Managing working hours to improve factory performance

Reducing excessive working hours among suppliers is a challenging problem across all industries, because at its core it is a business and financial problem. The solution is not as simple as a factory agreeing to reduce hours. It is very often unique to the factory, commodity, and/or industry.

Finding the right solution requires a detailed analysis of root causes, identification of success factors and a careful balancing of factory and worker needs to avoid unintended consequences, such as higher worker turnover. In the end though, the solution must result in better business performance, financially and operationally.

ABB is addressing this issue through the ABB Training and Development Program for Factory Working Hours. The program, developed in collaboration with an external consultant and a peer company, is a cohesive, detailed training program that seeks to create an environment for tackling more complex issues and promoting change.

The process evaluates the topic of working hours management holistically and drives deep root cause analysis. Human resources, planning and operations managers are involved in the analysis and action planning stages, to enable factories to define and implement changes that result in positive business value, not simply working hours’ compliance.

The program was piloted with 15 suppliers in 2015, starting with a self-assessment to understand the business and social situation at the factories, knowledge gaps, best practices and potential improvement opportunities. This was followed by 1.5 day interactive seminar where all participants explored the primary root causes of excessive working hours and discussed project plan development.

The factories then developed their own 12-month project plans and were coached through the implementation process by the external consultant. Work plan topics included production planning and productivity, dealing with labor shortages and turnover, and working hours management. Progress was reviewed monthly and additional on-site coaching was provided when needed.

Outcomes will be evaluated in early 2016, but initial results were encouraging. Early experience also demonstrated that commitment from top management was key to drive improvement and ensure involvement of the entire factory team.