a commitment to thinking
in terms of processes across the organization.
Metrics such as performance, reliability, price, on-time
delivery, service and accuracy provide the targets.