Manufacturers face plenty of challenges in today’s market, from cybersecurity to supply chain disruptions, to inventory management … the list goes on. What sometimes gets overlooked is the inefficiencies and cost overruns caused by duplicative processes, multiple staffing vendors, and geographic decentralization.
This is a common problem for companies that are too siloed, grow too fast, or go through mergers. Having too many staffing partners without centralized management can have many repercussions.
Here are some problems you may be experiencing if you fall into this category:
Inconsistent Training and Performance
One of the primary issues with having too many staffing providers is the inconsistency in training and performance standards. Each supplier may have its own set of protocols, training programs, and performance metrics. This lack of uniformity can lead to significant variations in the quality of products and services provided. This means spending additional time and resources on quality control and troubleshooting, at the expense of innovation and growth.
Multiple Standards for Hiring
When your company works with multiple staffing firms, you’re almost certain to encounter differing standards for hiring and workforce management. Each supplier may have different criteria for hiring employees, leading to a workforce with varying levels of expertise and experience. This disparity can result in operational inefficiencies and inconsistent product quality. Moreover, managing relationships with multiple suppliers requires additional administrative effort, further straining your resources.
Inability to Scale
Staffing agencies have different success rates due to geographic limitations, specializations, capacity and overall competency. If you need to scale up or down quickly to meet fluctuating demand, this can be a problem.
Payroll Complexities
Managing payroll becomes increasingly complicated with a large number of suppliers. Each supplier may have its own payroll system, payment schedules, and compliance requirements. This fragmentation can lead to errors, delays, and increased administrative burden. Additionally, discrepancies in payroll can cause dissatisfaction among workers, potentially leading to higher turnover rates and reduced productivity.
Difficulty in Calculating Total Workforce Costs
Another significant challenge is the difficulty in obtaining a clear view of total costs. With multiple suppliers, tracking expenses becomes a complex task. Each supplier may have different pricing structures, payment terms, and hidden costs. This complexity makes it challenging for you to accurately assess your overall expenditures and identify areas for cost savings. Consequently, it’s quite possible you’re overspending without realizing it, impacting your bottom line.
Manpower has a proprietary tool, The Total Cost of Workforce calculator that can provide you with a clear view of your workforce costs and suggest ways to lower them. For more details, check out our blog, Cutting Labor Costs? Be Sure You Know What You’re Cutting.
Onsite Management Can Help
Hiring a single company for onsite management not only addresses vendor consolidation but also enhances workforce stability, ultimately leading to improved operational outcomes.
How it Works
Onsite management involves deploying a dedicated team to oversee daily operations within a manufacturing facility. This team works alongside your existing staff to ensure that processes are executed efficiently and cost-effectively. By having a direct presence on the factory floor, an onsite manager can swiftly address issues, implement improvements, and foster a cohesive work environment. This hands-on approach allows for real-time problem-solving and continuous process optimization, which are crucial for maintaining high standards of productivity and quality.
Consolidating Vendors
A significant advantage of onsite management is the potential for vendor consolidation. By reducing the number of vendors, you can minimize administrative burdens and negotiate better terms with suppliers, giving you more time to focus on core activities that drive growth and competitiveness.
Reducing Turnover
One of the most significant cost overruns for many manufacturers is high turnover. A high turnover rate can lead to decreased productivity and increased costs associated with recruitment and training. Onsite management plays a crucial role in mitigating these challenges by fostering a stable and engaged workforce. Onsite managers can implement targeted retention strategies, such as comprehensive onboarding programs and continuous professional development opportunities, to enhance employee satisfaction and loyalty. By creating a supportive work environment and offering clear career progression paths, you can reduce turnover rates and build a more experienced and committed workforce.
Integrating Technology with Talent
In the quest for operational excellence, the integration of technology within manufacturing processes is paramount. Onsite management facilitates this integration by surveying your current state and working to bridge the gap between technology and human resources. Onsite managers can recommend or lead a reskilling program to ensure that employees are equipped to leverage new technologies effectively. This includes training employees on the latest manufacturing software, automation tools, and data analytics platforms, which can significantly enhance productivity and innovation.
Continuous learning and upskilling are essential components of a successful onsite management strategy. By investing in training programs that align with industry trends, businesses can cultivate a skilled workforce capable of driving innovation and maintaining a competitive edge. This proactive approach to workforce development ensures that employees remain adaptable and proficient in using advanced technologies, which is critical for long-term operational excellence.
Enhancing Operational Efficiency
Onsite management also contributes to operational efficiency by promoting a culture of continuous improvement. Onsite managers can regularly assess and refine manufacturing processes, identify bottlenecks, and implement best practices to enhance productivity. This ongoing evaluation and optimization helps businesses stay ahead of industry trends and maintain a competitive advantage.
Centralized management also enhances your ability to scale up or down quickly with fluctuations in demand.
A Quick Success Story
One of Manpower’s clients, a multinational consumer products manufacturer, was plagued by narrowing profit margins despite high demand for its products. The company had 13 different product development laboratories, each with its own operating costs, and with different vendors and work processes. They recognized the need to consolidate into one facility and streamline processes. A Manpower OnSite program manager reviewed critical work functions and equipment needs, then oversaw the implementation of a new record-keeping system and trained technicians on the new data entry processes. As a result, the company achieved cost savings of $1.2M.
The program manager in charge of the consolidation was certified in Six Sigma, a set of tools and techniques designed for process optimization. Six Sigma strategies not only eliminate redundancies in process, they also aim to reduce variability in the end product, leading to higher quality outcomes.
The Bottom Line
For manufacturing businesses grappling with out-of-control operating costs, onsite management offers a structured approach to achieve operational efficiency. With vendor consolidation and centralization of processes, you’ll be poised to make better hires, reduce turnover, and better integrate your people with your technology.
As you consider implementing onsite management, it’s important to choose your partner with care. Manpower OnSite combines a depth and breadth of knowledge in the manufacturing industry with proprietary tools and data to help you build a more agile, responsive, and resilient manufacturing operation.
