Job labor is updated as job sequences are finished.
All manufacturing companies have the same challenge
All manufacturing companies face the same challenge when it comes to monitoring work in process – where does each job stand at any given time? A great deal of effort gets wasted investigating job progress to expedite jobs through the shop.
Recording labor sequence completions real time is a requirement for shop control
Shop control is the means by which shop activities are coordinated to complete jobs. Using shop control will dramatically boost your manufacturing efficiency. Job labor tracking provides the information and feedback that makes shop control possible.
The benefits of job labor tracking (real time sequence completions)
Job labor tracking has a profound impact on your efficiency.
•It enables the Work Center Schedule screen to govern all shop activities, including worker assignments, material issues, and labor updating.
•It enables the job Priority calculation that determines the optimum job sequence order within work centers.
•It enables finished jobs to be received in real time without any delays for labor costing.
Labor must be updated as job sequences are finished
Real time labor updating is done using the Work Center Schedule screen. The Labor icon is clicked against the finished sequence to launch the Job Labor screen, which is opened to the selected job.
Standard hours are recommended for improved throughput and costing
When the Standard hours type is used against job sequences, labor can be quickly updated in just a few clicks because standard setup and labor hours are applied instead of actual hours. Using standard hours eliminates all the mechanical processes that are required to collect and report actual labor hours. Our recommendation is to use Standard hour sequences and commit to reporting completions when sequences are finished.
Use Standard hours for partially attended processes
Some work center machines can be started and run without the need for a worker to be present the entire time. To handle this scenario, the cycle time should be for the complete run time for the process. You can adjust the labor costing using the Labor Cost Factor in the BOM > Work Center > Details tab. For example, if the work center process is attended 20% of the time you can set the Work Center Labor Cost Factor to .20 and the Mfg OH Factor to 1. The costing will adjust the absorbed labor rate and leave the mfg overhead rate fully intact.
Use Standard hours for work center processes that require a team of workers
Some work centers require a fixed team size to perform a process. To handle this scenario, the cycle time should be for the complete run time for the process. You can adjust the Labor Cost Factor in the BOM > Work Center > Details tab to adjust the labor cost rate to reflect the team. For example, if the process requires a team of 2 workers, you can set the Labor Cost Factor to 2.
Use Actual hours sparingly
When the Actual hours type is used against job sequences, actual labor hours are collected manually and entered as an alternative to standard hours. Actual hours are appropriately used in these situations:
•When a process is one-off, custom in nature and has high variance potential from the estimated cycle time.
•Job Shop environments that typically manufacture with a Job Quantity of 1
Special Warning Regarding Actual Hours
Our experience has shown that it is very difficult to perform actual hours in most manufacturing environments. The reality of most shops are that once an item is finished it is shipped out as soon as possible regardless of whether all of the costing information has been submitted. It is very easy to make errors or omissions in labor entry that can have a very consequential effect on your cost of sales accounts and make your income statement a challenge to interpret. Since the product is likely already out the door, there is not an opportunity to fix the costs after the fact. We strongly recommend Standard hours completions for most companies.
Actual Job labor tracking requires 100% participation
Shop control is totally dependent on timely labor updating to have any meaningful use. Like any complex system, it is only as good as its weakest link. Therefore, shop control requires 100% participation among all workers and supervisors in updating their own labor as sequences are finished with no tolerance for delay.
Labor updating as the final step in any process
Never get behind on labor updating because doing so destroys the effectiveness of shop control. The best way to avoid this is to instill the notion in all production personnel that a job sequence is not considered finished until the labor gets updated. Workers can easily be trained to use the Job Labor screen and make their own entries.
Boosting your manufacturing efficiency
Tracking job labor is an essential element in boosting your manufacturing efficiency. Instead of running the shop by guesswork and expediting, you track job labor in real time to update job priorities and work center queues, which enables the work center coordination that helps jobs meet their required dates.
What to Do
Review your routing Hours Type settings - Set most for Standard hours
Review all your BOM routing sequences and make sure the appropriate Hours Type is selected to meet your labor tracking objectives. Our recommendation is to use Standard hours and focus on real time completions of labor sequences.
Review Job Labor Defaults
Go to the Job Labor Defaults screen and review options that facilitate job labor entry.
•Unless you have a compelling reason for tracking actual setup hours, select the Setup - No Entry – Use Standard Hours option.
•Unless you have a compelling reason for tracking actual sequence completion quantities, select the Completions – Flag as Finished option to facilitate labor updating.
•Unless you have a compelling reason for tracking standard hours transactions to specific workers, clear the Standard Hours - Worker Selection Required option to facilitate labor updating.
Format the job traveler for actual hours collection (only for Actual hours sequences)
The job traveler can be used to collect the labor hours that accumulate prior to sequence finish. When you format your job traveler layout, select the Labor Collection option. Additionally, you can specify the number of Labor Lines per Sequence. Within each “Actual’ hours type job sequence on the traveler, manual entry fields are provided to enter the Worker number, Date, Start Time, End Time, Total Hours, Completions, and Finished flag. Workers can manually update this information throughout the course of performing the job sequence.
Provide workstation access to each work center
It is essential that each work center has access to a computer workstation to enable real time labor updating.
Update labor as each job sequences is finished
As each job sequence is finished, update labor by clicking the Labor icon within the Work Center Schedule screen. This launches the Job Labor screen, which is opened to the selected job sequence.
•If Hours Type = Standard, flag the sequence as finished or pre-fill or enter the completed quantity.
•If Hours Type = Actual, enter the total hours and flag the sequence as finished or pre-fill or enter the completed quantity. If the total hours are calculated on the job traveler, enter the total hours. You have the option of clicking the down arrow in the Hours field to open the Hours Calculator, which calculates the hours based on start and end times with deductions for shift breaks.
