Category Archives: Labor Management

Final nGroup Q & A: Break Out 5

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This is the last nGroup break out! We hope you’ve enjoyed reading the answers to questions we have commonly been asked.  If you have any others, please ask by contacting or tweeting at us @ngrouppartners.  Hope to hear your feedback soon!

How do you incent productivity without harming quality?
We put incentives in place and include disincentives for poor quality. Employees are only paid on first quality throughput and they lose incentive for passing on a product that is not up to standard.  Quality checks are also designed into the process. nGROUP understands the cost to quality, we can implement a program that reduces billing for sub-par quality and increases billing for exceptional quality. All product quantities and quality are confirmed by you as work is completed. This assures that quality processes have independent inspections.

How do I recover cost while investing?
nGROUP works with our partners to develop pricing structures that encourage investment and improvement.  The pricing structure results in the ability to easily cost justify improvements by evaluating investment vs. expected savings.

How do I capture year over year cost savings?
The savings are different in each location.  Operational improvements and savings are contingent on factors such as flexibility within the operation, extent of nGROUP’s services, work content changes from year to year, and the ever changing costs associated with labor.  It is typical to see savings of 3-5% from year to year.

What is the cost to use the nGROUP solution?
The only loser in the program is the inefficiency in the process.  If we cannot remove these inefficiencies and find a way to save you money, we will tell you that your operation is not an application. We do require a $10,000 upfront assessment fee but if we find that our program cannot help save you at least 10% we’ll fully refund the assessment fee.

How are new employees screened?
All employees are screened according to our client’s requirements.  This always include I-9 verification for appropriate work status and can incorporate full drug testing, background checks, and credit checks when required.

How does nGROUP train employees?
Training employees is a cornerstone of our program.  Each employee receives a location and client specific orientation package that includes a written training curriculum as well as hands on training on site.  nGROUP’s orientation program has proven to improve both productivity and quality for new employees.

How will nGROUP comply with all safety requirements?
nGROUP starts by mimicking our client’s safety programs.  We then utilize regional safety coordinators to assess risks and evaluate the program.  Specific risks are identified and improved so that we can maintain a safe working environment.  We also apply incentives for safety and ongoing safety results.

What happens if an nGROUP employee is injured?
nGROUP has a standardized process to ensure employees are treated at local medical facilities in a fast, responsible manner.  The onsite representative will work with the employee to certify the process is followed.

nGroup Q & A: Break Out 3

Can nGROUP help increase sales and be more competitive?
nGROUP’s program minimizes labor cost and improves key operational metrics such as turnaround time and quality.  This allows our partners to be extremely competitive versus the market.  In addition, outsourcing the operational components provides your team with the ability to focus on more strategic areas of your business.  nGROUP is also committed to continuous improvement  so you will continue to outperform your competitors.

How does nGROUP’s program affect our employees?
We focus on individual productivity within our program.  We only accomplish our goals with successful employees.  When appropriate, we are glad to discuss opportunities to join the nGROUP team in order to maintain the tribal knowledge of our client’s operation.

How do I maintain control of the operation?
During our assessment and implementation, the nGROUP team will interview important shareholders to ensure our partners are comfortable with the reporting structure, inventory handling, production tracking, or whatever information is important.  We also develop processes that confirm quality, production, and billing data with our partner.  Our quarterly business reviews (QBR) are always an opportunity to review and adjust what we all find important.  In the end, inventory, process, and product never leave your facility.

nGroup Q & A: Break Out 2

Why do you think you can do it better than we can do it?
Outsourcing is not a zero sum game.  Many organizations fail to understand that the sum of the parts actually exceed the whole. 

By adding nGROUP, you are bringing additional resources to your operation to enhance your overall performance.  nGROUP has experience working with market leaders across the nation where we have had the privilege to develop, learn, and utilize world class best practices.  In addition nGROUP is dedicated to the improvement of our client’s operations.  All of our resources are utilized and trained to optimize our clients operation.  The nGROUP team is continually updated on the latest improvements from across our partner base.  We also invest in continued education for our team, develop and continue to invest in technology, tools, and solutions to improve our service offering.  By working together, we create synergies and benefits that were not possible previously.

Why outsource your operation?
nGROUP focuses on operational processes within your facilities to reduce cost, while improving productivity, quality, service levels, and reducing liabilities.  We allow your current management team to focus on strategic issues rather than the day to day burden of production and labor challenges.  Our world class team and processes along with our partners ultimate insight ensures you maintain control and receive the service and results you desire.

nGroup Q & A: Break Out 1

How can I be sure we will receive savings with nGROUP and the pricing is firm?
Our approach allows us to be aggressive with our pricing structure and helps build our partnership on a strong foundation.  To start, during our assessment process, the nGROUP team will work directly with the major shareholders within the facility to understand the cost structures within the operation and ensure we understand the process flow.  We also complete engineering analysis through time studies, work observation and historical data collection.  Our engineers and analysts compare our findings and confirm our conclusions with you.    Our benefits case will be developed using the verified results.  

How does nGROUP help in the areas of compliance, regulations, and legal?
nGROUP’s program mitigates co-employment issues for our partners.  Because we hire, manage, and discipline our employees, we keep you protected.  By maintaining the operation on your premises, you do not lose control of your data and information.  Your IT infrastructure is utilized and you can make certain data is always secure.  nGROUP maintains strict documentation and confidentiality policy as an addition safeguard.  In addition to these compliance items, our safety coordinators work with your team to enhance OSHA compliance and develop comprehensive safety programs.  The largest impact is the control over co-employment issues.  Because nGROUP hires, manages, disciplines, determine work tasks and hours, we are the legal employer, removing our clients from the ever rising tide of employee litigation.

4 Ways to Effectively Implement Change Management

By David Hair

Last month we published a series of articles related to the contemporary issues fueling operational and labor change for many U.S. companies.  In doing so, we also introduced third party human logistics (3PHL) as the emerging business model that provides “fix-it-fast” solutions to many of these issues. What are these solutions? Reduced unit labor cost, increased productivity and efficiency, improved or maintained quality, and reduced labor and co-employment liability.

In our 20 years of experience working with world-class companies, we have found that the biggest obstacle of adopting these “fix it fast” solutions isn’t implementation. It’s commitment.

 To read the case study in its entirety, click here.  To determine if nGROUP’s 3PHL “fix-it-fast” solution is right for your company, click here to complete a quick diagnostic.

Here are four ways we have found to effectively implement change management:

1.  Pressure For Change: The Top Down Approach
The need to change must first be a driving force within your company.

Whether the need to change comes from senior management or from customers or clients in a supply chain, the rest of the organization will need to be convinced of the case for change.  This can only happen to good effect when senior management stands united behind the benefits of the new strategy and communicates that to the entire team.

A change in strategy can be a signal to staff that they have a role to play in making change happen.  They begin to own the change the moment they see how change effects business at a corporate level and is also beneficial at a personal level.

2.  A Clear, Shared Vision That Motivates

Colleagues are inspired when they are motivated and management needs to understand what motivates them. What are the key motivators with every employee? Pride, happiness, responsibility, recognition, security, success, and money.  Motivating staff to support upcoming change is crucial for success. Leaders, never forget that change is a major cause of stress amongst the workforce so plan ahead to motivate your staff and create a positive environment for the shift.

(nGROUP has integrated these motivators into every aspect of the 3PHL business model – from training, to data collection, to incentive programs.  nGROUP’s 3PHL model communicates goals, tracks performance and rewards workers with tangible and non-tangible feedback.)

3. Capacity for Change
There is no magic technology or tool to create change. In fact, the greatest agent of improvement programs is a resource all companies already have — employees.

Workers have the information, intuition, ideas and instincts necessary for implementing a new strategy effectively.  When given the capability and the opportunity to participate in improvement programs, it is employees who often find the greatest cost savings and efficiency improvements.

nGROUP’s 3PHL recognizes the value of an employee’s experience and insight and openly seeks input and suggestions.

4. Action
Once the three factors listed above are in place, it is time to implement change.  This is where momentum matters.

nGROUP’s 3PHL model implements the “Plan-Do-Check-Act” management methodology to ensure the effectiveness and appropriateness of change.  Good monitoring and analysis of the resulting data is essential.

Case Study Results
In this particular case study, nGROUP’s 3PHL solution was first implemented in a single facility for the largest fresh food processing company in North America as a pilot program.  Based on the results, they rolled out the 3PHL model to two additional processing facilities.

“Over the first five years, they realized over $20 million dollars in operating income improvement.  The efficiency gains have ranged from over 25% to over 300% – depending on the baseline performance of each facility.  An overall average of 38% performance improvement was achieved,” says Jim Rossini, nGROUP Executive VP of Corporate Process.

Factors Driving Change in Operational Strategies

By David Hair & Jim Rossini

You have entertained your fair share of sales pitches promising that their programs will bring astonishing improvement to your bottom line. But how can you know for sure? Who can you really trust to bring you the results your company needs? Pick a plan with a guaranteed, proven outcome with feasible implementation.

As explored in “Contemporary Issues Fueling Operational and Labor Change,” there are many factors driving the need to change operational strategies.

“Do It Yourself” Change

As cited in “Why Companies Fail,” ‘Once the human mind has set out to do something, or has gotten in the habit of doing something, change is very hard.  When you add group dynamics, it’s even harder. You don’t need to be a brain scientist, of course, to know that people resist change … and yet, even knowing that, you’d be surprised at how many firms keep driving toward inevitable disaster at top speed.’

Knowing that change is resisted, it’s logical to transfer the responsibility to a third party with no incentive to hold fast to past policies or to feel overwhelmed by the stress from any push back. It’s a win-win situation, the corporation gets change without having to be the catalyst for it.

Consultative Approach to Change
There’s a consultant on every corner offering a one size fits all solution.  This is especially true for the operational and labor challenges facing U.S. corporations.

With consultants, you may be offered operational solutions on paper.  Many of which are misinterpreted or abandoned by line workers within months or weeks of so-called implementation.  In the world of production and labor, it is through consistent, on-site oversight that real change is realized and sustained.

Every organization is different, and that is why nGROUP guides each through their own unique experience.

Sustainable, “Fix-It-Fast” Results

Want the ‘fix-it-fast” solution that yields real results? It’s what we call  third party human logistics (3PHL).  After 20 years of experience improving labor-intensive operations for world-class companies, nGROUP performance partners pioneered the 3PHL business model.  Here is a visual representation of what we’re talking about:

Top 3 Issues Fueling Causing Operational and Labor Change

By David Hair and Jim Rossini

According to Inc. Magazine there are 5 main reasons why organizations do not change.

  1. Strength of Culture
  2. Rigidity of Structure
  3. Sunk Costs
  4. Contractual Agreement
  5. Entrenched Interests

It’s sobering to read that a few industry giants absolutely refused notions of change – for example Kodak and the advent of digital cameras and Blockbuster and the popularity of streaming videos.  Oops! So if your company is pushing back on new ideas, know you’re not alone. It happens everywhere, even to the best of us.

And yet, mainstream media is constantly reporting about evolving global competition and the expansion of domestic regulations affecting labor-intensive operations here in the U.S.   So while companies are resistant to change, we live in a world where change is inevitable.

These contemporary issues driving change as it pertains to succeeding in today’s U.S. labor market are:

1. The cost and administrative burden associated with labor compliance is dramatically increasing.

According to “Examining Trends in Regulatory Specialist Employment,” there has been a 122 percent increase in the number of private sector compliance staff.  “To further expand the regulatory state, the Affordable Care Act and the Dodd-Frank will produce more than 500 regulations in the near future, forcing the private sector to continue expanding its heightened compliance structure.”

2. Employment litigation has increased significantly over the last decade.

The Equal Employment Opportunity Commission reports a 140% increase in the number of lawsuits filed by the agency alleging employment discrimination in the last ten years.  They also report that the number of harassment claims has more than doubled during the past three years. 

To add to an overall increase in employment litigation cases, there has also been an increase in the number of cases involving co-employment or “permatemps.”  The most publicized case resulted in a 
Microsoft settlement of $97 million.

3. US manufacturing is positioned for a comeback as many of the advantages that once fueled China’s dominance are now becoming unsustainable.

“[T]he era of cheap China may be drawing to a close,” the Economist explains. “Costs are soaring, starting in the coastal provinces where factories have historically clustered. Increases in land prices, environmental and safety regulations and taxes all play a part. The biggest factor, though, is labor.”

Chinese labor costs have surged 20 percent per year for the past four years, and its most productive industrial centers are increasingly losing the ability to draw cheaper labor from inland China, while corruption and piracy are also degrading profitability. Labor costs for blue-collar workers in Guangdong, a key manufacturing region, rose by 12 percent a year from 2002 to 2009, while in Shanghai costs rose by 14 percent.  Source: ThomasNet

In short, we live in an era of increased labor regulations and global competition.  The pressure to adapt to a new economic climate may mean changing your labor strategy. In part two of our change management series, we will explore internal and external options for identifying the best next generation labor strategies.

Playing The Clock

By Jim Rossini

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If you are a golf fan chances are you tuned into the TPC Sawgrass Tournament a couple of weeks ago.  Moreover, you witnessed one of the most epic meltdowns in golf history.  Heading to the iconic 17th hole, Sergio was tied with Tiger Woods.

The 17th hole is a par three with a picturesque island green, meaning the tee shot must land on the green – avoiding the ultimate, non-negotiable hazard – water.   Considering the pin was front-right, Sergio made the decision to play the 17th aggressively and “go for it.”  Simply put, he came up short –two times.  On the 18th hole, once again Sergio found himself in water.  Ouch!

One can surmise that Sergio let his eagerness to beat Tiger override his decision-making abilities.  After all, TPC Sawgrass is a legendary course with legendary hazards.  Taking unnecessary chances on such a course is professional suicide.

 In my business, I see companies take similar risks way too often.  The solution, much like Sergio, is to be aware of and respect the hazards that prevent success.   In my world, one of the most prolific hazards is the mismanagement of time and attendance systems.

Many of the facilities that we partner with have time and attendance systems already in place.  Such systems may be a corporate method or system put in place by staffing companies.  Regardless of who “owns” the system, it is the lack of management and oversight that can create a hazard. So what are the common hazards of time and attendance systems?

“Playing the Clock”

 Most systems will roundup a worker’s time.  For example, if an individual clocks out at 8:44, their ending time is 8:45.  If they clock in after 8:45, their ending time is 9:00.  Guess what happens at 8:44?   The area around the time clock gets really crowded while workers wait one minute and one second so they can get paid for 15 extra minutes.  Plug-in any amount of numbers you want, but when you do the math the “playing the clock” game can have a significant impact on labor costs.

Manual Edits
One of the biggest areas of fraud when it comes to time and attendance is manual edits.  This takes place when the floor or shift supervisor simply takes the necessary steps to override an automated system and inaccurately enter hours that accurately record a worker’s hours.

“Buddy Punching”
When one worker simply punches in and out for another employee it’s called “buddy punching.”  After all if there is a name for it, it has to be commonplace.  What is not common is consistent oversight as to ensure that “buddy punching” doesn’t take place.

At nGROUP we pioneered the Third Party Human Logistics model.  3PHL goes beyond outsourcing work cells and processes – it involves the training, management, and measurement of the human factor. When it comes to the potential hazards of time and attendance systems, we take fraud and misrepresentation out of play through consistent oversight and accurate data capture.

As a trusted partner we are experts at avoiding labor and process related hazards.  As a result, our clients reap financial, performance, legal, and financial benefits.

From Pit Row to Production Floor: How To Make Seconds Count

By David Hair

It takes perfect timing to win the Indianapolis 500.  The fastest Indy500 was completed in 1990 by Arie Luyendyk  with an average speed of 185.981  mph.  In 1997 Luyendyk won the Indy500 again by .570 seconds.  This year the 97th Indy500 takes place on May 26 and as the most legendary automotive race in the world.  It’s certainly every racer’s dream to chug milk in victory lane and take home the Borg-Warner Trophy.

While the trophy and milk are traditions unique to the Indy500, the sport of racing has evolved technologically. Their success is dependent upon tactful preparation but their ability to outperform the competition can now be measured by a fraction of a second.

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Much like the sport of racing, performance in today’s global marketplace means that manufacturing and distribution companies throughout the U.S. must adopt strategic plans that account for every detail of their operations.   If every step, every second, and every work cell of an operation affects the outcome of a company’s performance, what contemporary strategy and technological advantage provides the competitive edge?

The solution for winning in business is the same as winning the Indy500 – make every second count.  Companies must develop an experienced team, build strategic partnerships. Technology and processes need to be predictable, precise, and measurable.  Above all, the strategy MUST provide the desired outcome.  In the case of companies involving labor-intensive operations, one such strategy is Third Party Human Logistics (3PHL).

While 3PL providers are more common in the marketplace, nGROUP performance partners created the 3PHL business model.  The training, management, and measurement of the HUMAN factor makes a significant difference in outcome.  As efficiency experts, nGROUP helps companies achieve high levels of performance – meeting or exceeding production and quality standards.   To learn more about nGROUP’s 3PHL model and how this model makes every second count, visit www.ngroup.biz.