HUMAN RESOURCES – YEAR 2
TQM – YEAR 4
Human Resources Module
The number of workers required to fill the production schedule without
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 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
incurred when new workers are hired. Recruiting costs average
$1,000 per worker.
schedules, whether it is because capacity has been sold, or
production curtailed to sell excess inventory, will result in lay-
are generated when workers are laid-off. Separation costs
average $5,000 per worker.
$2,000 has been entered in Recruiting Spend, the amount of
money spent — per worker — to attract a higher caliber
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.
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 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 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
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
Total Quality Management
Yearly investments of <
$250,000 will create little
Yearly investments above
$1,000,000 push well into
Investing more than
$2,500,000 in the same
initiative over 2- 3 year
period creates little or no
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
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
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:
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
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
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
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
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 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
Concurrent engineering provides a collaborative, co-
operative, collective and simultaneous engineering working
The concurrent engineering approach is based on five key
a multidisciplinary team
an integrated design model
a software infrastructure
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.
A process in which organizations evaluate various aspects of
their processes in relation to best practice, usually within their
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.
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
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
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
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.